Globalfoundries wants to buy UMC for a plan called “Ultron Project” [RUMOR]

Globalfoundries would be considering acquiring its competitor UMC to establish a dominant presence in the segment of mature lithography processes in semiconductor manufacturing. The plan has not yet been officially disclosed, but it leaked until its name: “Ultron Project,” according to Tom’s Hardware.

While TSMC, Samsung Foundry and even Intel compete for the manufacture of the world’s most advanced chips, in processes approaching 2nm, Globalfoundries and UMC compete in older mature processes such as 28nm and even larger. These technologies are still widely used in automotive, industrial and legacy machinery segments.

Theoretically, a union between globalfoundries and aC would result in 28% control of the total yield of the semiconductor manufacturing industry. It would not yet be considerable competition for TSMC, which currently controls 44% of the market.

But it is not in the largest than the “Ultron Project” aims, according to the rumors. Globalfoundries would be more concerned about China’s emerging industry, with companies like SMIC that have no difficulty offering chips in mature processes, such as GF and UMC.

Only UMC has declared on the subject, saying that he is unaware of the project and currently does not negotiate a merger with another company.

Idea of ​​globalfoundries makes sense on paper, but faces challenges

Purchasing UMC instead of continuing competing with it would make sense for Globalfoundries. In addition to the greater presence on the market, UMC is based on Taiwan, while GF is in the US, which would give a wide geographical advantage to the company resulting from the union between the two.

The “scattered” presence helps reduce risks involving geopolitical friction and even environmental accidents, as well as reducing the dependence of each company with their current markets.

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However, there is difficulties to bring the “Ultron Project” ahead. For starters, Globalfoundries is valued at $ 20.41 billion, while UMC is worth $ 16.86. That is, there is no cash in cash for a company simply to buy the other overnight.

In addition, GF can still face obstacles from international regulatory agencies, especially from China. The country’s authorities should not be happy to see a giant competitor suddenly emerging in the segment where their semiconductor factories stand out.