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Semiconductor manufacturer Grofand It debuted on Nasdaq this week and is valued at more than $25 billion, as it is becoming increasingly clear that the global chip shortage may continue until 2023 or later.
Now GlobalFoundries needs to convince open market investors that the company is riding the wave of increasing demand for various microchips. After the pandemic-related supply problems subsides, this demand will not disappear, and even if it costs tens of In the case of billions of dollars, it can also improve profitability. Capital-intensive business.
“I think for most of the next 5 to 10 years, we will chase supply rather than demand,” GlobalFoundries CEO Tom Caulfield said in an interview with CNBC. GlobalFoundries’ customers include Qualcomm, MediaTek, NXP Semiconductors with Kovo.
Automobile companies and home appliance manufacturers have been struggling to obtain enough chips to make products for months, and now the problem is spreading to electronics manufacturers and their suppliers.For example, Apple says it will miss Sales of more than 6 billion U.S. dollars This holiday is due to a shortage of chips. Intel It also attributed its low CPU sales to the shortage of power supplies and network chips.
But the shortage does not apply to the most advanced chips using the latest manufacturing methods. On the contrary, what is in short is what are usually called “traditional nodes,” or semiconductors that use old technologies to perform power management, connect to displays, or enable wireless connections.
Caulfield explained that these are the types of chips that the third-party silicon foundry GlobalFoundries manufactures specifically for its customers.
“This is the main part of the shortage because of insufficient investment in this area,” Caulfield said. “For me, we are very happy to let big companies serve that single-digit nano market, and we will do our best in differentiated technologies.”
The profitability of the foundry business is related to the utilization rate or the speed at which the foundry’s factories operate around the clock. GlobalFoundries has a utilization rate of 84% in 2020, but Caulfield said this is related to the slowdown at the beginning of the pandemic.
“I want to say that since August 2020, we have not had enough production. Every day, we try to squeeze out as much as possible. I want to say that we have exceeded 100%,” Caulfield said, adding that the company’s crystal By the end of 2023, production capacity has been sold out.
Caulfield said that GlobalFoundries made a strategic decision in 2018 to stop developing the cutting-edge chip manufacturing technology that TSMC and Samsung are investing in, and instead focus on providing its customers with less advanced but still essential semiconductors. .
The business model of the foundry has a low profit margin and faces high labor, equipment and raw material costs. GlobalFoundries stated in its prospectus that its gross profit margin is close to 11%. First half of 2021.
Caulfield said that of the $2.6 billion GlobalFoundries raised on the open market, $1.5 billion will be used for capital expenditures to increase the ability to meet demand. It has factories in the United States, Germany and Singapore.
GlobalFoundries stock price closed down 1.3% on Thursday, lower than its initial price of 47 US dollars, rose more than 5% on Friday to close at 48.74 US dollars.
The company is still held by Mubadala, the National Investment Fund of the United Arab Emirates, holding more than 85% of the shares. In 2008, when AMD spun off its manufacturing division (to become GlobalFoundries) and focused on chip design, Mubadala took over the company.
Caulfield said that Mubadala will reduce its ownership of GlobalFoundries in the next few years, but will continue to support the manufacturer.
“In the next five to six years, in a very orderly and transparent way, [Mubadala will] Take away some of their ownership to get more balance,” Caulfield said.
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