Tech

Intel in Talks to Buy the $30 Billion AMD’s Former Foundry Company

Chip-maker Intel is reportedly exploring a deal to acquire GlobalFoundries, a semiconductor company its rival AMD spun off a decade ago, for nearly $30 billion. Both GlobalFoundries and Intel have denied any such talks.

According to a report in The Wall Street Journal citing sources, “It isn’t guaranteed one (the deal) will come together, and GlobalFoundries could proceed with a planned initial public offering.” GlobalFoundries is owned by US-based Mubadala Investment Co, an investment arm of the Abu Dhabi government.

It’s clear from the WSJ story that the deal isn’t a sure thing, and GlobalFoundries outright denied that it was in talks with Intel. But its possible Intel’s negotiating with the investment firm that owns GlobalFoundries instead, as the WSJ points out.

In 2008, chipmakers Intel and AMD took two distinct paths: Intel kept manufacturing its own chips to maintain full control, while AMD decided to spin off its semiconductor business as GlobalFoundries, relying on it and other manufacturers to provide the actual silicon.

If the deal goes through, it would bolster Intel’s $20 billion plans to build out its new contract manufacturing unit. The new unit, called Intel Foundry Services, aims to operate as other contract chip manufacturers, and will make chips designed by other companies.

There’s an obvious reason why Intel might want GlobalFoundries — Intel is actually ramping up its foundry business now. In an attempt to turn around the struggling company, new Intel CEO Pat Gelsinger announced in March that Intel would no longer go it alone, outsourcing more of its chip production to third-party foundries, agreeing to produce more chips for other companies using its own foundries, and also investing in new chips itself.

In the meanwhile, it could snap up GlobalFoundries, the #4 foundry in the world, according to TrendForce, one that accounts for 7 percent of all foundry business by revenue. That won’t put Intel on the same footing as a giant TSMC or Samsung which together account for an estimated 74 percent, but it’d be a start.

Intel CEO Pat Gelsinger also unveiled a new branch of the company called Intel Foundry Services, to become a major provider of foundry capacity in the US and Europe to serve customers globally. The two new factories will be built in Arizona, located at the company’s Ocotillo campus. These factories will support the increasing requirements of Intel’s current products and customers, as well as provide committed capacity for foundry customers.

The Intel CEO expects Intel’s engagement with third-party foundries to grow and to include manufacturing for a range of modular tiles on advanced process technologies, including products at the core of Intel’s computing offerings for both client and data center segments beginning in 2023.

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