GlobalFoundries Reportedly Explores Merger With UMC Amid Taiwan Tensions – Retail Opinion Divided

GlobalFoundries (GFS) shares fell as much as 1.5% in afternoon trading Monday, amid broader market weakness, following a report from Nikkei Asia that the company is exploring a merger with United Microelectronics Corp. (UMC), Taiwan’s second-largest contract chipmaker. 

At the same time, UMC shares surged over 9% on Monday following the report.

Markets commenced the week on a sluggish note ahead of President Donald Trump’s tariff announcement on Wednesday.

The potential deal between GlobalFoundries and UMC is reportedly aimed at mitigating geopolitical risks tied to Taiwan and countering increasing competition from China in the mature chip segment.

According to the report, a merger between GlobalFoundries and UMC would create a larger, U.S.-based semiconductor firm with manufacturing capabilities spanning the U.S., Europe, and Asia. 

Sources told the publication that the move is seen as an effort to ensure U.S. access to mature chips at a time when tensions between China and Taiwan are escalating and as China accelerates its chip production.

Nikkei Asia said the overarching plan includes the combined entity later investing in research and development in the U.S., positioning itself as a potential alternative to Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s dominant chipmaker. 

TSMC currently holds significant market share in both mature and advanced semiconductor technologies.

Founded in 1980, UMC was Taiwan’s first chipmaker, though it remains smaller than TSMC. 

Meanwhile, GlobalFoundries, headquartered in the U.S., is majority-owned by Abu Dhabi’s Mubadala Investment Co. 

A semiconductor executive cited by Nikkei Asia expressed doubt over whether the U.S. government would fully support a chipmaker with foreign ownership.

The report adds that the newly formed company would later invest in research and development in the U.S. and could eventually become an alternative to Taiwan Semiconductor Manufacturing Co., the world's top chipmaker, according to the assessment. 

TSMC holds significant shares in the markets for both mature and cutting-edge chips.

GlobalFoundries has not yet commented on the report.

Meanwhile, UMC Chief Financial Officer Chitung Liu told Nikkei Asia that the company is not currently engaged in any merger discussions and does not respond to market speculation.

GlobalFoundries retail sentiment and message volume on March 31 as of 1:35 p.m. ET | Source: Stocktwits

On Stocktwits, retail sentiment around GFS stock remained in ‘bearish’ territory amid tepid levels of chatter.

GlobalFoundries’ stock has declined 30% over the past 12 months and is down 15% in 2025.

UMC retail sentiment and message volume on March 31 as of 2:10 p.m. ET | Source: Stocktwits

Meanwhile, retail sentiment around UMC’s stock ticked lower to ‘bullish’ from ‘extremely bullish’ territory. 

UMC’s stock is down nearly 11% over the past 12 months, with gains of 8% in 2025.

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