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GlobalFoundries will double capital expenditures and go to IPO next year
GlobalFoundries is the third largest contract manufacturer of semiconductor components, but so far has not been as active in talking about the need to increase capital expenditures. On the issue of expanding American capacity, she preferred to rely on government subsidies. This manufacturer may go public next year.
Image source: CNBC
The current shortage of semiconductor components could be a good incentive for the expansion of the GlobalFoundries business, but CEO Tom Caulfield made it clear in an interview with CNBC that it could take a long time to build new production lines — up to twelve months from the date of the decision. Production capacity is expanding as actively as possible, Caulfield explained, but now all existing lines are more than 100% loaded. For the industry as a whole, as a representative of GlobalFoundries said, supply will not be able to catch up with demand until 2022 or even later.
This year, the company will spend $ 1.4 billion to expand production, and will double this amount next year. The public offering of shares, which is scheduled for the first half of 2022, will also help to do this, although it may take place earlier. GlobalFoundries management welcomes Intel’s decision to become a major contract manufacturer, but does not consider the company a competitor, since it will focus on advanced technological processes, and GlobalFoundries itself specializes in more mature lithography. Moreover, the industry crisis has raised the demand for components manufactured using mature technical processes, and GlobalFoundries will have to focus on eliminating the deficit in this segment.
Before the start of the pandemic, according to the head of the company, the industry was counting on an annual increase in demand by 5% for five years, but now this figure has grown to 10%, and it is appropriate to talk about a long-term trend that justifies serious investments in industrial infrastructure.