WSJ: Intel negotiates the purchase of GlobalFoundries for $ 30 billion

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intel y globalfoundries 1000x600.jpg
intel y globalfoundries 1000x600.jpg

Intel could acquire semiconductor firm GlobalFoundries for $ 30 billion, highlights a report from The Wall Street Journal citing sources close to a high-profile operation with which the chip giant would seek to solve its chip production problems.

GlobalFoundries is the world’s second-largest foundrie after TSMC by revenue and owns large factories throughout Asia, the United States and Europe, where it has the largest European semiconductor plant in the German city of Dresden. As you know, a foundrie is dedicated to manufacturing semiconductors to order and with third-party designs.

GlobalFoundries is owned by Abu Dhabi-based sovereign wealth fund Mubadala Investment Co.. And it sure sounds like you because was part of AMD years ago, but the company had to sell it to cut costs when it was going through the worst financial moment in its history. However, GlobalFoundries and AMD have had a strategic chip supply agreement ever since. And we say this because it could be a problem for the purchase by Intel due to the antitrust issues that it can raise.

Intel and GlobalFoundries

Intel is in a tough spot. It has had serious problems in the transition to the 10 nm manufacturing processes and its privileged position in computer chips is threatened by pressure from AMD and especially by the changes in the industry towards other types of architectures, mainly ARM, but also others like RISC-V. At the same time, he sees a new business opportunity in the face of the current chip shortage that has the technology industry strangled.

If the threat of Apple in its commitment to ARM is evident, since the rest of PC manufacturers can follow in its footsteps and reduce the purchase of chips from Intel, AMD has become a great rival in CPUs for PCs and NVIDIA is not at least on servers with their CPGPUs, increasingly used in Artificial Intelligence, deep learning and high performance computing applications.

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Aware of the situation, new Intel CEO Pat Gelsinger announced Intel IDM 2.0 in his first public address. This program is one of the largest business strategy changes in history of the chip giant, contemplating three differentiated and novel parts to keep Intel at the forefront of the semiconductor business:

  • In-house manufacturing. Key to supplying its own processors and reducing the current problems that have led (for the first time) to outsource manufacturing to external suppliers.
  • External factories. Use of foundries such as TSMC, Samsung, and GlobalFoundries for certain products that Intel calls “core computing offerings” for consumers and businesses.
  • Intel Foundry Services. Intel will become a foundry to open up to produce chips for third-party manufacturers.

Intel and GlobalFoundries

Remember that manufacturing technologies are absolutely key in today’s semiconductor industry and affect its most important characteristics such as performance, density, consumption and costs. Intel has technology and patents for all this, but its real capacity to carry out the strategy remains to be seen, taking into account the serious problems it has had in the transition to technological manufacturing processes at 10 nanometers and the delay of 7 nm expected for 2018.

Intel cannot lose any more pace and the purchase of GlobalFoundries would accelerate the strategy set. With this foundrie, the supply of own chips would be guaranteed and could enter the business of the ‘foundry’ to manufacture third-party chips at a time when the demand for semiconductors is at record values ​​and not only to produce technology products, if not in other industries like automotive.

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