Intel’s reportedly in talks to buy Globalfoundries for $30 billion

According to the Wall Street Journal, Intel’s exploring a deal with GlobalFoundries where they could buy the foundry for around $30 billion. This deal would be used to turbocharge Intel’s IDM 2.0 business plan by expanding Intel’s manufacturing capacity while giving Intel access to GlobalFoundries’ customers. 

Recent rumours have suggested that GlobalFoundries are planning to go public sometime in the near future, giving the foundry the finances they need to expand. Currently, GlobalFoundries is owned by Mubadala Investment Company, an investment company that the Abu Dhabi government owns. 

While GlobalFoundries isn’t a player within the leading edge foundry market anymore, the company has a market share of around 7% within the semiconductor manufacturing industry. For Intel, acquiring GlobalFoundries would grant them access to some of the talent and expertise they need to accelerate their IDM 2.0 strategy and access to many semiconductor patents and IP that could prove useful for future technological developments. 

Additionally, Intel would gain access to GlobalFoundries’ global customers and GlobalFoundries’ manufacturing facilities. While $30 billion sounds like a huge investment, building new fabs isn’t a cheap process, and building new semiconductor manufacturing facilities takes time. 

Buying GlobalFoundries will tell the world’s governments that Intel is serious about its IDM 2.0 strategy, which may prove vital as they seek government funding for their planned chip manufacturing facilities. 

Amongst GlobalFoundries’ clients is the US government, an aspect of the deal that could be contentious. On the one hand, Intel’s IDM 2.0 strategy would grant them access to higher-end chipmaking technologies, but on the other hand, it could lead to increased regulatory scrutiny. Another factor is how GlobalFoundries’ existing clientele will react to news of an acquisition.