"Semiconductor Foundry 4th and 5th Ranked Taiwan UMC and US GF Considering Merger"

United Microelectronics Corporation (UMC), the world's 4th largest foundry (semiconductor contract manufacturing) based in Taiwan, and GlobalFoundries (GF), the 5th largest based in the United States, are considering a merger. If the merger is realized, they would surpass China's SMIC (Zhongxin Guoji) to become the 3rd largest in scale.

According to a report by Nihon Keizai Shimbun on the 1st, UMC and GF are reviewing the possibility of a merger. This merger is reportedly being considered with the aim of securing supply capacity within the United States amid rising tensions between China and Taiwan.

Nikkei cited the background of this merger review as "an indication of the United States' intention to reduce dependence on Taiwan for semiconductors," adding, "If the merger takes place, it could become an alternative supplier to Taiwan's TSMC in mature process semiconductors."

UMC has production lines in Taiwan, China, and Japan, and in cooperation with Intel, with whom it formed a partnership last year, aims to produce 12-nanometer (nm, one billionth of a meter) semiconductors in the United States by 2027.

GF originated from the semiconductor manufacturing division spun off from AMD in the United States. Its major shareholder is a fund affiliated with the Abu Dhabi government of the United Arab Emirates (UAE), which invested in 2009, and in 2015, GF also acquired the semiconductor manufacturing division of IBM in the United States.