GlobalFoundries Expansion: Game Changer for Intel, TSMC & Semiconductor Industry?
11/28/2012 by: Theo Valich
Over the course of 2012, there were quite a lot of sources from other companies that were contacting us to tell us that GlobalFoundries, AMD's manufacturing spin-off is doomed, that Mubadala Abu Dhabi, one of largest if not the largest investment group in the world is not happy with the returns etc. All in all, we never ran the stories since our sources from the investment community were typically right on the money in the past.
The reason why those rumors were being spread were based on the fact that if enough Fear, Uncertainty, Doubt (FUD) strategy in order to shake-up the customers, rather than what was going on in Mubadala and its technology investment arm, ATIC (Advanced Technology Investment Company). At the high-level meeting which took place couple of weeks ago, BoD members expressed exactly opposite feelings: while it is true that GlobalFoundries marked 1.9 billion dollar loss in first year of operations, followed by approximately $1.1 billion and is on track to lose less than $1 billion this year, the vision is to become profitable. While 3-5 billion dollar in losses sound quite troublesome, GlobalFoundries investment is approaching 10 billion dollars, and according to sources in the know, the investor is willing to go up to 20 billion dollars, but the business has to become profitable by 2015.
As such, the most optimistic vision of the future, dubbed Vision 2015 came into action. There's also a long term "Vision 2020", which was brought forward when the company was founded. Vision 2015 calls for becoming a technology leader in number of customers, process nodes - taking the challenge to Intel from 2014 onwards - with its 14XM mixed-node (14nm with some 20nm elements), to 10nm and sub-10nm nodes.
Vision 2015 will insist on strengthening the manufacturing facilities, and there should be no surprise that the company is now building an investment package where fabless companies would buy complete nodes located in clean rooms in New York, Dresden and Singapore. We know of such deals from the companies that were too slow to get on the bandwagon and were too reliant on single foundry from the Far East.
GlobalFoundries 200mm and 300mm manufacturing complex in Singapore. 300mm Fab 7 is on the right (white roof)
The first public touch of the Vision 2015 is the announcement of further investments in Singapore. You might not be aware, but the Singaporean government was very displeased with the conversations it held with GlobalFoundries / ATIC management in the past, where Singapore was effectively shafted in terms of new process nodes.
Earlier today, GlobalFoundries announced that the company will almost double the 300mm capacity in Fab 7 in Singapore, the most advanced semiconductor manufacturing facility in Singapore. Currently, the Fab 7 manufactures up to 50,000 wspm (wafer starts per month) using several process nodes (from 130nm to 40nm). Expansion will go beyond the capacity offered by the Fab 1 in Dresden or New York's Fab 8. According to the press release, the target is set at a bit more than 80,000 wafer starts per month (approximately 83,000 wspm). Once this extension is complete, GlobalFoundries will have 300mm capacity of no less than 220,000 wspm (2.67 million/annum) 300mm wafers and 183,000 200mm wafers (2.19 million/annum). Expansion is scheduled for completion by mid-2014.
This capacity should cement the company in the third place on a worldwide scale, behind TSMC and Intel. In terms of semiconductor foundries, this capacity should suffice for #2 spot, again behind TSMC. Given the level of TSMC's and Intel's investments in the fab space, GlobalFoundries will have to expand New York facility to the full capacity (240,000 wspm, 2.88M 300mm wafers/year), and maybe even further expand Dresden and Singapore.
However, further capacity expansion might yield with less employees for the company, as the news of capacity expansion drowned the announcement that the company will lay off 300 people in Singapore, citing the corporate standard statement: "due to the softening of the current macro-economic environment".
Machines will be happy, workers less so.
GlobalFoundries, GF, ATIC, Advanced Technology Investment Corporation, Mubadala, Mubadala Abu Dhabi, Vision 2015, Strategy, Foundry, Foundry Strategy, TSMC, INTC, Intel, Chartered, Singapore, New York, Dresden, Germany, Ajit Manocha
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