Industry paradigms exist to be challenged and ultimately changed. If you entered the semiconductor industry in the 1980s, 1990s or 2000s, the industry always had a single leader – Intel Corporation. Yet, that started to change as Intel’s executives and managers started to adopt the ‘you can’t beat us’ attitude, missing the boat completely on complex accelerators such as the GPUs (Graphics Processing Units) and more importantly, the mobile revolution with the SOC (System on a Chip).
Industry trends shifted and different players appeared. Today, Samsung Semiconductor is the largest player in the industry, manufacturing both logic and memory, digital and analog – producing 15.5% of worldwide semiconductor output. Taiwan Semiconductor Manufacturing Company Co. (TSMC) follows in the second place with 11.9%, while Intel sat in third with 4.4%. However, the numbers changed as GlobalFoundries (former AMD foundry business), backed by Mubadala Development Company – completed the acquisition and made further investment into IBM’s foundry business.
According to IC Insights, GlobalFoundries completed the 2015 with wafer manufacturing capacity of 762,000 wspm (wafer starts per month) i.e. 4.7% of worldwide capacity, pushing Intel into the fourth position. As Intel transitions to 14nm, the company reduced capacity by 1%, to 714,000 wspm. GlobalFoundries is not expected to reduce capacity anytime soon, as the company continues the path of increasing market share.
Furthermore, GlobalFoundries recently completed the purchase of more land around Fab 8 site in New York State, as they plan to add in more manufacturing capacity. The Fab 8 site was originally called for a single clean room with 60,000 wspm capacity, which radically increased as the world demand for semiconductors increased almost exponentialy, mostly due to explosion in mobile market, with smartphones and tablets requiring billions of additional semiconductor products – processors and memory chips – to be manufactured in order to satisfy the demand. Today’s plans call for three large clean rooms, which would take GlobalFoundries ever so closer to TSMC. Still, not even three clean rooms at Malta, NY would not suffice to overtake TSMC. Thus, we managed to learn that key goal of GlobalFoundries is to increase the revenue into a $10 billion range. While the numbers are not made public, GlobalFoundries achieved estimated $4.4-4.6 billion in 2014, but the numbers for 2015 should be significantly different due to acquisition of IBM’s foundry business.
Given the current situation with the oil prices, it is not surprising that ATIC (Advanced Technology Investment Company is owned by Mubadala Abu Dhabi) as the principal backer explored a sale or a spin-off – either to a competitor, private equity or taking the IPO route. By overtaking Intel and entering the Top 3 semiconductor manufacturers, the company now owns or co-owns significant chunk of future semiconductor business, as it was IBM and AMD / GlobalFoundries that invested the most in Ultra Violet Lithography research in Albany, New York State. 2016 will see the arrival of its in-house built 14nm FinFET process through products from AMD and Qualcomm. Besides New York state in the USA, GlobalFoundries also operates state-of-the-art manufacturing facilities in Dresden, Germany and Singapore.
Now that the principal backers achieved their goal of entering the Top 3, the question beckons – are GlobalFoundries recieve further funding, gunning to become the Emirates of semiconductor world, or has the company peaked and is a takeover target for Intel / TSMC / Samsung? We are heading into very interesting next couple of months…