GlobalFoundries campus in Malta, N.Y.
Mary Thompson | CNBC
GlobalFoundries, the third-largest foundry, is planning to speculate $1.four billion in its chip factories this yr, and can doubtless double that funding subsequent yr, CEO Tom Caulfield informed CNBC in an interview.
Caufield mentioned the corporate’s manufacturing capability is totally booked and that industrywide semiconductor provide could lag behind demand till 2022 or later.
“Right now all our fabs usually are not solely greater than 100% utilized, we’re including capability as quick as we are able to,” Caulfield mentioned.
A shortage of semiconductor microchips is inflicting havoc all over the world, delaying car production and affecting the operations of some of the largest shopper electronics producers.
The shortage has highlighted the function of a handful of foundries, that are the factories contracted by semiconductor corporations to construct chips. Many, like GlobalFoundries, are investing billions in new manufacturing strains and upgraded tools to maintain up with the surge in demand and shortfalls in provide.
GlobalFoundries is the largest U.S.-headquartered “pure” foundry, with factories within the U.S., Germany and Singapore. It manufactures semiconductors designed by corporations like AMD, Qualcomm and Broadcom. It’s at the moment a personal firm owned by the federal government of Abu Dhabi. The firm is contemplating an IPO within the first half of 2022 or sooner, Caulfield mentioned.
Major investments and rising demand
GlobalFoundries remains to be a comparatively small participant, with solely a 7% share of the foundry market according to Trendforce. Other foundries are investing large {dollars} too.
Taiwan-based TSMC, the largest firm within the area with a 54% market share, said on Thursday it plans to speculate $100 billion over the following three years to extend its capability to satisfy demand.
Intel, which designs and manufactures its chips, announced on March 23 it plans to turn out to be a foundry and manufacture chips for different corporations. It’s investing $20 billion U.S. chipmaking crops.
Caulfield mentioned he welcomes Intel’s shift and would not see the corporate as a brand new competitor. One key distinction is Intel is expert at “bleeding edge” manufacturing or making chips with the smallest and most dense transistors, that are required for highly effective CPU chips on the coronary heart of a pc or smartphone.
But Caulfield says the business shortages, particularly for the automotive world, aren’t as a result of of demand for main node chips. The shortages are for different elements vehicles want, like radar chips, which do not essentially require essentially the most superior manufacturing accessible on the time.
“The auto business isn’t having a chip shortage as a result of it would not have CPUs. No one’s saying I can not construct sufficient computer systems, it is all the opposite chips,” Caulfield mentioned.
Chips which can be designed to allow particular options are what GlobalFoundries focuses on.
GlobalFoundries manufactures safe chips for contactless funds, battery energy administration and contact show drivers. These chips first have been utilized in giant portions for smartphones, however at the moment are included in a variety of merchandise from vehicles to home equipment, which has created a surge in demand.
However, most of the investments within the foundry world have been for constructing bleeding-edge, high-speed chips. That all changed last year when the pandemic hit, and gross sales of electronics together with laptops, displays, and recreation consoles rose when individuals purchased tools to work or go to high school from house.
Those merchandise require lots of further chips past the CPU, seeding the beginning of the chip shortage and highlighting the necessity for extra capability to construct what Caulfield calls “feature-rich” chips. Smartphones and computer systems additionally more and more want non-leading node chips to connect with 5G networks or add further cameras.
GlobalFoundries warned it’s going to take months earlier than it might probably enhance the quantity of chips in the marketplace, however that the capability enhance is smart for long-term investments. “The minute you say, I wish to make extra capability, it is a 12-month cycle,” Caulfield mentioned.
“The semi business going into Covid was projecting a 5% annual development charge for 5 years. We’re projecting that to nearly double now,” Caulfield mentioned. “It’s not a one-time factor. It’s a structural shift, that the pervasive want for semiconductors is accelerating.”
