Intel wants to buy GlobalFoundries for $ 30 billion

Intel has prepared an investment of € 20 billion, which it wants to spend on the construction of new factories in Europe. However, this will be preceded by long negotiations, the solution of various permits, followed by the construction itself, the furnishing of factory equipment and, finally, the search for and training of the workforce. Intel must have thought that more than half of this effort and time could be saved by acquiring existing factories.

According to The Wall Street Journal, Intel chose GlobalFoundries and would like to buy it in its entirety for about $ 30 billion. GlobalFoundries currently belongs to Mubadale, an investment company from Abu Dhabi with a presence in the United States. It acquired GlobalFoundries from AMD, whose factory was originally located. AMD at GlobalFoundries manufactures the latest 14 / 12nm chips, but most of the production consists of 12nm chiplets for Ryzens and Epycy built on architecture Zen 2 a Zen 3, Epycy first generation with 14nm modules are also on sale.

In May of this year, AMD entered into the last mandatory agreement with GlobalFoundries (the framework of which was defined during the division of the companies). Interestingly, this last “mandatory” contract is not signed by March 31, 2024 (when the validity / obligation of the entire commitment expires), but by December 31, 2024, ie by the end of 2024. Three quarters longer in validity was probably initiated by a financially interesting offer by GlobalFoundries. Hypothetically, there may be situations in which processors for AMD will be required to be manufactured by Intel at very low prices.

GlobalFoundries, Dresden (the company’s most advanced production lines, 12nm process)

The whole event is also interesting from another point of view, in terms of changing Intel’s strategy. Under Brian Krzanich, Intel was run as a money factory. It all depended on the financial reports. If there was a more expensive acquisition, it was a company that had higher margins than Intel, so that after its absorption, the financial reports look better again. A model example is the acquisition of Altera in 2015. But the acquisition of GlobalFoundries is something completely different. Even if Intel equips GlobalFoundries’ production lines with its own technology and starts producing 10nm or more advanced chips, it will not have higher margins on such products. Even TSMC, which has capacities several times higher than Intel, but earns only custom manufacturing, does not have such a profit (and of course no margin) as Intel. It seems that the dogma of targeted improvement of financial indicators has fallen and the strategy is really different.

In conclusion, it should be noted that Intel’s interest does not automatically mean that the acquisition will take place, as these are two really significant forces in semiconductor manufacturing, the merger of which would not be liked by antitrust authorities. If we omit memory and stick to logical circuits, Intel is currently the worst third largest manufacturer in the world (Samsung falsifies a bit because it’s not clear what percentage of its production is memory – but definitely the majority) and Intel is closely behind UMC and then GlobalFoundries now. The combined capabilities of Intel and GlobalFoundries would certainly surpass Samsung’s capabilities in the semiconductor logic segment, creating a kind of TSMC-Intel duopoly.

Source: by

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