IBM plans to retain its chip-design capabilities while selling the manufacturing operation, The Wall Street Journal also reported.
The company is also reported to have approached other vendors to check their interest in acquiring its software defined networking business.
IBM did not provide any comment.
IBM Microelectronics designs chips based on the Power Architecture for use in its own systems as well as other companies. It licensed in October a range of ARM Cortex processors from ARM Holdings to be used in custom chips for networking and communications.