Intel in Talks to Buy Semiconductor Giant GlobalFoundries for $30 Billion USD

Intel might buy GlobalFoundries, signaling the company’s efforts to make more chips for other tech companies.

Back in March, Intel signaled its intent to become a manufacturer of chips for other companies. Now, according to a new report from the Wall Street Journal, the company is considering a possible acquisition of GlobalFoundries as a way to accelerate that process.

Talks are reportedly already underway, with a price tag of around $30 billion USD being discussed. However, GlobalFoundries is planning to become a publicly traded company in 2022, which could still go ahead unless current owner Mubadala Investment Company can be convinced this is a better deal. For now, the talks do not involve GlobalFoundries executives, allowing the company to deny discussions are happening.

GlobalFoundries is a worldwide chip manufacturing concern based in the U.S. The company was spun off from Intel’s rival chip maker AMD in 2012, and is currently owned by Mubadala Investment Company, the investment arm of the Government of Abu Dhabi.

Patrick Moorhead, founder and principal analyst at Moor Insight & Strategies, who watches the chip industry closely, says that snagging GlobalFoundries would certainly make sense for Intel. The company is currently pursuing a new strategy to manufacture and sell chips for both Intel and to others under CEO Pat Gelsinger, who came on board in January.

“GlobalFoundries has technologies and processes that are specialized for 5G RF, IoT and automotive. Intel with GlobalFoundries, would become what I call a ‘full-stack provider’ that could offer a customer everything. This is in full alignment with IDM 2.0 (Intel’s chip manufacturing strategy) and would get Intel there years before it could without GlobalFoundries,” Moorhead said

GlobalFoundries was founded back in March 2009 when AMD divested its manufacturing arm and now has operations across Europe, North America, and Singapore consisting of five 200mm fabrication plants and four 300mm fabrications plants. With over 15,000 employees, 10,000 patents, and more than 250 customers on its books, it’s a huge operation producing around 7 percent of the world’s chips.

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