Industry observers are still waiting for confirmation from International Business Machines (IBM) regarding its third quarterly earnings as well as the decision for the planned sale of its chip-making business, due to be announced Monday.

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IBM promised to make the announcement on its decision to sell the business to GlobalFoundries, but Bloomberg, citing two sources who are familiar with the negotiations, reports that IBM has agreed to pay GlobalFoundries $1.5 billion. The deal's net value would be $1.3 billion since IBM will also get $200 million worth of assets.

IBM had been negotiating with GlobalFoundries, owned by the investment arm of the Abu Dhabi government, to sell the chip-making business. The $1.5 billion payment will be over a period of three years, the report said.

According to PC World, IBM is selling its hardware assets as IBM CEO Ginni Rometty seeks ways to boost margins after the company logged its 9^th consecutive quarterly revenue loss. In early October, IBM agreed to sell its x86 server business for $2.1 billion to Lenovo. That would leave IBM's hardware business focused on its Power architecture used for running its Watson supercomputer, seen in the popular TV game show "Jeopardy."

Bloomberg added that IBM initially offered $1 billion for the business based in East Fishkill, New York, but GlobalFoundries wanted $2 billion. The deal would likely result in the chip-making operations being shifted to GlobalFoundries' facility in Santa Clara, California.

GlobalFoundries reportedly agreed to buy the business since it has engineers who are experts in semiconductor design and production. The deal would be beneficial to both companies that have a 10-year partnership in which GlobalFoundries would supply IBM with Power processors, and give it access to IBM's intellectual property. In turn, it would assure IBM a guaranteed supply of chips the tech giant needs for its mainframe computers.

IBM has shifted from making its Power servers in-house to contracting it with other hardware manufacturers. In 2013, IBM began to license its Power architecture for third-party firms to develop chips, servers and other components. To promote its Power-based software and hardware development, IBM created the OpenPower Foundation that counts Samsung, Google, Tyan, and Nvidia as members.

For the second quarter of 2014, IBM reported revenue of $24.4 billion, down 2 percent from the $24.9 billion revenue for the same quarter in 2013. But despite the weaker revenue, IBM boosted its profit by 28 percent in Q2 to $4.1 billion.

Analysts are projecting IBM Q3 earnings to go up to $4.32 a share, according to estimates compiled by Bloomberg. Since January, IBM shares had dipped 2.9 percent compared to the 1.2 percent decline of the Dow Jones Industrial Average.

TagsComputers, chips, global foundries, chip-making, PC