By Peter Clarke
What’s at stake: GlobalFoundries has elevated its status as a major foundry by agreeing to acquire MIPS, buying out its investors. However, the move also complicates the foundry’s business model at a time when RISC-V licensing is struggling in an Arm- and AI-dominated market.
GlobalFoundries Inc. has agreed to buy San Jose, Calif.-based semiconductor IP vendor MIPS Tech LLC and a first reaction might be: “Why?”
The reasoning behind the deal does not seem straightforward and it is hard to assess without knowing the agreed price. But it does signify that with a semiconductor industry driven to an inflection point by AI, there is scope to re-evaluate business models, values, and opportunities.
That said, the deal has not come completely out of left field. MIPS has been aligned with GlobalFoundries for some time. GlobalFoundries has adopted and used MIPS’ processor cores’ manufacturing processes in its business, including in the industrial and automotive markets.
But is the agreed acquisition, which is due to close in the current half of the year, subject to customary cond[itions, a sign of broken business models or distress at one or both parties?