Intel isn’t afraid to drop some serious cash in its pursuit to become a leading-edge foundry operator. And now, GlobalFoundries could be on the menu, according to a Wall Street Journal report.

Citing “people familiar with the matter,” the Wall Street Journal claims Intel could pay as much as $30 billion for rival foundry operator GlobalFoundries.

GlobalFoundries, which is owned by Mubadala Investment Co. and based in the U.S., has denied any such deal in multiple statements provided to the paper. The company did not respond to SDxCentral's request for comment.

“If Pat Gelsinger wants GlobalFoundries, he will get it,” said Glenn O’Donnell, VP and research director of infrastructure and operations at Forrester Research, in an email to SDxCentral. “As the leader brought back home to save Intel, he has license to make bold moves.”

The rumored acquisition comes at a time when Intel is scrambling to recover from significant manufacturing setbacks suffered under prior leadership.

Last summer, Intel announced its next-generation, 7-nanometer process had been delayed by about a year after it discovered a defect resulting in degraded yields. Shortly after the announcement, Intel parted ways with its lead engineer Venkata Renduchintala amid sweeping changes to its executive staff.

These challenges ultimately resulted in Intel’s board ousting former CEO Bob Swan and appointing 30-year Intel veteran and then VMware CEO Pat Gelsinger as the company's leader.

Less than two months after taking over as CEO, Gelsinger announced Intel would open its semiconductor fabs to contract manufacturing and compete head-to-head with the likes of Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung Electronics, the leaders in the space. To support this endeavor, the chipmaker laid down $20 billion to construct two chip fabs on its Ocotillo, Arizona campus, and a further $3.5 billion to modernize its Rio Rancho, New Mexico facility.

Gelsinger’s foundry ambitions don’t stop there. During a press conference in March, he said Intel would announce additional fabs in the U.S., Europe, and elsewhere within the year.

Intel is currently in talks with European leaders to expand its foundry operations in the region. In April, Intel’s newly appointed CEO Pat Gelsinger met with European Commissioner Thierry Breton to discuss financial support for a foundry in the region. A recent Financial Times report indicates those discussions are ongoing.

O’Donnell notes that while Intel has existing foundry capacity and is aggressively pursuing new fabs, that won’t happen overnight.

“A new fab takes at least two years to build.” he said. “Buying GlobalFoundries would give Intel the capacity it needs quickly. In that sense, it’s a good move. It’s hard to comprehend that it’s worth $30 bilion, but the more I think about it, the more I think it’s reasonable.”

Another challenge is GlobalFoundries hasn’t competed in leading-edge silicon since 2019, a fact that led AMD to shift production from the operator's 12-nanometer process — currently its most advanced — to TSMC’s 7-nanometer process in 2019.

However, GlobalFoundries’ acquisition by Intel could have implications for smaller semiconductor customers that rely on larger, more mature processes — 40 nanometers or larger, O’Donnell noted.

“The real battlefield for Intel is the advanced stuff: 7 nanometers and less. However, GlobalFoundries has a range of node capabilities that could over time drift more to the advanced business,” he said. “That could squeeze out the smaller customers, which would be devastating to the industry."

O’Donnell, however, doubts Gelsinger would sacrifice smaller customers like automakers, which have been the hardest hit by the global semiconductor shortage.

The rumored deal is just that: a rumor. And GlobalFoundries has been quite active in recent months announcing several billion dollars in new development and teasing a possible initial public offering (IPO).

Late last month, the company shared plans to build a 300mm wafer fab valued at $4 billion on its Singapore campus in collaboration with the Singapore Economic Development Board and other investors.

The new facility will produce 450,000 wafers a year when it comes online in 2023. Meanwhile, Bloomberg reports GlobalFoundries has retained Morgan Stanley to guide a $30 billion IPO.