What $11.8 billion chip business merger means for GlobalFoundries

Chelsea DianaReporter- Albany Business ReviewEmail | Twitter

An industry analyst says business for GlobalFoundries should increase over the next few years thanks to a $11.8 billion merger between two other computer chip companies.

The New York Times reported yesterday that Dutch chipmaker NXP Semiconductorsis buying Freescale Semiconductor Ltd. of Austin, Texas for $11.8 billion.

Freescale Semiconductor makes microprocessors and microcontrollers for cars as well as industrial equipment. According to the Associated Press, NXP makes microchips for automobiles as well as those for near-field communication on smartphones, often used for mobile payments.

GlobalFoundries, the computer chip manufacturer with a foundry in Saratoga County, New York, works with both companies to produce the silicon computer chips. GlobalFoundries most recently partnered with NXP in February.

Thanks to these already cemented partnerships, industry analyst Roger Kay said the merger will bode very well for GlobalFoundries because they will only get an increase in business.

"If you look at the stock market reaction, everyone thinks [the merger] will be a powerhouse because they will have corner on the automotive business," Kay said. He added that they are also tapping into the Internet of Things industry, which is expected to grow in the next few years.

Chelsea covers technology and money