Days after a report that Intel was in talks for a $30 billion bid to buy contract chip maker GlobalFoundries, the company said Monday it was planning a significant expansion of its manufacturing facilities in Malta, New York.
At an event in New York that included Secretary of Commerce Gina Raimondo and Senate Leader Chuck Schumer, executives of GlobalFoundries said it planned to double its production at its Malta site with a new manufacturing facility and a $1 billion investment in existing facilities. The investments will boost domestic chip production in the US amid a crippling global semiconductor shortage that has hurt sales of consumer goods ranging from home appliances to video game consoles.
“Our industry is expected to grow more in the next decade than it has in the past 50 years and GlobalFoundries is doing its best to do its part as we work together to address the growing demand for technological innovation for the betterment of humanity,” GlobalFoundries chief executive Tom Caulfield said.
GlobalFoundries said it plans to finance the new plant through private-public partnerships and will include federal and state investment. The White House has asked Congress for $50 billion to expand domestic semiconductor manufacturing and research.
Separately Monday, GlobalFoundries also said it was revamping its brand, adopting a new logo and rethinking its approach to marketing, among others, GlobalFoundries vide president and head of global brand and marketing Michelle Leyden Li said in a blog post.
The Wall Street Journal reported late thursday that
(ticker: INTC) was in talks with the owner of GlobalFoundries, Mubadala Investment, an investment arm of the government of Abu Dhabi. Baird analyst Tristan Gerra told Barron’s last week that Thursday’s report suggests talks have progressed as they’ve been going on since April.
If the reported deal closes, it would benefit
‘s newly unveiled Foundry Services unit, which aims to create a contract manufacturing business within the company. By purchasing GlobalFoundries, Intel would gain additional manufacturing capacity, more than 250 customers and the sales and marketing infrastructure needed to support the new unit. GlobalFoundries clients include the Department of Defense,
(QCOM), Intel rival
(AMD) and others.
GlobalFoundries is a close-knit company, so little public information about its financial performance is available. The company generated annual revenue of $5.7 billion in 2020, and wants to grow this year by 9% to 10%. According to Gerra’s estimates, GlobalFoundries generates a 20% profit margin before interest, taxes, depreciation and amortization. According to public filings, the chipmaker has a secured loan of $514.5 million due in 2026.
Shares of Intel fell 1.28% to $54.25 amid broad weakness in the tech sector. The PHLX Semiconductor Index (SOXX) fell 0.86%.
Write to email@example.com