On first glance, Intel (INTC) buying GlobalFoundries seems brilliant. Intel said it wanted to get in the business of making chips for other companies. First, Intel would leapfrog over Advanced Micro Devices (AMD) , which is a holding of our Action Alerts PLUS charitable trust, and have unlimited abilities to make any chips. Second, it could make it so it was not hostage to Global's competitor, Taiwan Semiconductor (TSM) . Third, it could box out any comer if it knew what was selling well and it could direct all its production to Intel if necessary.
But then on second glance, those reasons are precisely why this new antitrust department of President Biden will no doubt do anything to stop this deal. It is kind of the definition of antitrust because it would harm so many competitors to Intel and Intel just can't say, "Hey we created this, so pound sand."
Now, sure, if there were no antitrust this is a terrific deal. Intel has fallen behind in making chips because of designs and because of a shortage of foundries. So just go buy a foundry!
But I am sure if CEO Pat Gelsinger spoke to a competent antitrust lawyer -- as I have on many occasions now -- he or she would have said there is no way this Justice Department, this Federal Trade Commission, would ever let this happen, ever. So don't spin your wheels.
I like Gelsinger's style. He's getting his team pumped.
But in this move he has ignored the state of play, bringing me back to what I have said over and over again: THERE IS NO QUICK FIX FOR INTEL.