GlobalFoundries weighs merger with No. 2 Taiwan chipmaker UMC: sources

[Barnsley]

GlobalFoundries weighs merger with No. 2 Taiwan chipmaker UMC: sources​

Move could secure American access to older chips amid China aggression

GlobalFoundries and UMC each control around 5% of the global market for contract chipmaking. (Photos by Reuters)

CHENG TING-FANG
March 31, 2025 23:35 JST
TAIPEI -- U.S. contract chipmaker GlobalFoundries and United Microelectronics Corp., Taiwan's No. 2 chipmaker, are exploring the possibility of a merger amid American efforts to mitigate risks surrounding the Taiwan Strait and fend off growing competition from China in mature chips, Nikkei Asia has learned.

In an assessment plan seen by Nikkei Asia, a tie-up of GlobalFoundries-UMC would create a bigger, U.S.-based company with a production footprint across Asia, the U.S. and Europe. The aim of the merger would be to create a company with the economic scale to ensure America has access to mature chips as tensions simmer between China and Taiwan and as China produces more chips on its own, according to the plan.

The combined company would later invest in research and development in the U.S. and could eventually become an alternative to Taiwan Semiconductor Manufacturing Co., the world's top chipmaker, according to the assessment. TSMC holds significant shares in the markets for both mature and cutting-edge chips.
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GlobalFoundries has been in touch with UMC about a potential merger, and some government officials from the U.S. and Taiwan are aware of the discussions, two sources told Nikkei Asia. The chipmakers discussed a potential partnership about two years ago, but those talks did not progress, one of the people said.

The U.S. government -- across both the Biden and Trump administrations -- has tried in various ways to encourage Taiwanese companies to boost U.S. chip production, two people told Nikkei Asia. These efforts include urging UMC several times to build or buy existing production facilities in the U.S., one of the people said. UMC earlier ruled out the idea, saying it would be too expensive to operate plants in America.

Industry executives told Nikkei Asia that a potential GlobalFoundries-UMC deal would likely face regulatory scrutiny from Taiwan and China. China previously blocked Intel's attempt to acquire Israel-based Tower Semiconductor to increase its capacity in the foundry segment, the business of making chips for outside clients.

GlobalFoundries declined to comment.

TSMC's additional $100 billion investment in the U.S. has already caused public concern about a potential weakening of Taiwan's flagship chip industry.

Regardless of the outcome, the GlobalFoundries-UMC talks underscore America's desire to lower its dependence on Taiwan, which is home to the world's second-largest chip economy by revenue. In mature chips, Taiwan had about 44% of the global market as of 2023, according to industry association SEMI, while China controls 31%, and the U.S. holds about 5%.

Mature chips -- or older, less advanced chips -- account for more than 70% of global semiconductor demand and are used in a variety of critical sectors, from infrastructure to defense. As relations between China and Taiwan continue to deteriorate, the U.S. has grown more concerned about its access to both cutting-edge and mature chips.

Founded in 1980, UMC was Taiwan's first chipmaker, though today it is smaller than TSMC. It employs over 15,000 people in Taiwan, and around 20,000 in total globally and plays a vital role in Taiwan's flagship semiconductor industry. It serves many top chip developers, including Qualcomm, Nvidia, MediaTek, NXP and Infineon.

Unlike TSMC, which still counts the government-owned National Development Fund (NDF) of Taiwan as its largest single shareholder, UMC's only government-linked major investor is the Labor Pension Fund, which has a roughly 1.59% stake in the chipmaker, according to its annual report of 2023.

GlobalFoundries is headquartered in the U.S. but majority owned by Mubadala Investment Co., the sovereign fund of Abu Dhabi. A chip executive told Nikkei Asia that it is doubtful the U.S. government would fully support a chipmaker that is not American-owned.

UMC generated 232.3 billion New Taiwan dollars ($7.21billion) in revenue last year and a profit of NT$47.2 billion, while GlobalFoundries reported a net loss of $265 million on revenue of $6.75 billion. The two companies each have a roughly 5% share of the global contract chipmaking market.

