Consolidation Trend Continues: Intel (INTC) Is Reportedly Negotiating the Acquisition of GlobalFoundries for $30 Billion Following Its Bid of Around $2 Billion for SiFive Recently


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Intel (NASDAQ:INTC), the semiconductor behemoth at the heart of a concerted push by the US to re-shore chip fabrication, seems to have embarked on a zealous buying spree.

As per the exclusive reporting by the Wall Street Journal, Intel is currently in buyout talks with the Abu Dhabi-based Mubadala Investment to acquire GlobalFoundries, the chipmaker that constituted AMD’s (NASDAQ:AMD) fab division and was spun off around three years back. While the outcome of these ongoing negotiations is still uncertain, any potential deal could value GlobalFoundries at around $30 billion. Readers should note that the talks apparently do not involve GlobalFoundries itself at this stage.

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This development comes just weeks after Bloomberg reported that Intel had offered around $2 billion to acquire the fabless semiconductor SiFive, a provider of commercial RISC-V processor IP and silicon solutions based on the RISC-V instruction set architecture.

Intel is seeking to enhance its chip fabrication footprint as part of the IDM 2.0 strategy. To this end, the company has formed a completely separate business unit called the Intel Foundry Services (IFS). The IFS seeks to expand Intel’s foundry footprint in the US and the EU by providing committed capacity and a comprehensive IP portfolio, including x86 cores as well as ARM and RISC-V ecosystem IPs. Moreover, the chipmaker is investing $20 billion to build two new fabs at its Ocotillo facility in Arizona.

Intel appears determined to claw back the market share that it has lost to AMD. Nonetheless, given the extent of the company's losses, it still has to traverse a fair bit of distance. As an illustration, Intel’s share of the Notebook market is expected to drop below 80 percent by 2023, according to DigiTimes:

“Intel is expected to lose nearly 50% of its orders from Apple in 2021 and will eventually obtain no orders from the client. Losing Apple's 10% market share and seeing AMD staying firmly with another 10%, Intel's share in the notebook market is likely to slip below 80% in 2023, the sources noted.”

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