GlobalFoundries Inc. (NASDAQ:GFS) is considering a potential merger with Taiwanese chipmaker United Microelectronics Corp. (NYSE:UMC).

GlobalFoundries’ incoming CEO Tim Breen has been open to considering deal options, including a possible tie-up with UMC, Bloomberg reported, citing unnamed sources familiar with the matter.

The U.S. chipmaker has a market value of ~$20 billion, while the Taiwanese firm is worth ~$17 billion.

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The merged company would prioritize research and development investments in the U.S. and could emerge as a viable alternative to Taiwan Semiconductor Manufacturing Co (NYSE:TSM), Reuters reports. The potential deal coincided with the U.S.’ efforts to boost its semiconductor supply chain amid rising geopolitical tensions.

A transaction of this nature would presumably require the approval of Chinese regulators, implying a significant hurdle, Bloomberg analysts Charles Shum and Steven Tseng stated on Monday.

GlobalFoundries reported a fiscal fourth-quarter 2024 revenue decline of 1% to $1.830 billion, beating the analyst consensus estimate of $1.829 billion. The contract chipmaker’s adjusted EPS of 46 cents beat the analyst consensus estimate of 44 cents. 

GlobalFoundries expects first-quarter revenue of $1.55 billion-$1.60 billion versus the $1.66 billion estimate. The company expects adjusted EPS of $0.24-$0.34 versus the $0.32 estimate.

As of December 31, 2024, GlobalFoundries held $4.2 billion in cash and equivalents.

UMC reported a fourth-quarter revenue growth of 9.9% to $1.84 billion (NT$60.39 billion). Earnings per ADS of 10 cents missed the analyst consensus estimate of 15 cents. The company missed the analyst consensus estimate of $1.87 billion. 

Price Actions: UMC stock is down 2.17% to $6.99 at the last check on Tuesday.

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