According to reports, Taiwan's major chipmaker United Microelectronics and U.S.-based GlobalFoundries are exploring the possibility of a merger.
According to the report, a merged company would create a larger U.S. firm with a worldwide manufacturing presence across Asia, the United States, and Europe.
The announcement of a possible agreement arises as the US aims to bolster its semiconductor supply chain due to growing geopolitical strains in the Taiwan Strait and heightened rivalry from China in the established chip market.
The combined entity, as per the Nikkei report, would focus on research and development funding in the U.S. and might serve as a credible alternative to Taiwan Semiconductor Manufacturing Co, the top chip producer globally.
GlobalFoundries has a market value of $20.40 billion, while UMC is presently valued at $16.90 billion, based on information gathered by LSEG.
UMC's shares closed 0.2 percent higher at 44.65 Taiwanese dollars, while GlobalFoundries saw a slight increase following the Nikkei report.
UMC is dedicated to Specialty Technologies that cater to emerging growth markets, especially 5G, IoT, and Auto ICs. It excelled in numerous fields, including 80eHV TDDI and 40eHV/28eHV TDDI technology and shipments, while our niche market share keeps expanding, particularly in 12-inch production.
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Additionally, since IP has become an essential resource for modern SoCs, the company focused on delivering both fundamental and specialized IP that is optimized for cost and portability, developed internally and through third-party collaborations.