Intel in talks to buy GlobalFoundries for around $ 30 billion

No discussion appears to include GlobalFoundries itself, as a spokesperson for the company said she is not in discussions with Intel.

Intel’s new chief executive, Pat Gelsinger, said in March that the company will launch a major effort to become a chipmaker for others, a market dominated by Taiwan Semiconductor Manufacturing. Co.

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Intel, with a market value of around $ 225 billion, this year pledged more than $ 20 billion in investment to expand chip manufacturing facilities in the United States and Mr. Gelsinger said more commitments at the national and international levels are underway.

GlobalFoundries is one of the largest companies specializing in the production of chips. It was created when rival Intel Advanced Micro Devices Inc. decided in 2008 to part ways with its chip production operations. AMD remains a big customer for GlobalFoundries, which reached a multi-year chip component supply agreement of around $ 1.6 billion this year, and that could complicate an Intel takeover. GlobalFoundries moves its headquarters to Malta, NY from Santa Clara, California.

GlobalFoundries has around 7% of the foundry’s market share in terms of revenue, according to Taiwanese research firm TrendForce. Some of the biggest chip companies, including Qualcomm Inc.

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and Nvidia Corp.

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, rely on third-party producers to manufacture their products, preferring to focus on design and without having to manage their own factories. Last year, Nvidia overtook Intel as America’s largest semiconductor company by value.

Like Intel and TSMC, GlobalFoundries is expanding its manufacturing footprint amid a global semiconductor shortage. GlobalFoundries announced last month that it had opened a new chip production facility, called fab, in Singapore, investing more than $ 4 billion in the site.

The shortage has disrupted manufacturing in various sectors, leading to temporary shutdowns of auto factories and a reduction in the supply of items such as computers and some household appliances. Auto manufacturers have been hit particularly hard, unable to get enough chips for all of their vehicles. Shortages are also starting to drive up the costs of some electronic devices.

President Biden has vowed to take action to help alleviate the chip shortage, pledging to spend billions of dollars to increase capacity. Governments overseas have reported similar commitments.

TSMC, the world’s largest contract chip maker, said this week that it expects chip supply issues hampering automakers to start easing in the coming months after increasing its production of automotive chips. Automakers have indicated that they expect the shortages to persist next year.

Mr. Gelsinger, who was Intel’s chief technology officer before leaving to lead VMware Inc.,

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returned to the chip giant to be its chief executive in February, following significant delays in chip manufacturing progress under its predecessor, Bob Swan. Mr. Gelsinger is committed to making Intel more reliable in the production of new chips.

Intel, a serial contract maker, agreed in October to sell its flash memory manufacturing business to South Korean SK Hynix Inc.

for about $ 9 billion.

Its biggest deal to date is its $ 15.4 billion purchase of Altera Corp. in 2015. He agreed to buy Israeli company Mobileye, a manufacturer of driver assistance systems, for around $ 14 billion in 2017.

Consolidation has swept through the semiconductor industry as industry players seek to grow and expand their product portfolios to support the growing number of everyday items connected to the internet.

Last year, Analog Devices Inc.

agreed to pay over $ 20 billion for Maxim Integrated Products Inc.,

and Nvidia agreed to pay $ 40 billion for Arm Holdings, the UK chip designer backed by SoftBank Group Corp.

AMD then agreed to buy Xilinx Inc.

in a deal of roughly $ 35 billion.

—Robert Wall contributed to this article.

Write to Cara Lombardo at [email protected] and Dana Cimluca at [email protected]