IBM buys big stake in chipmaker
In a move that will have wide ramifications in the computer business, International Business Machines Corporation has paid $250 million, or $40 a share, for 12 percent of the shares of Intel Corporation, a major semiconductor manufacturer.
According to Monitor correspondent Ron Scherer, a spokesman for IBM said the company made the investment because it considered it important ''to have a strong merchant semiconductor industry.'' He described Intel as ''clearly the leader'' in the semiconductor business.
For IBM, the leader in the computer business, this is the first purchase since it settled an antitrust case early in the year. The agreement with Intel is subject to antitrust review under the Hart-Scott-Rodino Act.
The purchase is sure to have wide implications in the computer industry. IBM not only makes its own semiconductors, but buys them from a variety of suppliers. This investment will surely cause concern to those suppliers, even though IBM president John R. Opel has said the company expects to continue buying from other manufacturers as well. The move might also prompt other computer companies to consider making similar purchases of semiconductor equity.
Although IBM has made other smaller investments in companies before, this is the first of this type. It left open the possibility it would buy more of Intel, a Santa Clara, Calif., company, but would limit its total ownership to 30 percent. Intel, which issued the shares to IBM, said it would use the proceeds as part of its investment in research and development and to increase production capacity.