Intel (INTC) Reportedly Offers Over $2 Billion To Acquire the Fabless Semiconductor SiFive as the Consolidation Trend in the Industry Is Nowhere Close to Slowing Down

Rohail Saleem

This is not investment advice. The author has no position in any of the stocks mentioned. has a disclosure and ethics policy.

Intel (NASDAQ:INTC), the semiconductor behemoth at the heart of a concerted push by the US to re-shore chip fabrication, seems to be looking to expand its product portfolio.

As an illustration, according to Bloomberg, Intel has reportedly offered over $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.

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Should this deal become a reality, it would mark the climax of growing bonhomie between Intel and SiFive. For instance, back in 2018, Intel was one of the participants in the Series C funding round of SiFive. Thereafter, in March 2021, SiFive announced a collaboration with the Intel Foundry Business (IFB) to develop innovative new RISC-V computing platforms.

Of course, unlike legacy Instruction Set Architectures (ISAs), RISC-V’s proponents believe that it addresses the skyrocketing cost of designing and manufacturing increasingly complex new chip architectures, given that that the ISA is layered, extensible, and flexible. It is hardly surprising, therefore, that some believe RISC-V to be the future.

Bear in mind that SiFive was last valued at $500 million, as per the data available at PitchBook. This means that Intel would be paying a premium of over 300 percent relative to SiFive’s 2020 valuation.

This development comes as Intel is seeking to enhance its chip fabrication footprint. The company has already committed $3.5 billion to upgrade its Rio Rancho, New Mexico, facility despite the lack of materialization of the attendant subsidies from the US administration. This upgrade would allow Intel to expand its Foveros advanced packaging capacity by 40 percent. For reference, Foveros is an advanced 3D packaging technology that allows the vertical stacking of compute tiles, thereby facilitating the integration of diverse computing engines across multiple process technologies. These developments are taking place under the ambit of Intel’s IDM 2.0 strategy that aims to place the company back at the top of the semiconductor food chain. As part of this overarching strategy, Intel is now investing $20 billion to build two new fabs at its Ocotillo facility in Arizona.

As part of the IDM 2.0, Intel is also scaling up its foundry capacity under the ambit of Intel Foundry Services (IFS), a completely separate business unit. Led by Dr. Randhir Thakur, 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.

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