GlobalFoundries to boost production in Malta after year of record sales

A production area is shown at GlobalFoundries' Fab8 computer chip factory in Malta.

A production area is shown at GlobalFoundries' Fab8 computer chip factory in Malta.

MALTA — GlobalFoundries made record sales volume of its computer chips in 2020 and expects to exceed that in 2021.

The rising demand — which the company said predates the COVID pandemic but was accelerated by it — will require hundreds of millions of dollars’ worth of upgrades to its Malta factory this year.

Company spokeswoman Laurie Kelly said Friday that total investment will reach $1.4 billion, spread about equally among its production facilities in the United States, Germany and Singapore.

GlobalFoundries CEO Tom Caulfield said last year that the Fab8 facility in Malta would be first in line for upgrades among the U.S. facilities because it has the most available space. 

The vacant space in the existing buildings would have to be filled before the company would exercise the options it has secured to buy land and build another foundry plant in the Luther Forest area.

Expansion would happen to some degree, Caulfield said then, the only question was when.

Kelly said demand soared in the second half of 2020, prompting greater need for installation of new tools and production equipment — $1.4 billion worth.

“That is our planned investment for this year for the expansion and growth of our business,” she said.

GlobalFoundries’ U.S. operations are in Malta, where about 3,000 employees work; Burlington, Vermont, with about 2,200 employees; and East Fishkill, where about 1,300 company personnel work.

The East Fishkill plant is a former IBM property that GlobalFoundries acquired and then sold to ON semiconductor. The ownership transition is expected to be complete in 2023.

Kelly explained that demand for computer chips has been steadily increasing for years, as more products and processes are computerized and existing computers are upgraded. The rollout of 5G cellular service is a good example.

“Think about everything you do,” Kelly said: computer chips are everywhere.

Then, in 2020, powerful late-model computer equipment moved from the background to the center of everyday life, as so many people switched business, educational and social interactions to virtual online settings amid the pandemic.

As this was happening, shortages in medical supplies illustrated the risks of having too much critical equipment manufactured overseas.

GlobalFoundries is one of five chip major foundry operators, Kelly said, and the only one with factory operations in the United States.

“The U.S. government has recognized the strategic value of semiconductors, and not just semiconductors but the manufacture of semiconductors,” she said.

A plan for billions of dollars worth of federal subsidies for expansion of the U.S. computer chip manufacturing has gained bipartisan support but the final form isn’t decided. Kelly said GlobalFoundries expects some benefit from the measure but doesn’t know the details yet.

Caulfield said last year the grants are a necessary counter to the subsidies provided to GlobalFoundries’ overseas competitors by their governments, and would allow for greater expansion in Malta.

The $1.4 billion in 2021 investments is not dependent on any federal subsidy, Kelly added.

She said the Malta facility has fared well in the COVID era. She and other non-production employees have been working remotely, but production workers have been on-site the whole time. They’re swaddled in personal protective equipment even in the best of times, due to the need to keep the facility and its products clean.

“As an essential manufacturer, we’ve been running this facility in Malta 24-7,” Kelly said. “We’ve been able to keep our employees very safe and that’s been a top priority for us.”

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