GlobalFoundries, Taiwan's UMC Rumored to Be Investigating a Merger to Build a US Chipmaker
Taiwan's second-largest semiconductor firm and the world's third-largest could do an end-run around tariffs with a potential merger.
The semiconductor industry could be set for a shake-up with the news that GlobalFoundries is looking to merge with United Microelectronics Corporation (UMC) — with a view to forming a US-based joint company that can weather the storm of tariffs and looming trade wars.
Nikkei Asia has reported on "an assessment plan," which would see GlobalFoundries and UMC join forces to produce "a bigger, US-based company" that would produce chips locally, across Asia, and in Europe. The hope: that the combined company would be looked upon favorably by the current administration and swerve growing tariffs as the nation appears to gear up for a potential trade war.
GlobalFoundries, registered in the Cayman Islands but headquartered in New York, was formed when AMD decided spin-out its manufacturing arm in 2009 — becoming a fabless semiconductor company in the process. Funded by the United Arab Emirate's sovereign wealth fund, which remains the company's overwhelming majority shareholder despite a flotation on the NASDAQ exchange in 2021, GlobalFoundries has grown to become the third-largest semiconductor company by revenue and has fabs in Singapore, Europe, and the US — the latter of which has led to it being listed as a "trusted foundry" by the US government.
UMC, meanwhile, was founded in 1980 as a spin-off from Taiwan's Industrial Technology Research Institute (ITRI), becoming the country's first semiconductor company — though it currently sits in second place for size, behind the better-known Taiwan Semiconductor (TSMC). UMC has no fabs in the US, but does have facilities in Singapore, Taiwan, China, and Japan — and in 2020 reached an agreement with the US Department of Justice over claims that it had conspired with a Chinese company to steal trade secrets from US chipmaker Micron, an accusation over which the Chinese company was found not guilty in 2024.
The rumored merger comes on the back of not only the potential for a major trade war but a growing independent semiconductor industry in China, which — in-keeping with a number of nations — has been investing in building up its semiconductor design and fabrication capabilities as part of a push to reduce reliance on foreign companies.
GlobalFoundries and UMC were approached for comment, but neither had responded by the time of publication.
