Intel Is Buying A Chip Manufacturing Company For $30 Billion

Intel can’t beat AMD’s silicon so it seems that have to buy off the competition. Intel is known for manufacturing its own chips and silicon to maintain full control over the product. AMD, on the other hand, uses fabs like GlobalFoundries and other manufacturers to provide the chips and silicon for their products. This is exactly where Intel is looking to take a big bite out of the competition. Recent reports claim that Intel may be looking to strike a deal with GlobalFoundries that could cost them over $30 billion.

Intel, however, has declined to comment on whether these dealings are taking place or not. Rumor has it that GlobalFoundries outright denied their offer and even denied reporters when they tried to inquire about if something was actually happening or not. According to an Intel spokesperson, “We will decline to comment on rumor and speculation”.

Other rumors say that Intel isn’t talking with GlobalFoundries directly but is actually talking to the investment firm that owns GlobalFoundries instead. Buying off AMD’s silicon makers won’t help with Intel CPU’s performance numbers but it will make it hard for AMD to meet demand and supply. Intel also wants to outsource most of its silicon production now. The new CEO Pat Gelsinger is set on changing the company’s policy of trying to do everything by itself.

The company is actually struggling because AMD has undercut its products by a good margin. Offering cheaper CPUs with better performance. The latest Ryzen 5000 series was just another nail in the coffin for Intel. Being at the top of the market for so long actually hurt Intel in a way they didn’t expect it. They stopped innovating and AMD caught up with them. Intel is making investments to save itself. Even agreeing to produce chips for other companies as well.

They have also invested $20 billion in new facilities in Arizona but it will take a few years for them to be built and production to start. Getting GlobalFoundries could actually be a gamechanger for Intel as it is the 4th best fab in the world right now. They alone account for 7 percent of all foundry business by revenue. By the way, TSMC and Samsung combined account for an estimated 74 percent of foundry business by revenue.

In my opinion, Intel would also be better off investing in R&D as well because Ryzen is killing it right now.

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