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Is GF a good buy for Intel?

Amanda Liang, Taipei; Jessie Shen, DIGITIMES 0

Intel is reportedly eyeing Globalfoundries for acquisition valued at an estimated US$30 billion. Will the acquisition be a good buy and follow Intel's IDM 2.0 strategy that was unveiled earlier this year?

Intel disclosed previously plans to spend as much as US$20 billion on building new fabs and expanding its foundry services, which is part of its new IDM 2.0 model under which the company plans significant manufacturing expansions and to become a major provider of foundry capacity in the US and Europe.

GF was formerly a manufacturing arm of AMD before being owned by Mubadala Investment, an investment division of the Abu Dhabi government. GF has four 300mm fabs and two 200mm fabs in production.

GF's Fab 1 in Dresden houses more than 52,000 square meters of cleanroom, and is the largest semiconductor manufacturing site in Europe. According to GF's CSR report 2020, GF Dresden contributes significantly to the advancement of a leading-edge semiconductor industry in Europe, and specifically the high-tech cluster in Saxony.

It is worth noting that Intel CEO Pat Gelsinger reportedly paid visits recently to Europe exploring the feasibility of setting up a chip plant locally with government subsidies.

GF's Singapore Woodlands campus is home to one 200mm gigafab (Fabs 2, 3 and 5) and one 300mm fab (Fab 7/7G). GF in late 2019 transferred the ownership of Fab 3E located at the GF Singapore Tampines campus to fellow Taiwan-based foundry Vanguard International Semiconductor (VIS). The GF Singapore fabs were previously owned by Chartered Semiconductor Manufacturing and were acquired by GF in 2010.

GF also operates a 12-inch fab, Fab 8, in Malta, New York. Total capital investment for the Fab 8 campus has exceeded US$15 billion, with the majority of this investment being directed towards advanced 14/12nm technologies. With 450,000 square feet of cleanroom space and continued expansion, GF's Fab 8 is one of the leaders in advanced manufacturing in the US.

GF also acquired IBM's Vermont site as part of the IBM Microelectronics business it acquired previously. Dubbed Fab 9, it is the largest private manufacturing employer in the state of Vermont.

Besides, originally developed by IBM in 1962, the East Fishkill, NY site grew and evolved into a major R&D and manufacturing center. The site joined GF as part of IBM's microelectronics business acquisition in 2015 and is now known as GF Fab 10. In April 2019, GF announced the launch of its strategic partnership with ON Semiconductor, through which GF will transfer ownership of the Fab 10 facility to ON at the end of 2022.

Intel has 15 wafer fabs in production worldwide at 10 locations, according to its website. Intel's fab production sites in the US are located in Arizona, Massachusetts, New Mexico and Oregon. Intel also has fabs in Ireland, Israel and China.

Major acquisitions of CPU makers, 2015-2020

Time

Event

2015

Intel acquired Altera for US$16.7 billion

2017

Intel acquired Mobileye for US$15.3 billion

Jul 2019

Intel sold its handset modem biz to Apple for US$1 billion

Dec 2019

Intel acquired Habana Labs for US$2 billion

2020

Nvidia announced deal to buy ARM for US$40 billion
AMD disclosed deal to buy Xilinx for US$35 billion

Oct 2020

Intel unveiled deal to sell NAND flash biz to SK Hynix for US$9 billion

Source: Companies, compiled by Digitimes, July 2021

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