GlobalFoundries CEO says Singapore, New York or Germany to decide capacity

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GlobalFoundries CEO says Singapore, New York or Germany to decide capacity

SINGAPORE -- With the global semiconductor crunch failing to abate, U.S.-based chipmaker GlobalFoundries will decide where to increase its capacity -- Singapore, New York or Germany -- by the end of the year, Chief Executive Tom Caulfield told Nikkei Asia.

The company has invested heavily in the past several years to boost its capacity in all three of its manufacturing locations. The chief executive said the company will continue to chase capacity to meet demand for the next five to 10 years, stressing a willingness to make additional investments in any of the three existing sites.

Caulfield was visiting Singapore where the company has announced a $4 billion investment and is currently building a new fab with 23,000 sq. It has announced that it will expand its capacity at its manufacturing sites in the United States and Germany.

He said that the investments we're rolling out today will allow GlobalFoundries to increase output by the end of 2024. Caulfield told Nikkei, "But for us to keep growing, we will have to have plans to start a new facility." He said it would be very difficult for us to ever consider doing a manufacturing facility somewhere else. Caulfield denied a report that the company was considering building a factory in France in partnership with STMicroelectronics.

According to Counterpoint, GlobalFoundries was the world's fourth largest semiconductor foundry for the first quarter of 2022, after Taiwan Semiconductor Manufacturing Co., Samsung Electronics of South Korea and Taiwan's United Microelectronics Corp. It makes various chips designed by U.S. based Qualcomm, Advanced Micro Devices, Taiwan MediaTek and others.

TSMC and Samsung have announced massive investments in the United States to respond to rising demand and build more robust supply chains. Caulfield said that rivals' attempt to diversify their global footprint will be very difficult and very painful. He said that you will always see us expanding at existing sites. He disdains new locations because he does not want to have to build a team from scratch. Caulfield said that one of the biggest advantages of GlobalFoundries is that they operate on three continents and have a global supply chain. GlobalFoundries focuses on producing chips no tinier than 12 nanometers, unlike its Taiwanese and South Korean rivals, which produce the most advanced semiconductors.

Caulfield said demand for chips will grow as they get into more cars, high-end smartphones and connected devices. He said that the gap between demand and capacity for the chips GlobalFoundries produces will be prolonged. He said we'll be investing for the better part of the next decade.

In June of this year, research company IDC warned that new fabs and investment announcements will add significant capacity and could increase the risk of overcapacity beyond 2023. Caulfield said demand for PCs and lower-end smartphones is softening. He said that the little bits of softness we're seeing are allowing us to close some gaps. He concluded that the only thing that could hinder the growth of the semiconductor industry would be a huge macroeconomic event.