Several weeks ago, we learned that the board of directors at Mubadala Abu Dhabi met to discuss the future of ATIC and GlobalFoundries. Given the severity of the talks, we were not surprised to hear rumors spreading out of its rivals (mostly from Intel and TSMC) that Mubadala would cut the semiconductor manufacturing arm and focus on profitable businesses.
As the negative rumors go, they typically belong to the standard Fear, Uncertainty, Doubt (FUD) marketing strategy which was invented by IBM and perfected by one of companies we mentioned above. While it was true that GlobalFoundries had negative 1.9 billion dollar turnover in its first year, followed by a negative 1.x billion dollar turnover in the next, the company is on track on becoming profitable by 2015, as stated by Ibrahim Ajani, CEO of ATIC.
Also, have in mind that even though GlobalFoundries had significant losses, it also recorded investments in excess of 10 billion US dollars. In its first year of operation, it also acquired Chartered Semiconductor, all in a bid to offer top to bottom chip foundry capabilities.
Mubadala Abu Dhabi made an executive decision not just to keep funding the ATIC arm, but also decided to invest further three billion dollars in expanding the capabilities of GlobalFoundries. Recently, GlobalFoundries made an announcement that the company is on track to deliver the 14nm process (14XM) in 2014, shortening the life span of its 20nm process node to a bare minimum. The foundry expects to manufacture bulk of its silicon using 28nm during 2013, with 14XM coming online the year after. 14XM process will offer both FinFET (tri-gate, 3-D transistors) and Fully Depleted SOI, and could offer better transistor performance than Intel – at least, that’s what was told to us by sources close to SIA (Semiconductor Industry Association).
On the downside, we learned that the Singaporean government is not happy with the level of investment that GlobalFoundries made following the acquisition of Chartered, and that there are serious talks between Temasek (investment arm of the Singaporean government) and certain Far Eastern semiconductor manufacturer about setting up shop in Singapore.
According to sources in the know, second victim of New York and Dresden expansions is Abu Dhabi itself. Originally, ATIC planned on breaking ground on its semiconductor foundry in Abu Dhabi by 2015, which is now postponed. When we were briefed for the Abu Dhabi plant in 2010, the plan was to have the foundry 100% powered by renewable sources of energy. We weren’t able to get the timeline of postponement, but it probably won’t happen before 2018-2020.
In any case, if you heard that GlobalFoundries is exiting the semiconductor business, you can put those rumors to rest. In fact, we would not be surprised if the company makes an announcement to acquire IBM’s manufacturing facilities. Or simply keeps on expanding the NY State and Dresden facilities, with Singapore continuing to serve the expanding analog circuitry market.