GlobalFoundries, UMC explore merger, says report
This deal is in the rumor stage. It may never happen.
By Mark LaPedus
In what could alter the landscape in the foundry business, GlobalFoundries (GF) and UMC are exploring a possible merger, according to a report from Nikkei Asia.
GF, UMC and other foundry vendors compete in the market for mature nodes, which involves chips for automotive, consumer and industrial applications. But for some time, this segment has been in a major slump, prompting some to believe that the foundry business is ripe for some consolidation.
Nonetheless, a possible GF-UMC deal is still in the rumor stage. It's unclear if GF and UMC would ever merge. An official from UMC said: ‘‘The company's policy is not to comment on market speculation.’’ GF officials declined to comment.
Both Taiwan’s UMC and U.S.-based GF are significant players in the foundry business. Foundry vendors make chips for other companies in large facilities called fabs.
Based on the rankings in the fourth quarter of 2024, UMC was the world’s fourth largest foundry vendor with 4.7% share, while GF was in fifth place with 4.6% share, according to TrendForce. TSMC remains in first place in the foundry rankings with a dominate 67.1% market share, according to the research firm. (See chart below for the foundry rankings.)
GF and UMC do not compete in the leading-edge foundry market. In the leading-edge foundry segment, TSMC dominates the market. TSMC continues to see strong demand, thanks to the booming AI market.
Meanwhile, TSMC, GF, UMC and many others compete in the mature-node foundry market. This is a critical part of the semiconductor industry. The mature-node markets involve chips for automotive, consumer and industrial apps.
But for some time, the automotive, consumer and industrial chip markets have been in a slump. This in turn has impacted the mature-node foundry sector. For some time, there has been oversupply, lackluster demand and price pressure in the mature-node foundry business.
China’s foundry vendors, which compete in this segment, have simply built up too much capacity in the market. This in turn has put price pressure on GF, Tower, TSMC and other multinational foundry vendors in the market.
Still to be seen, however, is if UMC and GF would actually merge. If the two companies would merge, there would a considerable overlap in their respective process portfolios.
At present, UMC offers processes at 22nm and above. The company has developed low-power, RF and other technologies in both 300mm and 200mm fabs. UMC is in the process developing a 12nm finFET process with Intel.
Meanwhile, GF’s most advanced process is a 16nm/12nm finFET process. It also offers processes at 22nm and above. The company also offers a 22nm FD-SOI process.
It would make more sense if Intel would make a major move and acquire GF or UMC. Intel is trying to get a foothold in the foundry business. Intel has a leading-edge foundry process. But it lacks a mature-node process portfolio. Acquiring GF or UMC would fill the gap. But it’s unclear if an Intel-GF or Intel-UMC tie-up could get through the regulation process.
