The surge in semiconductor investment continues to accelerate, with New York-based GlobalFoundries breaking ground on a new $4bn Singapore facility that will produce chips for legacy nodes.
The company said it expects the facility to be fully operational by the end of 2023, and produce in the region of 450,000 300mm wafers annually. This would bring its total Singapore output to 1.5 million wafers a year.
The new foundry would include 23,000m2 of cleanroom space and new administrative offices, in the process creating 1,000 new jobs. GlobalFoundries chief Tom Caulfield said it would target “growth areas” including 5G and artificial intelligence, as well as other more conventional sectors, including the automotive space.
This hasn’t come as much of a surprise: In 2018, the New York semiconductor maker opted to cease development of its 7nm-process node, as it steered towards specialist processes intended for specific use-cases, such as RF chips, embedded memory, and low-power microcontrollers.
This decision sparked a bitter legal dispute with IBM, which had previously agreed to sell its chipmaking division to GlobalFoundries, in the belief that it would provide the processors that would ultimately go into its next generation of servers and supercomputers. A repeatedly delayed production roadmap, as well as GlobalFoundries’ withdrawal from the bleeding edge, forced Big Blue to turn to Samsung instead.
The second half of 2020 saw more cars sold than expected
The decision to target the transportation sector is likely a prudent one. As previously noted by The Reg, the automotive sector has suffered from a chronic shortage of crucial semiconductor components, which has stymied its recovery from the pandemic. In the period after the start of the pandemic, car manufacturers opted to cancel or defer their existing orders, in the mistaken belief that consumer confidence would take longer to recover than it actually did.
The re-opening of economies in the second half of 2020 saw a flood in new car purchases.
With most automotive manufacturers relying on just-in-time manufacturing processes, any inventory was quickly exhausted. Meanwhile, demand from the consumer and IT sector snapped up any remaining semiconductor capacity, and production facilities began facing issues of their own, from a freak fire at Japanese automotive chipmaker Renesas to a shutdown of NXP and Samsung facilities in Texas caused by a winter storm.
GlobalFoundries has also committed to expanding capacity at its foundries in upstate New York and Dresden, Germany. In March, the company said it would spend $1.4bn on existing facilities, with the aim to increase capacity by 13 per cent this year and 20 per cent by 2022. A significant chunk of this investment would come from customers, who reportedly committed to prepaying for future orders.
Although GlobalFoundries did not name any customers, one likely suspect is AMD, which agreed to minimum purchase quantities of semiconductors on trailing nodes, with the caveat that it would wiggle out of its exclusivity deal for chips produced on the 12nm and 14nm process nodes. AMD has agreed to buy at least $1.6bn worth of wafers.
GlobalFoundries is largely owned by Abu Dhabi investment firm Mubadala. The company is expected to IPO later this year, with a reported valuation of $20bn. ®