Suppliers of mature chips are facing increasing headwinds as China scales up production. In 2024, top Chinese chipmaker SMIC surpassed UMC by revenue to become the world's third-largest contract chipmaker. Bolstered by substantial government support and a push for domestically produced chips, SMIC's market value has exceeded that of leading European chipmakers such as NXP, Infineon and STMicroelectronics, as well as major players like Japan's Renesas Electronics and U.S.-based On Semiconductor. Some top suppliers such as TSMC and ASE Technology Holding, meanwhile, are slowing their expansion of mature-chip-related capacity in Japan and Malaysia.

To mitigate geopolitical risks, UMC partnered with Intel in early 2024 to co-develop 12-nm chips for various applications, aiming to attract customers and begin U.S. production by 2027. UMC for its part has expanded its operations in Singapore to diversify its manufacturing footprint.
UMC's chief financial officer, Chitung Liu, told Nikkei Asia that the Taiwanese chipmaker is currently not working on any merger deals and would not respond to industry information regarding specific peers such as GlobalFoundries. Liu said UMC maintains good communication with all of the governments where it operates, including in the U.S. He added that the company has production capacity in Taiwan, Singapore, China and Japan, as well as a partnership with top U.S. chipmaker Intel.

Liu said his company would review any proposals using the highest corporate governance standard to ensure the best interests of Shareholders.

https://asia.nikkei.com/Business/Te...erger-with-No.-2-Taiwan-chipmaker-UMC-sources

 

[Barnsley]

Some news from the coal face!!!

 

[osnium]

GlobalFoundries weighs merger with No. 2 Taiwan chipmaker UMC: sources​

Move could secure American access to older chips amid China aggression

GlobalFoundries and UMC each control around 5% of the global market for contract chipmaking. (Photos by Reuters)

CHENG TING-FANG
March 31, 2025 23:35 JST
TAIPEI -- U.S. contract chipmaker GlobalFoundries and United Microelectronics Corp., Taiwan's No. 2 chipmaker, are exploring the possibility of a merger amid American efforts to mitigate risks surrounding the Taiwan Strait and fend off growing competition from China in mature chips, Nikkei Asia has learned.

In an assessment plan seen by Nikkei Asia, a tie-up of GlobalFoundries-UMC would create a bigger, U.S.-based company with a production footprint across Asia, the U.S. and Europe. The aim of the merger would be to create a company with the economic scale to ensure America has access to mature chips as tensions simmer between China and Taiwan and as China produces more chips on its own, according to the plan.

The combined company would later invest in research and development in the U.S. and could eventually become an alternative to Taiwan Semiconductor Manufacturing Co., the world's top chipmaker, according to the assessment. TSMC holds significant shares in the markets for both mature and cutting-edge chips.
Advertisement

GlobalFoundries has been in touch with UMC about a potential merger, and some government officials from the U.S. and Taiwan are aware of the discussions, two sources told Nikkei Asia. The chipmakers discussed a potential partnership about two years ago, but those talks did not progress, one of the people said.

The U.S. government -- across both the Biden and Trump administrations -- has tried in various ways to encourage Taiwanese companies to boost U.S. chip production, two people told Nikkei Asia. These efforts include urging UMC several times to build or buy existing production facilities in the U.S., one of the people said. UMC earlier ruled out the idea, saying it would be too expensive to operate plants in America.

Industry executives told Nikkei Asia that a potential GlobalFoundries-UMC deal would likely face regulatory scrutiny from Taiwan and China. China previously blocked Intel's attempt to acquire Israel-based Tower Semiconductor to increase its capacity in the foundry segment, the business of making chips for outside clients.

GlobalFoundries declined to comment.

TSMC's additional $100 billion investment in the U.S. has already caused public concern about a potential weakening of Taiwan's flagship chip industry.

Regardless of the outcome, the GlobalFoundries-UMC talks underscore America's desire to lower its dependence on Taiwan, which is home to the world's second-largest chip economy by revenue. In mature chips, Taiwan had about 44% of the global market as of 2023, according to industry association SEMI, while China controls 31%, and the U.S. holds about 5%.

Mature chips -- or older, less advanced chips -- account for more than 70% of global semiconductor demand and are used in a variety of critical sectors, from infrastructure to defense. As relations between China and Taiwan continue to deteriorate, the U.S. has grown more concerned about its access to both cutting-edge and mature chips.

