Strategy Behind Intel’s Potential Global

As managing partner at Lynx Equity Strategies in New York, Jahanara Nissar draws on executive experience with Alliance Bernstein in delivering analytically informed financial services. Regularly quoted in publications such as Bloomberg and the Economic Times, Jahanara Nissar gave her opinion to StreetInsider regarding Intel’s potential acquisition of Global Foundries, Inc. in July 2021.

Intel is seeking to reestablish its dominance in the competitive microprocessor chip production arena. In March 2021, CEO Pat Gelsinger announced that the company would funnel $20 billion into a pair of Arizona chip foundries developed from the ground up as the Intel Foundry Services (IFS) division. It is forecasted that this division will enable Intel to produce CPUs in-house with ARM cores.

Intel’s semiconductor strategy with IFS focuses on creating the higher-speed processors required in leading-edge laptops, desktops, and servers. At the heart of this is a next-generation Extreme Ultraviolet fabrication process already in use by Taiwan Semiconductor Manufacturing Company. Acquiring Global Foundries would allow Intel to cover all bases and also compete in the nonhigh performance category, which is dominated by Chinese companies.

Ms. Nissar noted that such an acquisition, valued at approximately $30 billion, would positively impact, as it would be a necessary component of Intel’s competing effectively in all areas of the foundry business.