Globalfoundries is apparently valuingaccording to Bloomberg, A possible fusion with one of its rivals: Taiwan’s chips manufacturer United Microelectronics Corp. (UMC)as part of a commitment to the creation of a stronger semiconductor manufacturer dedicated to the chips of older generations.
The company is about to incorporate into a new CEO, Tim Breen, who after its appointment in February as head of Globalfoundries will take its position this April. Precisely Breen has been open to assess options to reach an agreement with UMC. But it is not clear if an agreement will be reached, and the purchase of UMC can be complicated.
Globalfoundries has a market value of about 20,000 million dollars, while BMIs touches 17,000 million. Both are immersed in a cyclical business line, which implies a strong capital investment. The American Globalfoundries does not have the money in cash that would need to take the company immediately, so it would have to have important loans to do so, or make a capital extension.
But in addition to economic complications, there are others related to who would control the resulting business. In addition, geopolitics would further complicate the situation. A transaction of this type would probably need the authorization of Chinese regulators, something quite complicated to achieve. And it is likely that the Taiwan government refused to approve an agreement that put Globalfoundries at the head of the two companies, which would probably be what would end up happening if the agreement became a reality.
But if a fusion is finally remembered, and goes ahead, Globalfoundries would reach a notably larger scale than the current. For its part, UMC would have possibilities to diversify its ability outside of Taiwan and Chinaamong other things. But for now, there is no confirmation about whether you love parts have begun to negotiate, or if they have even set contacts.
