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IBM GlobalFoundries Deal Gets Competition Commission Approval

IBM-GlobalFoundries Deal Gets Competition Commission Approval

By Press Trust of India | Updated: 2 January 2015 09:57 IST

Fair trade watchdog CCI has cleared the proposed deal between technology major IBM and GlobalFoundries, saying the deal would not have any adverse impact on competition in the country.

Under the deal, GlobalFoundries (GF) would acquire certain assets and assume the liabilities of IBM's microelectronic business.

Giving its clearance, the Commission said the combination is not likely to have an appreciable adverse effect on competition in India.

Competition Commission of India (CCI) keeps a tab on unfair business practices at the market place.

IBM's microelectronic business includes captive design and manufacture of integrated circuits specifically, microprocessors and application specific integrated circuits (ASICs) for use in its server and storage businesses.

Besides, it has the design and manufacture of ASICs for sale to third parties as well as the provision of wafer fabrication services to third parties for the manufacture of ASICs and application specific standard products (ASSPs).

IBM has good presence in India.

A pure-play semiconductor foundry, the US-based GF offers a full range of wafer fabrication services and technologies.

It does not have any operations in India.

With respect to foundry services for manufacturing of integrated circuits in the country, the Commission noted that the concerned industry is in a nascent stage.

"There is no domestic manufacturing of chips being undertaken in India and entire consumption is met through imports," it said in the order dated December 23.

According to the order, there would be a vertical relationship between the companies pursuant to the proposed combination. This would be due to GF supplying processed silicon wafers to a number of ASIC suppliers including IBM.

Also, IBM is active in the downstream market of supply of ASICs to device and equipment manufacturers.

"However, it is not likely to cause any appreciable adverse effect on competition in India, given the fact that at present, GF has no operations in India," it said.

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