Co-investment or subsidy? Globalfoundries readies for US ‘partnership’

Co-investment or subsidy? Globalfoundries readies for US ‘partnership’

Business news |
By Nick Flaherty

Caulfield sees a global semiconductor supply chain imbalance and Taiwanese dominance of global wafer production. “We need a little more balance in the supply chain,” he said while observing that US-headquartered companies serve 47 percent of the total chip market but only 12 percent of the world’s chips are manufactured in the US.

In recent months there have been political moves to use US tax payers’ money to support domestic chip manufacturing.

When asked if Globalfoundries could benefit from US government subsidies and use them to expand manufacturing or even build an additional wafer fab, Caulfield said: “I don’t like the word subsidy. It sounds like a government hand-out. I prefer co-investment. It used to be the case that we let open-market competition decide who the winners and losers are. But countries are not doing that. They are treating semiconductors as strategic and the US is realizing we have to do the same. That’s what the CHIPS Act is about.”

Caulfield continued: “We are growing our global footprint. We are accelerating growth and we will decide how best to do that.”  He said Globalfoundries has already invested billions of dollars in US manufacturing and asked who is better placed than Globalfoundries to invest further funds under US government policy.

When asked if Globalfoundries was still on course to stage an initial public offering of shares in the company, despite problems such as the Covid-19 pandemic, Caulfield said: “We have conviction. There are certain metrics you have to meet. Can you meet the top-line [revenue] you want? We’re on-track for a late 2022 IPO.”

To date, Globalfoundries has invested $12bn in Fab1 in Dresden, Germany, which processes 22nm, 28nm, 40nm and 55nm technologies on 300mm wafers. It has nine other 200mm and 300m fabs in Singapore as well as the US after buying IBM’s East Fishkill 300mm fab.

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