SINGAPORE – US-based semiconductor maker GlobalFoundries announced Tuesday that it is building a new factory in Singapore to meet unprecedented global demand for chips.
The new facility is being developed in partnership with the Singapore Economic Development Board and with co-investments from dedicated customers, GlobalFoundries said. According to the company, more than $ 4 billion will be invested in the development.
“Our new facility in Singapore will support rapidly growing end markets in the automotive, 5G mobility and secure devices segments with pre-existing long-term customer contracts,” said Tom Caulfield, CEO of GlobalFoundries, in a statement.
A global shortage of semiconductor microchips is causing havoc, delaying auto production and affecting the operations of some of the largest consumer electronics manufacturers.
Singapore’s Minister of Transport, S. Iswaran, as well as the Managing Director of the Mubadala Investment Company and Group CEO Khaldoon Khalifa Al Mubarak took part in a virtual groundbreaking ceremony for the plant.
Mubadala, a state-owned investment company in the United Arab Emirates, owns GlobalFoundries.
“The semiconductor industry is a cornerstone of Singapore’s manufacturing sector, and
GlobalFoundries’ new fab investment demonstrates Singapore’s appeal as a global hub for advanced manufacturing and innovation, “said Beh Swan Gin, chairman of the Singapore Economic Development Board, in a statement.
Importance of foundries
Semiconductors are critical components that provide power to all types of electronics, from smartphones to computers to brake sensors in cars. Their production encompasses a complex network of companies that develop the chips, companies that make them, and the technology, materials, and machinery for them.
GlobalFoundries is a so-called “pure” foundry with plants in the USA, Germany and Singapore. Foundries are companies commissioned by semiconductor companies to manufacture chips. GlobalFoundries makes semiconductors developed by AMD, Qualcomm and Broadcom.
The global chip shortage has highlighted the importance of foundries investing billions in new production lines and upgraded equipment to meet growing demand.
According to TrendForce, Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest foundry in terms of market share and sales. It has around 56% market share, followed by Samsung (18%), UMC (7%) and GlobalFoundries (7%).
Semiconductor designers and manufacturers are trying to make chips smaller and better. At the moment, only TSMC and Samsung have the ability to make the most advanced chips.
For his part, Caulfield told CNBC earlier this year that GlobalFoundries plans to invest $ 1.4 billion in its foundries to address the shortage. The company plans to expand capacities at all production sites.
– CNBC’s Kif Leswing contributed to this report.