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What you need to know for 07/29/2017

GlobalFoundries outgrowing the field

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GlobalFoundries outgrowing the field

GlobalFoundries, which owns the Fab 8 computer chip plant in the Luther Forest Technology Campus, is

GlobalFoundries, which owns the Fab 8 computer chip plant in the Luther Forest Technology Campus, is expected to have the fastest sales growth of any semiconductor manufacturer in the world this year.

IC Insights, an industry analyst, projects that GlobalFoundries will experience 31 percent sales growth from 2011 to 2012, as the company has developed new customers and geared up the Malta plant.

If the prediction is accurate, GlobalFoundries would also become the No. 2 foundry company in the world, by revenue — and rise from 21st to 15th largest among all chipmakers.

“Considering that AMD, the original parent and largest customer of GlobalFoundries, is forecast to show a steep, 17-percent sales decline this year, it is obvious that GlobalFoundries’ current spike in revenue is being driven mostly by its success in attracting new [integrated circuit] foundry customers,” IC Insights said in its report, citing contracts with STMicroelectronics, Freescale, and Qualcomm,

GlobalFoundries’ growth rate exceeds that of much larger rivals like Intel and Taiwan Semiconductor Manufacturing Company — but GlobalFoundries still has only a fraction of their sales, according to IC Insights. GlobalFoundries’ sales rose from $3.5 billion in 2011 to nearly $4.6 billion in 2012. Intel, by contrast, produces $49 billion worth of chips, but may actually see a small drop in production this year.

Among foundries — companies that own chip fabrication plants that make chips under contract for other technology companies — Taiwan-based TSMC is expected to see 17 percent growth, from $14.6 billion to $17 billion. If the revenue projections are accurate, GlobalFoundries will pass the revenue total of the current No. 2 foundry, United Microelectronics Corp. of Taiwan.

Foundries as an industrial category are expected to see 16-percent growth overall, in a year when worldwide chip production is expected to drop 1 or 2 percent, according to IC Insights.

“We could not be more pleased to see industry watchers recognizing the transformation that has taken place at GlobalFoundries,” said Mike Noonen, GlobalFoundries’ executive vice president for worldwide marketing and sales.

GlobalFoundries is headquartered in Silicon Valley, but is wholly owned by Advanced Technology Investment Co., an investment fund of the government of Abu Dhabi, which has been investing billions of dollars in manufacturing plants in Singapore, Dresden, Germany, and Malta. GlobalFoundries was formed in 2009 when ATIC bought controlling interest in AMD’s manufacturing facilities; it has since acquired full ownership.

With the growth, ATIC officials said they hope the investment fund can become profitable by 2015.

“Profit in the industry is driven by scale, and in the next two or three years, by 2015, we would make profits,” ATIC chief executive Ibrahim Ajami told the Reuters news agency late last month.

That, in turn, has raised questions about whether ATIC may start publicly trading shares on a stock exchange to raise additional capital, once it becomes profitable. Noonen said it is a possibility, but not before the company becomes profitable.

Fab 8, where construction started in 2009, is a $6.9 billion investment that is expected to go into full commercial production early next year. Nearly 1,800 people work there.

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