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GlobalFoundries to invest $ 1.4 billion to expand production amid chip shortages
GlobalFoundries is investing $ 1.4 billion this year to ramp up production at three plants in the U.S., Singapore and Germany as global semiconductor shortages drive demand. The company, which is a division of the Saudi state fund Mubadala, may also postpone its initial public offering (IPO) to the end of 2021 — previously the IPO was planned in late 2022 or early 2023.
GlobalFoundries predicts 9-10% revenue growth this year, up from $ 5.7 billion last year. As a reminder, manufacturers are now facing a global shortage of chips, which leads to delays in the production of a wide variety of devices, including cars.
“A number of technologies, which would normally take 10 years, were deployed in one year in 2021 due to the COVID-19 situation,” GlobalFoundries CEO Thomas Caulfield told Reuters. Before the pandemic, the growth of the semiconductor industry was projected to be 5% over the next 5 years, and today these figures are twice as high.
GlobalFoundries said that $ 1.4 billion, which will be evenly invested in expanding production at its factories in Dresden (Germany), Malta (New York State) and Singapore, will significantly expand production in 2022 at rates ranging from 12 nm to 90 nm. Roughly a third of the investment will come from customers looking to reserve capacity for the next few years. GlobalFoundries expects its production to grow 13% this year and 20% in 2022.
If demand continues to grow, GlobalFoundries could build a new plant near its Malta, New York facility — last year the company entered into an option agreement to purchase about 27 hectares of land. But the decision and the speed of implementation of the project will largely depend on the funding by the US Congress of a package of measures to stimulate the production of chips in the United States, known as the «Chips Act», approved last year.