Posted on 07/15/2021 6:49:52 PM PDT by blam
Thursday was another rough day for the semiconductor space as most of the biggest US-traded chipmakers traded in the red as the global chip shortage overshadowed what ended up being a solid earnings report from TSMC (which also affirmed plans to expand its production capacity in the US and Japan).
But even bigger news concerning the troubled semis space broke Thursday evening when WSJ reported that Intel has agreed to the biggest acquisition in its half-a-century existence.
According to the American business broadsheet of record, Intel has agreed to buy chip fabricator GlobalFoundaries for $30 billion. Most importantly, the deal marks the company’s biggest move yet into the foundry segment, a segment currently dominated by Taiwan Semiconductor Manufacturing – or TSMC – the world’s most important chipmaker. Put another way, the deal is the biggest volley yet in new Intel chief Pat Gelsinger’s “war” on TSMC. As we noted above, news of the deal is breaking shortly after Taiwan Semi announced its plans to expand production in the US, which is Intel’s “turf” (Intel is also investing $20 billion into expanding its production facilities in the American West).
Wowzers:
Intel is exploring a deal to buy GlobalFoundries, according to people familiar with the matter, in a move that would turbocharge the semiconductor giant’s plans to make more chips for other tech companies and rate as its largest acquisition ever. https://t.co/WaGqo3hgEX
— Mike Bird (@Birdyword) July 15, 2021
As for GlobalFoundaries, those who aren’t semiconductor experts can be forgiven for having never heard of the company. It’s presently wholly owned by Mubadala Investment Co (the Abu Dhabi sovereign wealth fund made infamous by its association with 1MDB, the Malaysian sovereign political slush fund that was pillaged by members of the former PM’s inner circle after being seeded with money raised by Goldman Sachs. The company was looking to go public, but instead of going public, or merging with a SPAC, Intel is going to buy it for $30MM).
Per WSJ, GlobalFoundaries itself doesn’t appear to be in direct talks with Intel – the deal is being negotiated by Mubadala, which clearly sees an exit opportunity in the fact that Intel and its biggest Western rivals are now going toe-to-toe with TSMC.
For all we know, one of these rivals could come through with a higher bid, stealing the deal from Intel, or sparking a bidding war.
WSJ describes GlobalFoundaries as “GlobalFoundries is one of the largest specialist chip-production companies. It was created when Intel rival Advanced Micro Devices in 2008 decided to spin off its chip-production operations.”
Interestingly, Intel rival AMD “remains a big customer for GlobalFoundries—agreeing to a multiyear, roughly $1.6 billion chip-component supply deal this year—and that could complicate a takeover by Intel. GlobalFoundries is relocating its corporate headquarters to Malta, N.Y. from Santa Clara, Calif.”
Tech analyst Patrick Moorhead tweeted following news of the deal that if it’s consumated, it would transform Intel into a “full-stack provider” with chips for critical technologies like 5G, IoT and much more. However, he expects the regulatory hurdles to be “immense” (keep in mind, President Biden is pushing sweeping antitrust policy changes by executive fiat).
On Intel acquiring GlobalFoundries: I can see why it would want to as it would make Intel a full stack provider with specialty tech for 5G, IoT and automotive. But the regulatory hurdles would be immense.
— Patrick Moorhead at #MSInspire (@PatrickMoorhead) July 15, 2021
One of the contributing factors behind the current global semiconductor shortage is that many chip designers like Nvidia and Qualcomm now prefer to outsource the fabrication of their chips to companies like TSMC and GlobalFoundaries. Just last month, GlobalFoundaries announced plans to build a new production site in Singapore for $4 billion.
This is a game changer.
What is being done now is too little too late.
Starting from around the dot com bubble, advanced chip fabs in the US one by one started shuttering their fabs and sending their chip manufacturing to Taiwan. Due to big tax breaks by the governments in Asia to promote chip manufacturing in their countries, and also dumbass free trade deals signed by US politicians, it became lucrative for US chip manufacturers to shut down facilities here in the US and outsource manufacturing to Taiwan. The consequences of the general cluelessness and lack of strategic foresight from the US are now becoming apparent as the US has lost it’s lead in advanced chip manufacturing. Now in a time when more and more things become dependent on chips and as we enter the era of 5G, Artificial Intelligence, etc more than half of world chip production and 100% of the most advanced technology node chip production is now dependent on a country right in the backyard of the CCP’s military.
