GlobalFoundries to Invest 5 Billion USD in 2011: Dresden, New York, Abu Dhabi

GlobalFoundries announced today that the owner of the company doubled its capital expenditure in 2011. Instead of 2.5 billion, the company will invest 5 billion U.S. Dollars on "expanding its semiconductor business."

According to Ibrahim Ajami, CEO of ATIC (Advanced Technology Investment Company), ATIC decided to react to recent announcements made by Intel and TSMC and heavily invest into GlobalFoundries. In fact, the level of this investment is over 120% of overall revenue made by GlobalFoundries on their own.

The investment group did not disclose where the additional resources will take place, but there is plenty of locations to invest in: Dresden is getting a a fully equipped second clean room (Fab 9?), a completely new third clean room (Fab 10?), second and third clean rooms in Malta, New York (Fab 11?, Fab 12?), as well as funding the development and building the first semiconductor manufacturing facility in Arabian part of Middle East (Fab 13?). Dubbed "Mega Fab", ATIC will invest six billion U.S. dollars to build it and should come online in 2015.

To us, this announcement makes perfect sense, given the recent change in shareholding structure. Only few weeks ago, Mubadala Abu Dhabi took control over ATIC. According to information available, Mubadala owns around 20% of AMD and their subsidiary ATIC owns 86% of GlobalFoundries.

At this point in time, it is unknown if AMD is going to further divest its interest in the company or not. Bear in mind that Mubadala Abu Dhabi, sister fund of ATIC – owns over 20% of AMD themselves. One thing is certain though – Mubadala/ATIC do not plan to stop investing in semiconductor manufacturing industry anytime soon.