The new company would eventually invest in research and development in the U.S. and potentially become an alternative to Taiwan Semiconductor Manufacturing, the report said. Taiwan Semiconductor announced a $100 billion investment in the U.S. earlier this month to bolster chip manufacturing. The deal brought the company's total investment in the U.S. to $165 billion.
Taiwan has become a hub for global chip manufacturing, building chips for some of the largest companies such Nvidia and Apple. Taiwan Semiconductor is by far the leading worldwide supplier.
Both GlobalFoundries and United Microelectronics have reportedly discussed the merger and informed government officials from both countries. United Microelectronic had previously looked into buying or building production plants in the U.S. but ditched the possibility due to costs, Nikkei reported.