Intel stock was up almost 1% in Friday’s premarket trading on a report in The Wall Street Journal that the company is in talks to buy GlobalFoundries for about $30 billion.
GlobalFoundries is owned by Mubadala, an Abu Dhabi government investment arm. According to the report, the deal is not certain.
Intel’s interest is one of the most important strategic moves under Pat Gelsinger (who rejoined the company earlier in the year). This comes at what could turn out to be a peak of boom for chipmakers who have been overwhelmed with demand since the outbreak of the pandemic and have not been able to increase their supply quickly.
As more companies work remotely, the demand for digital devices, from laptops and printers to mobile phones, has increased. This has also led to a surge in demand for smart electric cars. All these machines have chips in them made by companies like Intel and Nvidia. These deals are attractive because of the slow supply.
In Intel’s case, it has also ceded ground to players like Nvidia and AMD in the last few years and is now trying to recover that.
Intel already plans to invest $20B in Arizona for two new manufacturing plants. According to the WSJ, GlobalFoundries also plans to open a new unit for Singapore.