According to a report in The Wall Street Journal citing sources, "It isn't guaranteed one (the deal) will come together, and GlobalFoundries could proceed with a planned initial public offering".
Both GlobalFoundries and Intel (which have a market value of nearly $225 billion) have denied any suck talks.
"We will decline to comment on rumour and speculation," an Intel spokesperson told The Verge.
GlobalFoundries is owned by US-based Mubadala Investment Co, an investment arm of the Abu Dhabi government.
Intel in March announced to invest $20 billion for two new manufacturing facilities in the US, along with plans to to outsource more of its chip production to third-party foundries.
New Intel CEO Pat Gelsinger also unveiled a new branch of the company called Intel Foundry Services, to become a major provider of foundry capacity in the US and Europe to serve customers globally.
The two new fabs (or factories) will be built in Arizona, located at the company's Ocotillo campus. These fabs will support the increasing requirements of Intel's current products and customers, as well as provide committed capacity for foundry customers.
The Intel CEO expects Intel's engagement with third-party foundries to grow and to include manufacturing for a range of modular tiles on advanced process technologies, including products at the core of Intel's computing offerings for both client and data centre segments beginning in 2023.