(Reuters) – Taiwan’s major chipmaker United Microelectronics and U.S.-based GlobalFoundries are exploring the possibility of a merger, the Nikkei reported on Monday, citing an assessment plan seen by the newspaper.
A combined entity would establish a larger U.S.-based firm with a global manufacturing footprint spanning Asia, the United States and Europe, according to the report.
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The news of a potential deal comes as the U.S. seeks to strengthen its semiconductor supply chain amid rising geopolitical tensions in the Taiwan Strait and increasing competition from China in the mature chip market.
The merged company, according to the Nikkei report, would prioritize research and development investments in the U.S. and could potentially emerge as a viable alternative to Taiwan Semiconductor Manufacturing Co, the world’s leading chipmaker.
GlobalFoundries and UMC did not immediately respond to Reuters’ requests for comment.
GlobalFoundries has a market capitalisation of $20.40 billion, while UMC is currently valued at $16.90 billion, according to data compiled by LSEG.
Shares of UMC ended 0.2% higher at 44.65 Taiwanese dollar on Monday, while GlobalFoundries was marginally up after the Nikkei report.
(Reporting by Rishav Chatterjee in Bengaluru; Editing by Shilpi Majumdar)
