Intel Pursues Acquisition of GlobalFoundries... Sandwich Samsung (Comprehensive)

Acquisition worth 34 trillion won... Record-breaking M&A expected

Photo by WSJ

[Asia Economy Reporter Yujin Cho] Recently, U.S. Intel, which announced its entry into the semiconductor foundry market, is intensifying its efforts by pursuing the acquisition of GlobalFoundries, the industry's third-largest player. Meanwhile, Taiwan's TSMC, the industry leader, is pushing to establish its first semiconductor factory in Japan. This situation is creating simultaneous threats to Samsung Electronics in the global semiconductor market.

The Wall Street Journal (WSJ) reported on the 15th (local time), citing sources, that Intel, the world's largest semiconductor company, is pursuing the acquisition of GlobalFoundries.

According to sources, the acquisition price is expected to reach about $30 billion (approximately 34.26 trillion KRW). If this acquisition is completed, it will be the largest merger and acquisition (M&A) deal since Intel acquired Altera for $16.7 billion in 2015.

WSJ also noted that there is no guarantee the acquisition will be finalized, and GlobalFoundries may proceed with its planned initial public offering (IPO) as originally intended.

GlobalFoundries, headquartered in New York, USA, has Mubadala Investment Company, the sovereign wealth fund of the United Arab Emirates (UAE), as its largest shareholder. In this regard, a GlobalFoundries spokesperson denied the reports, stating, "We are not engaged in any negotiations with Intel."

The acquisition effort is reportedly being led by Intel CEO Pat Gelsinger. Since taking office in February, CEO Gelsinger has declared his intention to wrest control of the global semiconductor industry dominated by Taiwan's TSMC and has embarked on aggressive investments. TSMC also revealed on the same day that it is considering establishing a semiconductor factory in Japan, demonstrating swift action.

On the other hand, Samsung Electronics, which has been slow to accelerate facility investments, faces concerns of being caught in a sandwich between TSMC's advance and Intel's counterattack. Samsung Electronics, currently without its chairman, planned a foundry facility investment worth 20 trillion KRW in the United States, but the investment decision has been delayed.

According to Taiwanese research firm TrendForce, GlobalFoundries holds about a 7% market share in the global foundry market by revenue, ranking third alongside UMC, following TSMC (56%) and Samsung Electronics (18%).