IBM 'major announcement' points to deal on chip manufacturing

If the deal with GlobalFoundries goes through, IBM will likely move the manufacturing of its Power chips into the hands of the Santa Clara, California, company. GlobalFoundries has many factories worldwide including one in Malta, New York. IBM would also further reduce the size of the company's Systems and Technology Group, which is responsible for hardware.

In recent years, STG employees have been laid off, put on furlough and most recently, some have been moved to Lenovo as part of the x86 server deal.

IBM's second-quarter revenue was $24.4 billion, down 2 percent compared with $24.9 billion in the second quarter of 2013. Despite sluggish revenue, the company did make headway in increasing profit, which was up 28 percent year over year, to $4.1 billion. However, much of that bump was due to the comparison with a weak year-earlier quarter, which was abnormally low due to a billion-dollar charge the company took for workforce rebalancing.

During the conference call for its second quarter earnings, IBM executives described the company as being in transition, and cautioned that its revenue growth might flatten as it moves to new technologies and services.

Rometty highlighted cloud, big data and analytics, security and mobile technology as key to the company's growth.