Intel is Actively Catching Up with TSMC, One Step Closer

Recently, the market research institution IC Insights released the latest report stating that, benefiting from the strong market demand, 32 of the 33 major IC market categories defined by WSTS are expected to increase in sales this year, and 29 product categories are expected to have double digits. Significant growth. It is expected that the sales of the global chip market this year will increase by 24% year-on-year, and will exceed the historical high of US$500 billion for the first time.

In mid-2021, the production of new chips has returned to normal levels, but the surge in demand for chips caused by the Covid-19 pandemic means that the chips needed for smartphones, computers, TVs, automobiles and other terminalapplications are still in short supply, and chips are in short supply. The situation may last until 2022.

Zhitong Finance APP learned that, according to people familiar with the matter, Intel (INTC.US) has studied the feasibility of acquiring Global Foundries in the United States.

The abovementioned person familiar with the matter said that there has not yet been a case against Mubadala Investment Co., the owner of Global Foundries, Abu Dhabi wealth fund. For the formal acquisition, the two parties did not engage in active negotiations.

At the same time, people familiar with the matter pointed out that Mubadala continues to work with consultants and plans to list the company at a value of about US$30 billion by the end of this year or early 2022.

People familiar with the matter said that to persuade Mubadala to sell, Intel needs to launch its largest acquisition so far. In view of the current shortage of semiconductors, it needs to propose a price that can seize the room for future business growth. Mubadala has been evaluating its holdings and traditionally prefers to sell a minority stake in its business.

Despite this, after the media reported on Thursday that Intel was in talks to acquire Global Foundries for approximately US$30 billion, the media quoted people familiar with the matter. Several analysts reacted positively to the potential transaction.

A spokesperson for Global Foundries stated that there was no negotiation with Intel. Representatives of Intel and Mubadala declined to comment.

Earlier, Intel CEO Pat Gelsinger announced a plan in March to spend 20 billion US dollars to build two new semiconductor manufacturing plants in Arizona. KeyBanc Capital Markets analysts said that although these factories are not expected to significantly increase production until 2023, the transaction with Global Foundries will "significantly accelerate" Intel's plan to become a chip manufacturer of other companies.

It is understood that KeyBanc analysts wrote in a report on Friday that the acquisition of Global Foundries will also enable Intel to gain "important" experience and leadership in operating third  party services, which Intel lacks. In addition, there will also be a mature customer base that can sell other services.

Global Foundries and other foundry chip manufacturers are Apple (146.39, -2.09, -1.41%) (AAPL.US), Nvidia (NVDA.US) and Amazon (3573.63, -57.57, -1.59%) (AMZN.US) and other large Technology companies make chips, and these large technology companies design silicon themselves. When many industries are complaining about the insufficient supply of semiconductor chips, and Global Foundries' biggest competitors, TSMC (TSM.US) and Samsung Electronics (208.25, 0.00, 0.00%) are unable to meet the demand, Intel made the above decision.

Gelsinger, who took over as Intel’s chief executive officer in February this year, promised to restore the company’s dominant position in manufacturing and computer processors, after the company was previously robbed of market share by companies such as TSMC.