Intel’s plans to buy GlobaFoundries, reported in the Wall St Journal, would to give it a boost in its move to a foundry model but would create more upheaval for plans for wafer fabs in Europe.

A takeover of Globalfoundries by Intel could have an impact in Europe. Globalfoundries is already established in Dresden with plans to expand manufacturing there while Intel has pledged it will also build a wafer fab in Europe. If Intel were to take over Globalfoundries to create the core of its Intel Foundry Services business it may choose to stagger the construction of wafer fabs in Europe or even to postpone one indefinitely. Meanwhile TSMC is considering building a wafer fab in Europe targetting the 16nm to 12nm process technologies which is where GlobalFoundries also operates.

The WSJ did not name its sources but the move would help Intel with a planned move into foundry-style manufacturing and could fit with plans of Globalfoundries”s owner Mubadala Investment Co. to sell off the company. At present the plan of record is for Globalfoundries to stage an IPO in 2022.

However, at the same time Globalfoundries has become a “behind-the-leading-edge” foundry so while the acquisition would help Intel culturally it would not help Intel with leading-edge manufacturing processes. Mubadala is the sovereign wealth fund of the Abu Dhabi government and bought the manufacturing arm of Advanced Micro Devices to form Globalfoundries more than a decade ago. Much of AMD’s output has migrated to TSMC, the technology leader in chip manufacturing, as Globalfoundries opted out of moving down to 7nm and beyond and has focused on more specialised processes just behind the leading-edge.

Intel under recently appointed CEO Pat Gelsinger is seeking to reboot its manufacturing capabilities which had fallen behind those of foundry supplier TSMC.

Globalfoundries has reportedly denied it is involved in any discussions but that does not eliminate the possibility that Intel is talking with Mubadala.

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