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| Intel plans to acquire GlobalFoundries for $30 billion |
Intel is considering acquiring GlobalFoundries, an initiative that supports the semiconductor giant's plan to produce more chips for other technology companies, and will consider it its largest acquisition.
In 2008, chip makers Intel and AMD went two very different paths, and Intel continued to manufacture its own chips to keep them in complete control.
AMD decided to split its semiconductor business into GlobalFoundries and rely on GlobalFoundries and other manufacturers to supply silicon.
The Wall Street Journal reported that Intel is planning to acquire the former chip maker AMD, and the value of the deal is estimated at about $30 billion.
The Wall Street Journal report said the deal has not been confirmed, and GlobalFoundries has publicly denied that it is negotiating with Intel.
But the Wall Street Journal indicated that Intel could negotiate with the investment firms that own GlobalFoundries.
GlobalFoundries can go ahead with the IPO as planned. GlobalFoundries is owned by Mubadala Investment Company, an investment agency of the Government of Abu Dhabi, but is headquartered in the United States.
Intel wants to acquire GlobalFoundries
Intel, which has a market capitalization of about $225 billion, wants GlobalFoundries for an obvious reason. The chip giant is now expanding its chip business.
To turn things around for the struggling company, Pat Gelsinger, the company's new CEO, announced in March that Intel would not act alone. It is outsourcing more wafer production to third party factories.
He agreed to use his own factory to produce more chips for other companies. And invest in the new manufacturing industry yourself.
This includes a $20 billion investment in a new facility in Arizona. But new buildings can take many years to build and hold.
At the same time, it can acquire GlobalFoundries, the fourth factory in the world. In terms of sales, this is equivalent to 7% of all chip manufacturers.
This means that Intel is not on a par with the giants TSMC or Samsung (together they make up 74%). But this could be the beginning.
The meeting is taking place at a time when the shortage of semiconductors is shaking various industries around the world.
The deal could help Intel ramp up chip production during peak demand periods.
The company plans to start producing chips for automakers who are struggling to keep operations running due to severe bottlenecks.