Founded in 1980, UMC was Taiwan's first chipmaker, though today it is smaller than TSMC. It employs over 15,000 people in Taiwan, and around 20,000 in total globally and plays a vital role in Taiwan's flagship semiconductor industry. It serves many top chip developers, including Qualcomm, Nvidia, MediaTek, NXP and Infineon.

Unlike TSMC, which still counts the government-owned National Development Fund (NDF) of Taiwan as its largest single shareholder, UMC's only government-linked major investor is the Labor Pension Fund, which has a roughly 1.59% stake in the chipmaker, according to its annual report of 2023.

GlobalFoundries is headquartered in the U.S. but majority owned by Mubadala Investment Co., the sovereign fund of Abu Dhabi. A chip executive told Nikkei Asia that it is doubtful the U.S. government would fully support a chipmaker that is not American-owned.

UMC generated 232.3 billion New Taiwan dollars ($7.21billion) in revenue last year and a profit of NT$47.2 billion, while GlobalFoundries reported a net loss of $265 million on revenue of $6.75 billion. The two companies each have a roughly 5% share of the global contract chipmaking market.

Suppliers of mature chips are facing increasing headwinds as China scales up production. In 2024, top Chinese chipmaker SMIC surpassed UMC by revenue to become the world's third-largest contract chipmaker. Bolstered by substantial government support and a push for domestically produced chips, SMIC's market value has exceeded that of leading European chipmakers such as NXP, Infineon and STMicroelectronics, as well as major players like Japan's Renesas Electronics and U.S.-based On Semiconductor. Some top suppliers such as TSMC and ASE Technology Holding, meanwhile, are slowing their expansion of mature-chip-related capacity in Japan and Malaysia.

To mitigate geopolitical risks, UMC partnered with Intel in early 2024 to co-develop 12-nm chips for various applications, aiming to attract customers and begin U.S. production by 2027. UMC for its part has expanded its operations in Singapore to diversify its manufacturing footprint.
UMC's chief financial officer, Chitung Liu, told Nikkei Asia that the Taiwanese chipmaker is currently not working on any merger deals and would not respond to industry information regarding specific peers such as GlobalFoundries. Liu said UMC maintains good communication with all of the governments where it operates, including in the U.S. He added that the company has production capacity in Taiwan, Singapore, China and Japan, as well as a partnership with top U.S. chipmaker Intel.

Liu said his company would review any proposals using the highest corporate governance standard to ensure the best interests of Shareholders.

https://asia.nikkei.com/Business/Te...erger-with-No.-2-Taiwan-chipmaker-UMC-sources

In such a merger, what would happen to the Intel-UMC 12nm project?

 

[hskuo]

GlobalFoundries weighs merger with No. 2 Taiwan chipmaker UMC: sources​

Move could secure American access to older chips amid China aggression

GlobalFoundries and UMC each control around 5% of the global market for contract chipmaking. (Photos by Reuters)

CHENG TING-FANG
March 31, 2025 23:35 JST
TAIPEI -- U.S. contract chipmaker GlobalFoundries and United Microelectronics Corp., Taiwan's No. 2 chipmaker, are exploring the possibility of a merger amid American efforts to mitigate risks surrounding the Taiwan Strait and fend off growing competition from China in mature chips, Nikkei Asia has learned.

In an assessment plan seen by Nikkei Asia, a tie-up of GlobalFoundries-UMC would create a bigger, U.S.-based company with a production footprint across Asia, the U.S. and Europe. The aim of the merger would be to create a company with the economic scale to ensure America has access to mature chips as tensions simmer between China and Taiwan and as China produces more chips on its own, according to the plan.

The combined company would later invest in research and development in the U.S. and could eventually become an alternative to Taiwan Semiconductor Manufacturing Co., the world's top chipmaker, according to the assessment. TSMC holds significant shares in the markets for both mature and cutting-edge chips.
Advertisement

GlobalFoundries has been in touch with UMC about a potential merger, and some government officials from the U.S. and Taiwan are aware of the discussions, two sources told Nikkei Asia. The chipmakers discussed a potential partnership about two years ago, but those talks did not progress, one of the people said.

