Intel’s reported interest in acquiring GlobalFoundries comes as the Malta-NewYork-based company has embarked on a multi-billion-dollar program to expand its foundry capabilities on multiple continents.
The latest step in that expansion may be announced Monday. A report from the Albany Business Review suggested that GlobalFoundries is due this week to announce a major expansion of its New York facility. The company also said in an email to Fierce Electronics this weekend that on Monday it is making “a significant announcement about GF’s global expansion plans and commitment to addressing the imbalance between supply and demand in the semiconductor industry.”
GlobalFoundries moved its headquarters from Santa Clara, California, to Malta, in New York’s Saratoga County, the site of one of its existing foundries, just a few months ago.
This announcement looms after GF last month announced it is investing $4 billion to build a new factory in Singapore, according to a Bloomberg report, which also stated that the company was planning similar investments in sites in the U.S. and Germany.
If GF announces the U.S. expansion Monday, the news will come just a few days after The Wall Street Journal reported that Intel is interested in acquiring GF for around $30 billion, which is roughly the same amount of money GF owner Mudabala Investment Co. has been hoping to raise through a planned IPO.
Both the GF expansion program and Intel’s reported acquisition interest come against the backdrop of geopolitics becoming a larger factor than ever in the semiconductor manufacturing landscape.
Last week, during a SEMI virtual event, the group’s research director said that “geopolitics” had become, with unexpected quickness, a major factor in the investment of manufacturing facilities. The pandemic-influenced worldwide chip shortages dating back to early 2020 highlighted how a semiconductor industry filled with fabless chip companies had become increasingly dependent on manufacturers clustered in Asia, such as Taiwan’s TSMC and South Korea’s Samsung, as well as a rapidly growing number of Chinese firms.
As a result, and as concerns about China’s influence technology markets have continued to grow, the U.S. federal government, the European Union and other individual countries have expressed desires to see semiconductor manufacturing become more geographically diversified. In the U.S. case, Congress and the Biden administration have made it clear they want the U.S. to once again become a leading base of operations for chip foundries and other elements of the manufacturing process, after watching the nation’s influence in that arena wane over the last three decades.
The latest move in GF’s expansion program directly answers that call, as would an Intel acquisition of GF, as it would take GF’s ownership out of the hands of an investment fund of the government of Abu Dhabi. Intel could be a more engaged owner, willing to invest in further manufacturing upgrades and innovations.
“With so much criticism of foreign dominance in this space, anything the [U.S.] government could do to show they are ‘bringing tech back home’ would be good,” added Jack Gold, principal analyst at J. Gold Associates, via email. “That could certainly play in Intel’s favor as well as it looks to get more government help… I guess almost everything in tech these days has some political ramifications.”
“The combination of Intel’s immense resources and extensive expertise in this space, in conjunction with GlobalFoundries existing business and established global presence, could be a significant boon for both entities and disrupt the semiconductor foundry market,” said Marco Chiappetta, principal analyst, HotTech Vision And Analysis.
Intel already has set itself on a course to grow its own manufacturing capacity. The company earlier this year announced it would invest $20 billion in two Arizona fabs, for example. “This is about Intel going back into the foundry business, wanting to increase its capacity,” said Ben Sheen, Research Director, Enabling Technologies: Networking & Communications Infrastructure at IDC, “GlobalFoundries is very global, but a New York-based fab is what Intel probably wants the most to help them meet this growing demand for more on-shore sources of wafers.”