Well played by China. While Dubya was blowing trillions of taxpayer money in Iraq and Obama was doing his hopey changey fluff, the CCP was planning and thinking decades in advance.
this is a big deal
AMD buys xilinx for $35 billion last fall. It was finally approved by the US and the EU this year. They will merge later this year. AMD has better chips the Intel.
I really hope Intel can come back, and win vs. TSMC.
I hereby nominate this for consideration of "Post of the Year".
They purchase to consume.
AZ is a base plant.
Real action is Oregon.
Fluck Intel . AMD Ryzen go ! I recently bought a Lenovo all in one PC . So far the best PC I’ve even owned . Others : Fujitsu , Dell , and HP , had major problems within the first couple of months .
China owns the mines. I wonder how many p Hunter Biden paintings end up in China.
Ok thanks for the info.
“No they don’t.”
Yes, they do.
May 13, 2021
AMD plans to purchase $1.6 billion worth of wafers from GlobalFoundries in the 2022 to 2024 timeframe, the chipmaker revealed today (May 13) in an SEC filing.
In the face of global semiconductor shortages and record-high demand, AMD is renegotiating its Wafer Supply Agreement to secure additional capacity. The partners’ previous agreement required both parties to agree to any changes to annual wafer purchase targets and wafer pricing beyond 2021.
The “Amended and Restated Seventh Amendment to the Wafer Supply Agreement” applies to purchases at the 12 nm and 14 nm technology nodes for the period beginning May 12, 2021 and continuing through December 31, 2024.
The net result is that as of this moment, AMD has slated all of their currently-announced leading-edge 7nm CPUs and GPUs to use TSMC’s 7nm process, and AMD is further free to tap Samsung as well if they desire. Past that, the latest WSA update will see AMD continue to rely heavily on GlobalFoundries for any larger nodes, as the firm will remain AMD’s long-term strategic supplier for 12nm and above. The new agreement sets purchase commitments by AMD and prices by GlobalFoundries through 2021.
(2019)
Meanwhile, it’s worth noting that while the latest WSA amendment lays out detailed volume and pricing plans through 2021, AMD’s overall agreement with GlobalFoundries still runs through 2024. So in the next couple of years, AMD and GlobalFoundries will still need to decide how the fab will supply AMD over the final years of the agreement.
“The reason they dropped the program is no one was interested in a process 30% slower and 30% more expensive than their 14nm process.”
You, the only one saying AMD does not purchase from GF, are the only one saying that.
AMD split with GF and went with TSMC, which is ten times the size of GF.
Intel’s Interest in GlobalFoundries Could Affect These 4 Chipmakers
The chipmaker could be gearing up for its biggest takeover ever.
Leo Sun
Jul 21, 2021 at 12:00PM
https://www.fool.com/investing/2021/07/21/intels-interest-in-globalfoundries-could-affect-th/
Intel Says First 10nm Desktop CPUs Land in Second Half of 2021
By Paul Alcorn July 23, 2020
https://www.tomshardware.com/news/intel-says-first-10nm-desktop-cpus-land-in-second-half-of-2021
Intel’s first 10nm desktop CPUs are still a year away…oh and 7nm is delayed (again)
By Paul Lilly July 24, 2020
https://www.pcgamer.com/intels-first-10nm-desktop-cpus-are-still-a-year-awayoh-and-7nm-is-delayed-again/
10nm? 7nm? Who cares? Intel may be trying to ditch chip technology definitions
What won’t change is how well chips perform in games and other applications, and how much power they consume.
By Mark Hachman
Senior Editor, PCWorld | MAR 30, 2021 10:39 AM PDT
https://www.pcworld.com/article/3613590/why-intel-may-move-away-from-defining-its-chips-as-10nm-14nm-and-more.html
Intel 10nm Tiger Lake CPUs Arrive on 11th Gen Desktop Platforms, B-Series Chips With Willow Cove Cores & 65W TDPs
By Hassan Mujtaba
May 29, 2021 00:10 EDT
https://wccftech.com/intel-10nm-tiger-lake-cpus-arrive-desktop-pc-platform-b-series-chips-willow-cove-cores-65w-tdp/
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