The U.S. government -- across both the Biden and Trump administrations -- has tried in various ways to encourage Taiwanese companies to boost U.S. chip production, two people told Nikkei Asia. These efforts include urging UMC several times to build or buy existing production facilities in the U.S., one of the people said. UMC earlier ruled out the idea, saying it would be too expensive to operate plants in America.

Industry executives told Nikkei Asia that a potential GlobalFoundries-UMC deal would likely face regulatory scrutiny from Taiwan and China. China previously blocked Intel's attempt to acquire Israel-based Tower Semiconductor to increase its capacity in the foundry segment, the business of making chips for outside clients.

GlobalFoundries declined to comment.

TSMC's additional $100 billion investment in the U.S. has already caused public concern about a potential weakening of Taiwan's flagship chip industry.

Regardless of the outcome, the GlobalFoundries-UMC talks underscore America's desire to lower its dependence on Taiwan, which is home to the world's second-largest chip economy by revenue. In mature chips, Taiwan had about 44% of the global market as of 2023, according to industry association SEMI, while China controls 31%, and the U.S. holds about 5%.

Mature chips -- or older, less advanced chips -- account for more than 70% of global semiconductor demand and are used in a variety of critical sectors, from infrastructure to defense. As relations between China and Taiwan continue to deteriorate, the U.S. has grown more concerned about its access to both cutting-edge and mature chips.

Founded in 1980, UMC was Taiwan's first chipmaker, though today it is smaller than TSMC. It employs over 15,000 people in Taiwan, and around 20,000 in total globally and plays a vital role in Taiwan's flagship semiconductor industry. It serves many top chip developers, including Qualcomm, Nvidia, MediaTek, NXP and Infineon.

Unlike TSMC, which still counts the government-owned National Development Fund (NDF) of Taiwan as its largest single shareholder, UMC's only government-linked major investor is the Labor Pension Fund, which has a roughly 1.59% stake in the chipmaker, according to its annual report of 2023.

GlobalFoundries is headquartered in the U.S. but majority owned by Mubadala Investment Co., the sovereign fund of Abu Dhabi. A chip executive told Nikkei Asia that it is doubtful the U.S. government would fully support a chipmaker that is not American-owned.

UMC generated 232.3 billion New Taiwan dollars ($7.21billion) in revenue last year and a profit of NT$47.2 billion, while GlobalFoundries reported a net loss of $265 million on revenue of $6.75 billion. The two companies each have a roughly 5% share of the global contract chipmaking market.

Suppliers of mature chips are facing increasing headwinds as China scales up production. In 2024, top Chinese chipmaker SMIC surpassed UMC by revenue to become the world's third-largest contract chipmaker. Bolstered by substantial government support and a push for domestically produced chips, SMIC's market value has exceeded that of leading European chipmakers such as NXP, Infineon and STMicroelectronics, as well as major players like Japan's Renesas Electronics and U.S.-based On Semiconductor. Some top suppliers such as TSMC and ASE Technology Holding, meanwhile, are slowing their expansion of mature-chip-related capacity in Japan and Malaysia.

To mitigate geopolitical risks, UMC partnered with Intel in early 2024 to co-develop 12-nm chips for various applications, aiming to attract customers and begin U.S. production by 2027. UMC for its part has expanded its operations in Singapore to diversify its manufacturing footprint.
UMC's chief financial officer, Chitung Liu, told Nikkei Asia that the Taiwanese chipmaker is currently not working on any merger deals and would not respond to industry information regarding specific peers such as GlobalFoundries. Liu said UMC maintains good communication with all of the governments where it operates, including in the U.S. He added that the company has production capacity in Taiwan, Singapore, China and Japan, as well as a partnership with top U.S. chipmaker Intel.

Liu said his company would review any proposals using the highest corporate governance standard to ensure the best interests of Shareholders.

https://asia.nikkei.com/Business/Te...erger-with-No.-2-Taiwan-chipmaker-UMC-sources

Be honest, I can not see the synergy of the merge. But it could be the first step of intel-GF-UMC Alliance.

