Intel is in talks to acquire chip maker GlobalFoundries, media reported. The company is owned by Global Mubadala Investment, the investment arm of the Abu Dhabi government. What might the Intel deal bring?
Intel (INTC) is in talks to buy contract chip maker GlobalFoundries for $ 30 billion, The Wall Street Journal reported on Thursday. The fact of negotiations has not been confirmed as the companies declined to comment.
Intel shares, which are up 12% since early 2021, are up slightly (0.3%) on the back of the news.
GlobalFoundries is owned by Global Mubadala Investment, the investment arm of the government of Abu Dhabi.
The company was once owned by rival Intel Advanced Micro Devices (AMD), today the companies keep in touch.
According to the form AMD has filed with the Securities and Exchange Commission, AMD has entered into a multi-year deal to buy silicon wafers worth about $ 1.6 billion from GlobalFoundries.
If the deal between Intel and Global Mubadala Investment goes through, it will face difficulties in approval from the US monopoly authorities.
Intel is looking to expand its manufacturing capacity, with plans to build two processor factories in Texas and become contract chip manufacturers for other companies.
However, the acquisition will not strengthen Intel’s position over competitor Taiwan Semiconductor Manufacturing (TSM) for the most advanced and sophisticated processors, which account for nearly half of TSM’s revenue. Several years ago, GlobalFoundries ditched plans to produce similarly advanced chips due to the complexity and cost of EUV technology, and even Intel had difficulty improving it.
So far, only Samsung Electronics and Taiwan Semi have demonstrated that they can efficiently manufacture chips using EUV technology.
Today, GlobalFoundries uses older technologies to make less advanced semiconductors, although ICs often have equally important applications. Like other semiconductor manufacturers, GlobalFoundries said it is expanding its production by investing approximately $ 4 billion to build a new plant in Singapore.
If the deal is not confirmed, GlobalFoundries could conduct an initial public offering (IPO) already scheduled for 2022.