camila July 16, 2021

BENGALURU (REUTERS) – Intel Corp is in talks to buy chip giant GlobalFoundries, a big investor in Singapore manufacturing, for about US$30 billion (S$40.6 billion), the Wall Street Journal reported on Thursday (July 15).

Any deal talks do not appear to include GlobalFoundries directly, as a spokesman for the company told WSJ it was not in discussions with Intel, according to the report, which cited sources familiar with the matter.

The talks come as a semiconductor shortage is hobbling industries around the globe. A deal could help Intel ramp up production of chips at a time demand is at its peak and the company is looking to start producing chips for carmakers that have struggled to keep operations running due to severe shortages.

Intel, one of the last companies in the semiconductor industry that both designs and manufactures its own chips, said earlier this year it would expand its advanced chip manufacturing capacity by spending as much as US$20 billion to invest in factories in the United States.

Intel said it intended to open its factories to outside chip designers, as it competes with Taiwan’s Semiconductor Manufacturing Co and Korea’s Samsung Electronics.

GlobalFoundries, which is owned by Abu Dhabi sovereign wealth fund Mubadala Investment Co, has manufacturing plants across the US, Europe and Asia.

Mubadala is looking at a potential listing of GlobalFoundries later in the year, Reuters reported last month, citing sources familiar with the matter.

GlobalFoundries’ customers includes Advanced Micro Devices, its parent company before it was spun off more than a decade earlier, a relationship that could spark antitrust questions about an Intel deal.

GlobalFoundries’ Singapore production currently account for about one-third of GlobalFoundries’ revenue and serves about 200 customers worldwide.

It has five chip-production facilities or wafer fabs in the Republic and last month announced a US$4 billion investment to add a new plant in its existing Woodlands campus that is expected to start production in January 2023.

The new plant is expected to add around 1,000 jobs, with the manufacturer currently employing about 4,800 employees here, around a third of its global headcount.

• With additional information from The Straits Times