SANTA CLARA, Calif.óDespite a sudden and disturbing lull in the IC market, GlobalFoundries Inc. is moving full speed ahead with its aggressive silicon foundry strategy.
At its inaugural technology event here, GlobalFoundries also fired a warning shot and put its competitors on notice, namely TSMC, UMC and others. Upstart GlobalFoundries is seeking to move up the foundry ranks sooner than later, by planning to double its 300-mm capacity over the next two years, entering new markets like MEMS and analog, and accelerating its leading-edge process development efforts.
As part of those efforts, the company disclosed plans to devise a 20-nm process and rolled out a new, high-end 28-nm offering. It also announced an intellectual property (IP) deal with ARM Holdings plc and said it is developing technology to enable 3-D chips based on through-silicon-vias (TSVs).
Like its rivals, GlobalFoundries' capacity is tightóand business remains strongódespite a sudden slowdown in select chip markets. The PC market is seeing a slowdown, impacting many foundry customers like AMD, Nvidia, among others. Intel, Micron and others are impacted as well.
However, business is still "very strong," said Doug Grose, chief executive of privately-held GlobalFoundries, in a brief interview with EE Times, at the company's technology here. "I think it will be strong in 2011."
GlobalFoundries appears to be moving in the right direction. Jim Feldhan, president of Semico Research Corp., said he is impressed with GlobalFoundries' early efforts since its inception last year. "They have a very aggressive roadmap," he said, "but now have to execute" to overtake some of the competition.
Execution is a key for GlobalFoundries. While the company has the pieces in place to become a contender, it must make good on its ambitious promises, integrate a recent and huge acquisition, and remain nimble in the competitive foundry front.
In 2009, the chip-manufacturing arm from Advanced Micro Devices Inc. (AMD) was spun off into a new foundry company. The foundry spinoff, GlobalFoundries, is a joint venture between AMD and Abu Dhabi's Advanced Technology Investment Co. (ATIC).
ATIC plans to boost its stake in GlobalFoundries from about 68 percent to 70 percent. Over time, ATIC will take the entire stake in GlobalFoundries from AMD.
In September, ATIC agreed to acquire Singapore-based Chartered Semiconductor Manufacturing Co. Ltd. for a total of $3.9 billion. Chartered is being folded into GlobalFoundries.
HSBC says GlobalFoundries (GF) won't be a real factor in the foundry market until 2011. I agree. I am still not convinced about them. Sometimes, I think they are really lost. I am not sure they have made the transition as an IDM under AMD to the pure-play foundry business. They got deep pockets, but they don't have a clue right now. They may figure it -- perhaps sooner than later. But for now, I see red ink and slower-than-expected sales for the foreseeable future.
@resistion: I am not sure I agree that GF using outside mask suppliers is a handicap. It is in my opinion providing a key differentiation in the sense that they can offer competitive rates from various mask suppliers and they do not even need to invest in the internal development of mask making and they can use the capital to work on the process R&D. In addition to this customers may feel that they are overpaying in terms of masks if they have no alternative options but going through the foundry's captive mask shops.
Quite interesting to read you all guys,
one really learns about the IC industry just by glancing over your comments.
So I see that Samsung is strong in chip manufacturing and there are many non-foundry vendors who depend on the makers.
And there are different techs like 40nm, till 20nm.
I would like to know what is the ROI of the semiconductor business is this what we might call hi value added? Perhaps so since at the end the makers are selling little pieces of sillicon but with a high agregated value right? If we think of it... is like making stones speak, calculate and the sort...
Like UMC, GF has a handicap in that it must rely on outside mask suppliers. I don't think they can advance easily to subsequent nodes as smoothly as TSMC, Samsung, Intel. In fact, it may make sense for them to consider maskless or even direct write instead of something mask-intensive like EUV.
Dear Goafit ... "I think they will fail because building factories is not a good model. This is capital intensive with minimal returns. I see no good value in this strategy" ... an interesting philosophy. So just who exactly is supposed to build factories and make the chips ??? Are you suggesting the world defaults to no foundries, no IDMs ... no wafer factories ??? Bottom line is when there's no competition left, wafer prices will skyrocket making them great on returns and good value to have.
Dear Noe 1 ... "Samsung will not be holding on to their fabs for too long either" ... in your dreams. My guess is Samsung is the only chip competitor that really keeps TSMC awake at night.
As for ATIC ... fine words and nice fanfare but words and fanfare's are the easy part; the proof of the pudding's will be in the eating. What ATIC really needs is TSMC's prowess, Samsung's ruthlessness and Intel's execution; everything else is an expected and necessary given.
I believe GF will ultimately lead the way in the foundry business. Their owners (ATIC) have deep pockets and have no shareholders to worry about :-) They can take the short term losses for the sake of long term dominance.
The technical side, as proposed, seems to be nearly impossible to even visualize. Focus is not the strong point of this company, it also suggests management believes there is an endless supply of sacrificial capital. Perhaps the UAE investors are willing to spend unlimited amount of resources?
The financial aspect, based in losing money in every single product Globalfoundries ship, with losses exceeding 75% of its revenue, and a lousy balance sheet; is a complete delusion unless they can sell ATIC on funding them to the end of the times. Have they already done so?
What will TSMC do?
It does not look good for Globalfoundries. They seem to be imploding; or just a quarter away from it.
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