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GlobalFoundries and UMC Mull Potential Merger
Nikkei Asia has reported that U.S.-based chipmaker GlobalFoundries and Taiwan's UMC are weighing the possibility of a merger. UMC's American Depositary Receipts (ADR) subsequently surged 12% in early trading in New York. What would this potential merger mean for U.S. efforts to secure a domestic chip supply chain, and how might this impact Taiwan's semiconductor dominance?
english.cw.com.tw, Apr. 01, 2025 –
Nikkei Asia reported that GlobalFoundries (GF) and United Microelectronics Corp (UMC), two major semiconductor foundries focusing on mature-node processes, are considering a merger.
Following the report, UMC’s American Depositary Receipts (ADR) surged 12% in early trading in New York, although a UMC company spokesman stated that there is currently no ongoing merger.
According to Nikkei Asia’s sources, the merger would create a U.S.-based conglomerate aimed at ensuring the U.S. has access to mature chips in the event of a crisis in the Taiwan Strait. The move underscores the U.S.'s efforts to reduce its dependence on Taiwan and secure a more stable supply of mature chips.
UMC is the world’s fourth-largest chip foundry by sales, following TSMC, Samsung, and China’s Semiconductor Manufacturing International Corp (SMIC), while GlobalFoundries ranks fifth. Based on Q4 2024 sales figures, a merger between UMC and GF would make them the second-largest foundry globally, with a combined total revenue of $3.7 billion, surpassing Samsung's $3.26 billion.
UMC, headquartered in Taiwan, operates fabs in China, Japan, and Singapore. Before SMIC's rapid expansion in recent years, UMC was the largest producer of mature-node chips worldwide. From Q2 2024 to Q1 2025, UMC produced an equivalent of 5.1 million 12-inch wafer units, with chips in the 22/28-40nm range accounting for about half of its sales.
As of 2023, Taiwan controlled around 44% of the global mature-chip market, China held 31%, and the U.S. accounted for approximately 5%, according to industry association SEMI.
With around 65% of UMC’s customers based in Asia, a merger with GF, whose customers are primarily in North America and Europe, would make strategic sense.
Two years ago, the companies held similar discussions, but they did not result in any agreement. UMC is also co-developing 12nm process technology with Intel, though volume production is not expected to begin until 2027.
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