Globalfoundries, one of the top semiconductor manufacturers in the world, is investing $4 billion in a new manufacturing facility in Singapore as it looks to address an continuing shortage of chips that is affecting global automotive and electronics industries, its chief executive said.
The company, a unit of Abu Dhabi’s sovereign investment fund Mubadala Investment Company, will finance the expansion through its own, the government and long-term customers’ investments, Thomas Caulfield told an online ground breaking ceremony on Tuesday.
“We are expanding our global manufacturing footprint, starting with a new fab [foundry] in Singapore,” Mr Caulfield said. “This is a true symbol of what can be achieved by combining government [and] customers' partnerships and GF investments.”
The US-based company will spend $1bn each to expand manufacturing capacity in the US and Germany over the next two years, he told a separate media briefing on Tuesday. In March, GF said it plans to invest $1.4bn in 2021 to expand its manufacturing capacity across Singapore, Europe and the US.
“GF is currently the only global semiconductor manufacturer of scale with a global footprint and we are stepping up and meeting the challenges of global semiconductor shortage by accelerating our investment not only in Singapore but around the world,” Mr Caulfield said.
“Working in close collaboration with our customers and the government of Singapore is a recipe of success that we are pioneering here and looking forward to replicating it in the future in Europe and US.”
Automotive manufacturers and electronics companies, including some of the world’s biggest computer and smartphone manufacturers, are facing a shortage of chips, exacerbated by the Covid-19 pandemic that has disrupted supply chains globally.
Car manufacturers such as Germany’s Volkswagen and Ford and General Motors in the US had to trim production due to a chip shortage, prompting the semiconductor industry to boost investments to plug the supply gap.
In March, chip maker Intel said it will invest $20bn to expand its manufacturing facilities as it expects chip shortages to spill over into next year. In March, Taiwan-based chip maker TSMC unveiled plans to invest $100bn over the next three years to increase its production capacity.
Semiconductor manufacturers are also looking to capitalise on future demand growth, spurred on by the need for digitalisation amid the global pandemic. The worldwide semiconductor market is expected to grow by 19.7 per cent in 2021 before slowing down to a 8.8 per cent growth in 2022 to $573bn, according to World Semiconductor Trade Statistics, a global trade body representing chip makers. The growth will be mainly driven by demand for memory chips, it added.
CEO of GlobalFoundries
“It took 50 years for the industry to grow to $500bn today and now it is estimated that the industry will grow to a $1 trillion in roughly eight years,” Mr Caulfield said. “It is hard to overstate the amount of investment and focus [needed] in order to meet this challenge.”
The new 23,000 square feet manufacturing unit in Singapore will be adjacent to GlobalFoundries’ existing campus. It will add a capacity of 450,000 300-millimetres wafers per year that will push its Singapore hub’s capacity to 1.5 million 300mm wafers annually. The new foundry will also add 1,000 highly-skilled jobs.
“We have several long-term customers’ agreements in place,” Mr Caulfield said.
The company has more than 250 global customers and currently operates a total of nine manufacturing centres including in five sites in the US and others in Dresden, Germany and Singapore.
Investment in the new Singapore facility is timely in the wake of growing importance of the semiconductor industry in every aspect of life, Khaldoon Al Mubarak, group chief executive of Mubadala, said.
The pandemic has also accelerated technology trends across healthcare, FinTech, satellite communications, education, automation, mobility and enterprise sectors and “semiconductors are vital to all these sectors, which are in themselves long-term investment priorities at Mubadala”, he said.
Since the onset of Covid-19, “the need for the companies to be digital first has accelerated at an outstanding rate and “it has required almost every company, every government worldwide to adapt and think like a tech company”, he added.
