Taiwanese semiconductor manufacturer United Microelectronics Corporation (UMC) has denied rumors of merger discussions with GlobalFoundries, which is a U.S.-based contract chipmaker.
This report puts on pause to ongoing buzz in the market about a potential deal between two companies amid ongoing geopolitical turbulence in the semiconductor industry.
According to the report by Nikkei Asia on Monday, two companies had explored a merger as part of U.S. plans to strengthen its semiconductor supply chain. However, UMC refuted these claims the next day, stating via United Daily News that it would not comment on market rumors, saying, “there is no merger going on at present.”
The merger would have led to the formation of a larger, U.S.-based entity with manufacturing operations across Asia, the US, and Europe.
Taiwan Holds Significant Market Share of Semiconductor
The move was seen as an attempt to boost America’s access to mature-node chips, which constitute over 70% of global semiconductor demand. Currently, Taiwan dominates this sector with a 44% market share. On the other hand, China and the U.S. control 31% and 5% market share, respectively.
This is not the first time such a deal has been floated. A few years ago, the same kind of reports came to the surface but ultimately did not lead to an agreement. Analysts suggest that regulatory challenges would pose a huge challenge in a cross-border semiconductor merger, particularly from Taiwanese and Chinese authorities.
For example, the Chinese government previously intervened to block Intel’s acquisition of Israel’s Tower Semiconductor. Amid the boom in AI technology, superpowers like the U.S. and China are trying to gain dominance in the semiconductor market.
Source:https://asia.nikkei.com/Business/Tech/Semiconductors/GlobalFoundries-weighs-merger-with-No.-2-Taiwan-chipmaker-UMC-sources
Latest Stories:
