One could even argue that the comment is similar to the “full support” meme that could indicate that the announcement of a sale – or a joint-venture to dilute Mubadala’s holding – may be just weeks or months away.

For several weeks there has been speculation that Abu Dhabi’s sovereign wealth fund Mubadala Investment Corp. is ready to end or curtail its decade-long, multi-billion-dollar investment in semiconductor manufacturing. And it is not the first time the idea has surfaced. There were reports of an approach from China and other discussions over the future of Globalfoundries in 2015 (see Report: Abu Dhabi holding talks over GloFo sale).

The arguments in favour of a sell off or break up of Globalfoundries are as strong today as they were then, and anything short of a flat denial will do little to stem the speculation. One thing that could delay or hinder a sale is the complexity of Globalfoundries own portfolio of fabs and technologies, and the geopolitics that might prevent a Chinese bidder from being able to engage as a purchaser.

What Mubadala’s CEO did provide on a visit to Globalfoundries’ Woodlands facility in Singapore this week were warm words that apply to the present but say nothing about the wealth fund’s intentions for Globalfoundries going forward (see Mubadala says GloFo is “integral” to portfolio). One could even argue those warm words served to enhance the appeal of Globalfoundries to potential buyers or partners.

I remember once being told to watch out when a company redecorates its headquarters’ entrance lobby because it could indicate the business is being put up for sale. The paint job would be the company’s way of seeking to enhance the perceived value of the business for executives that might visit for negotiations.

Next: Struggle

I don’t know if paint brushes have been wielded in any of Globalfoundries’ entrance lobbies but what is clear is that the last seven or so years have been tough for the foundry. It has struggled to stay on pace at the leading-edge of semiconductor manufacturing. Back in 2014 it had to junk a two-year R&D effort and license a 14nm FinFET process from Samsung. This is not good for winning customers who would probably rather be with the primary source of the technology and much of the business may have ended up being gate-keepered by Samsung.

More recently Globalfoundries also gave up on 7nm FinFET R&D (see Analysis: Outpaced by TSMC, GloFo cuts its cloth). It’s long time anchor customer and the original source of its manufacturing technology a decade before, Advanced Micro Devices Inc., had been firing warning shots about splitting production with Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) was able to re-align itself to the world’s largest foundry quickly once Globalfoundries made its decision.

But over the same seven-year period Globalfoundries appears to have struggled to pick up the necessarily broad swathe of customers needed to drive demand for a diverse set of behind the leading-edge process technologies. A diverse set of manufacturing processes means more R&D, and potentially smaller individual customer orders and this can only be compensated for by lots of customers.

According to Mubadala’s website Globalfoundries now has more than 250 customers. But how many are in high volume and is that enough?

Rival foundry TSMC occupies the envied position of being almost everybody’s go-to manufacturer. Once upon a time “nobody got fired for buying IBM” and now fabless chip companies and startups appear to favour the usually reliable TSMC in the same way, unless they just can’t get TSMC to pick up the phone to take their order.

Globalfoundries’ struggle also showed up in attempts to get TSMC investigated for alleged unfair sales practices in 2017 and 2018 (see Report: GlobalFoundries accuses TSMC of unfair selling and Report: Globalfoundries asks China to probe TSMC). TSMC denied wrong-doing but some of the numbers that emerged at that time showed that TSMC’s position at 28nm and below was very strong and the competition was finding it hard to compete. The wheels of justice also grind exceedingly slowly and so any fall-out from any such investigations may arrive too late to change the commercial landscape for Globalfoundries.

Next: Getting a trim

Another indicator is that Globalfoundries’ MEMS foundry is coming to an end with the sale of the Tampines Fab 3E in Singapore (see GloFo sells MEMS business, fab to Taiwan’s Vanguard). This is a classic More-than-Moore manufacturing business and the medium and long-term outlook is for growth. Surely this should fit well with the diverse business model Globalfoundries is pursuing; so why the need to sell? One can only assume that insufficient numbers of customers and orders, and unsatisfactory margins are the reasons.

Off-loading the Tampines fab may have been done to improve Globalfoundries profitability for its own and for Mubadala’s sake. Or it may have been done to make Globalfoundries accounts look more attractive and increase the likelihood of a sale.


And then there is the fully-depleted silicon-on-insulator (FDSOI) manufacturing process with its claimed advantage of being dynamically tunable towards performance or towards frugal power consumption by way of body biasing. This is one area where Globalfoundries has had some success.

Originally researched by IBM Microelectronics, FDSOI was picked up and developed by STMicroelectronics at 28nm and then licensed on to Globalfoundries and Samsung. Samsung started running 28nm FDSOI for ST and Freescale (now NXP) in 2015. At the same time Globalfoundries announced it would introduce the next generation of FDSOI at 22nm. In 2017 Samsung announced a roadmap to 18nm FDSOI to leapfrog Globalfoundries’ 22nm.

Back in July 2018 Globalfoundries said that customers’ revenue using its 22nm manufacturing process (22FDX) had surpassed $2 billion. But the process was launched in July 2015 and that was three years after ST had tipped Globalfoundries as an FDSOI partner. And that $2 billion was customers’ revenue. Globalfoundries’s revenue will have been some fraction of that. Still it represents real commercial revenue at last after many years of development with a technology that provides differentiation. Globalfoundries said it had manufactured 50 ICs designed in its 22FDX process that address applications across automotive, 5G connectivity and the Internet of Things.

Nonetheless, the conclusion must be that while FDSOI has started to achieve some traction it is still very much the adventurous alternative to mainstream planar CMOS and FinFET manufacturing processes. The high volumes that might boost Globalfoundries have not yet materialized and it looks like they may come too late.

Next: Dresden

And then there is Globalfoundries in Dresden. The European arm of Globalfoundries admits that it had to lay off more than 10 percent of its staff and put others on short-time work in June 2018 due to the loss of a major customer. That was part of a broader round of lay-offs (see Globalfoundries cutting 5% of staff) but clearly the axe fell deeper in Dresden. At the same time the company lost the well-regarded Rutger Wijburg who had been general manager there. He moved across to a vice president’s role at Infineon Technologies AG.

My concern for Dresden is that it could be left out in the cold while a purchaser cherry picks Globalfoundries’ manufacturing sites in Albany, New York, Singaopore and potentially a joint venture fab it has in construction in Chengdu, China.

And then there is other circumstantial evidence.

Early in February 2019 Mubadala sold nearly 35 million AMD shares although it also plans to convert 75 million warrants into equity which will leave it with about a 6.9 percent stake in AMD. Mubadala has been a major holder of AMD, since 2007, before the formation of Globalfoundries, but Mubadala has gradually reduced its position over time. And if Mubadala is reducing its position in AMD why would it not seek to do so in Globalfoundries?

My final thought is that Mubadala saying GloFo is “integral to its portfolio” is like a soccer club chairman or chairwoman saying he or she backs the team manager 100 percent, or a prime minister saying a colleague has their “full support.”

In the cases of football and politics it often means that a parting of the ways is imminent.

Related links and articles:

Crown Prince’s visit fuels rumour of GloFo sale

Mubadala says GloFo is “integral” to portfolio

Report: Abu Dhabi holding talks over GloFo sale

Analysis: Outpaced by TSMC, GloFo cuts its cloth

GloFo sells MEMS business, fab to Taiwan’s Vanguard

Report: GlobalFoundries accuses TSMC of unfair selling

Report: Globalfoundries asks China to probe TSMC

Samsung adds 4nm and FDSOI processes to roadmap

GloFo claims FDSOI chip revenue has reached $2bn

Globalfoundries cutting 5% of staff

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