GlobalFoundries puts rivals on notice, tips 20-nm process
9/1/2010 9:25 PM EDT
Fighting on two fronts
In simple terms, GlobalFoundries is fighting on two fronts. It is devising silicon-on-insulator (SOI) processes for AMD, which competes with mighty Intel Corp. On the other front, GlobalFoundries is developing foundry-generic bulk processes to compete against TSMC, UMC, SMIC and others.
Last year, TSMC remained the world's largest foundry, followed in order by UMC, Chartered, SMIC and GlobalFoundries, according to IC Insights Inc. In 2009, GlobalFoundries had sales of $1.065 billion, while Chartered had sales $1.540 billion, according to the firm.
In 2010, most experts expect GlobalFoundries to leapfrog SMIC and UMC in sales to become the world's second largest foundry, behind TSMC. SMIC and UMC are quickly falling behind the leaders in technology.
Both SMIC and UMC are now becoming the "fast followers" in the foundry business. But over time, SMIC and UMC may end up becoming takeover targets, according to observers.
Another leading-edge vendor, IBM Corp., may divest its semiconductor and foundry operations in the distant future, some have speculated. Some believe GlobalFoundries will likely buy IBM's chip unit.
In the long run, the leading-edge foundry market could have three strong competitors: TSMC, GlobalFoundries and South Korea's Samsung Electronics Co. Ltd. GlobalFoundries poses a threat to TSMC in the leading-edge foundry market and deep-pocketed Samsung is pouring millions of dollars into its foundry business.
The dynamics between GlobalFoundries and Samsung are worth watching. IBM, GlobalFoundries, Renesas, Samsung, ST, Toshiba and others are part of IBM's technology alliance.
One day, a rift could emerge between GlobalFoundries and Samsung. "On one hand, we compete with" Samsung, Grose said. "On the other hand, we cooperate with them."
In any case, there is a capital spending race between GlobalFoundries, TSMC and Samsung. TSMC has raised its capital spending to $5.9 billion in 2010.
GlobalFoundries is holding to its previous plan to spend $2.6-to-$2.8 billion in 2010, according to Grose.