 

[osnium]

Be honest, I can not see the synergy of the merge. But it could be the first step of intel-GF-UMC Alliance.

Yes. GF taking over UMC and Intel Foundry could make for a very solid second tier foundry.

 

[nghanayem]

Yes. GF taking over UMC and Intel Foundry could make for a very solid second tier foundry.

Why would GF be in charge? If anything they would be last in line. UMC is the better foundry company, and if we want to entertain the less likely idea of Intel selling their manufacturing arm to the combined entity; Intel foundry has more scale than both of them combined and would also be the technical muscle. So if said rumor isn't BS or a half trust (like most of the rumors that float around out there) and said merger is a pure merger (ala CPChem, ExxonMobil, Elpidia, or Renasis) rather than a purchase/acquisition (GF and Chartered, Micron and Elpidia, or SK and Hyundai electronics) I don't think GF would or should be leading anything.

 

[hist78]

Why would GF be in charge? If anything they would be last in line. UMC is the better foundry company, and if we want to entertain the less likely idea of Intel selling their manufacturing arm to the combined entity; Intel foundry has more scale than both of them combined and would also be the technical muscle. So if said rumor isn't BS or a half trust (like most of the rumors that float around out there) and said merger is a pure merger (ala CPChem, ExxonMobil, Elpidia, or Renasis) rather than a purchase/acquisition (GF and Chartered, Micron and Elpidia, or SK and Hyundai electronics) I don't think GF would or should be leading anything.

I suspect it's an exit strategy started by Mubadala Investment, a sovereign wealth fund of the United Arab Emirates. Mubadala Investment still owns about 81% of Globalfoundries. Through the merger they may cash out some of the holdings and reduce their stakes at Globalfoundries.

 

[hist78]

Why would GF be in charge? If anything they would be last in line. UMC is the better foundry company, and if we want to entertain the less likely idea of Intel selling their manufacturing arm to the combined entity; Intel foundry has more scale than both of them combined and would also be the technical muscle. So if said rumor isn't BS or a half trust (like most of the rumors that float around out there) and said merger is a pure merger (ala CPChem, ExxonMobil, Elpidia, or Renasis) rather than a purchase/acquisition (GF and Chartered, Micron and Elpidia, or SK and Hyundai electronics) I don't think GF would or should be leading anything.

BTW, what happened with those former IBM semiconductor related parents that Globalfoundries got from the acquisition of IBM semiconductor manufacturing division? Did they help Globalfoundries in terms of generating new products, revenue, and profits?

 

[osnium]

Why would GF be in charge? If anything they would be last in line. UMC is the better foundry company, and if we want to entertain the less likely idea of Intel selling their manufacturing arm to the combined entity; Intel foundry has more scale than both of them combined and would also be the technical muscle. So if said rumor isn't BS or a half trust (like most of the rumors that float around out there) and said merger is a pure merger (ala CPChem, ExxonMobil, Elpidia, or Renasis) rather than a purchase/acquisition (GF and Chartered, Micron and Elpidia, or SK and Hyundai electronics) I don't think GF would or should be leading anything.

GF would be in charge presumably because the US would not want the largest US headquartered pure play foundry falling into Taiwanese hands. From a process node perspective, I think GF has a solid Finfet node while UMC does not.

 

[nghanayem]

GF would be in charge presumably because the US would not want the largest US headquartered pure play foundry falling into Taiwanese hands.

I doubt Taiwan would be jazzed about their baby becoming the underling of a GF. There is also the little detail that GF is already foreign owned and the US hasn't put any pressure towards changing that.

From a process node perspective, I think GF has a solid Finfet node while UMC does not.

No: they don't. Samsung has a solid finFET node that GF licences and an SOI finFET process that was developed by IBM, made in IBM's old fab, and was never a foundry offering. The last (at the time) leading edge node that GF had was their 32nm/28nm SOI and 28nm bulk processes. Internal 22/20nm, 14nm, 10nm, and 7nm were all cancelled before GF even made a single dime in revenue. UMC had (and still has) a successful 22/20nm process. Which funnily enough was more successful than TSMC's own attempts at that node. UMC has also at least at some point made revenue (albeit meager revenue) from a self developed finFET process.

