Intel Corp has reported an interest in buying GlobalFoundries, in a move that would turbocharge the semiconductor giant’s plans to make more chips for other tech companies and rate as its largest acquisition ever.
A deal could value GlobalFoundries at around $30 billion, the people said. It isn’t guaranteed one will come together, and GlobalFoundries could proceed with a planned initial public offering.
GlobalFoundries is owned by Mubadala Investment Co., an investment arm of the Abu Dhabi government, but based in the U.S.
Any talks don’t appear to include GlobalFoundries executives, as a spokeswoman for the company said it isn’t in discussions with Intel.
Intel’s new Chief Executive, Pat Gelsinger, said the company would launch a major push to become a chip manufacturer for others, a market dominated by Taiwan Semiconductor Manufacturing Co.
Intel, with a market value of around $225 billion, this year pledged more than $20 billion in investments to expand chip-making facilities in the U.S., and Gelsinger has said more commitments domestically and abroad are in the works.
AMD remains a big customer for GlobalFoundries—agreeing to a multiyear, roughly $1.6 billion chip-component supply deal this year—and that could complicate a takeover by Intel. GlobalFoundries is relocating its corporate headquarters to Malta, N.Y., from Santa Clara, Calif.
GlobalFoundries has about 7% of the foundry market share by revenue, according to Taiwan-based research firm TrendForce. Some of the largest chip companies, including Qualcomm Inc. and Nvidia Corp., rely on third-party producers to make their products, preferring to focus on design and without the hassle of running their factories. Nvidia last year overtook Intel as America’s biggest semiconductor company by value.
Like Intel and TSMC, GlobalFoundries is expanding its manufacturing footprint amid a global shortage of semiconductors. GlobalFoundries last month said it broke ground on a new chip-production facility, called a fab, in Singapore, investing more than $4 billion in the site.
President Biden has promised to take steps to help mitigate the chip shortage, pledging to spend billions of dollars to boost capacity. Governments overseas have signaled similar commitments.
Gelsinger, who was Intel’s chief technology officer before leaving to run VMware Inc., returned to the chip giant to be its Chief Executive this year, following major delays in chip-making advances under his predecessor, Bob Swan.
Gelsinger has vowed to make Intel more reliable in producing new chips.