 

[Daniel Nenni]

I doubt Taiwan would be jazzed about their baby becoming the underling of a GF. There is also the little detail that GF is already foreign owned and the US hasn't put any pressure towards changing that.

No: they don't. Samsung has a solid finFET node that GF licences and an SOI finFET process that was developed by IBM, made in IBM's old fab, and was never a foundry offering. The last (at the time) leading edge node that GF had was their 32nm/28nm SOI and 28nm bulk processes. Internal 22/20nm, 14nm, 10nm, and 7nm were all cancelled before GF even made a single dime in revenue. UMC had (and still has) a successful 22/20nm process. Which funnily enough was more successful than TSMC's own attempts at that node. UMC has also at least at some point made revenue (albeit meager revenue) from a self developed finFET process.

I do not see this as being a good idea. I know both companies and they are very different. GF licensed Samsung's 14nm and has done very well with it but both companies are weak in R&D and sales/marketing.

I also do not see Taiwan being happy with this. I wondered out loud that Samsung Foundry should buy UMC one time while I was in Taiwan and the reaction was not good at all. TSMC and UMC are favored sons of Taiwan and any change of ownership would be a problem.

 

[hist78]

I do not see this as being a good idea. I know both companies and they are very different. GF licensed Samsung's 14nm and has done very well with it but both companies are weak in R&D and sales/marketing.

I also do not see Taiwan being happy with this. I wondered out loud that Samsung Foundry should buy UMC one time while I was in Taiwan and the reaction was not good at all. TSMC and UMC are favored sons of Taiwan and any change of ownership would be a problem.

The ruling party in Taiwan, the DPP, is actually a minority party in Taiwan's Congress. If they were to allow UMC to be acquired by GlobalFoundries and subsequently relocate its headquarters to the US, it would amount to political suicide.

 

[osnium]

The ruling party in Taiwan, the DPP, is actually a minority party in Taiwan's Congress. If they were to allow UMC to be acquired by GlobalFoundries and subsequently relocate its headquarters to the US, it would amount to political suicide.

Is the ruling party in Taiwan worried about Intel working with UMC in terms of loss of specialized foundry knowhow to the US?

 

[hskuo]

The ruling party in Taiwan, the DPP, is actually a minority party in Taiwan's Congress. If they were to allow UMC to be acquired by GlobalFoundries and subsequently relocate its headquarters to the US, it would amount to political suicide.

Oh, I thought everyone just cares about tsmc only and forgets all others.

 

[Maximus]

Is the ruling party in Taiwan worried about Intel working with UMC in terms of loss of specialized foundry knowhow to the US?

I don't think Taiwanese people are concerned that much about UMC's knowhow loss, as they don't perceive it as highly valuable. However, they are certainly worried about TSMC's knowhow loss. There is significant concern about relocating the headquarters or R&D center or change company's ownership/nationality. Turning UMC into a U.S. company would undoubtedly be disastrous for Taiwan's ruling party.

 

[Artificer60]

I just about spit my drink on the screen when I read this bit. "The combined company would later invest in research and development in the U.S. and could eventually become an alternative to Taiwan Semiconductor Manufacturing Co., the world's top chipmaker, according to the assessment." If only it were that easy.

 

[Barnsley]

Why would GF be in charge? If anything they would be last in line. UMC is the better foundry company, and if we want to entertain the less likely idea of Intel selling their manufacturing arm to the combined entity; Intel foundry has more scale than both of them combined and would also be the technical muscle. So if said rumor isn't BS or a half trust (like most of the rumors that float around out there) and said merger is a pure merger (ala CPChem, ExxonMobil, Elpidia, or Renasis) rather than a purchase/acquisition (GF and Chartered, Micron and Elpidia, or SK and Hyundai electronics) I don't think GF would or should be leading anything.

Its slowly improving but the management on the Singapore side had a very poor attitude towards suppliers , still have some remnants left from Chartered days but they are slowly being weeded out.
They had zero thoughts on collaboration just dishing out punishments.
Thats what you get when you put Civil Servants and political appointees in charge I guess?

I would not have GF run anything personally , havent shown themselves capable of anything , even when given to them.