Global Foundries (GF) has made many strategic changes over the past few years, many of which I have written about. The biggest of those was its strategic reset in 2018 to focus on 5G RF, IoT, automotive, and silicon photonics. GF is a big player in the semiconductor manufacturing market that is going through really tough growing pains related to availability, to put it nicely. There has been a massive acceleration in demand for semiconductors, and GF is one of the many industry leaders driving the conversation on how to solve the problem strategically.
Today at an event in Malta, New York, GF announced many ways in how it will do its part to address the chip shortage in the longer and shorter term. The event was attended by U.S. Senate Majority Leader Chuck Schumer and U.S. Secretary of Commerce Gina M. Raimondo. I also weighed on its new branding here.
GF announced building a new fab in Malta, New York, and adding $1B in extra capacity to the current Malta facility. All of this is in line with GF's commitment to double capacity it made earlier this year and on the heels of its $4B Singapore new fab commitment expected to deliver an incremental 450,000 wafers per year.
Extra capacity in Malta
Back in April, GF moved its corporate headquarters to its most advanced semiconductor manufacturing facility in upstate New York.
Today, it is announcing its expansion plans for this facility over the coming years. According to its new business model, GF's plans include investments that tackle the chip shortage at its existing Fab 8 facility. The plans also include constructing a new fab on the same campus that will double the site's capacity.
GF has redefined what it considers innovative in the semiconductor market towards a more diverse and customer-specific demand. Rather than looking towards speed and size and chasing Moore's Law, it looks towards the innovative features that shape the many diverse chips we use today to connect everything. This diverse chip portfolio includes 5G RF, silicon photonics, IoT, and automotive, requiring more specialized technology and processes.
The $1 billion upgrades will be for new equipment and to change the flow to bring the existing Malta shell to full capacity. GF says this investment will immediately bring an additional 150,000 wafers per year within its existing fab and will help directly address the global chip shortage more quickly than the new fab.
New fab in Malta
Alongside the $1B investment in Fab 8, GF plans to fund a brand new facility "through private and public partnerships." GF says this new capacity will serve the growing demand for secure, feature-rich chips needed by high-growth markets, including automotive, 5G connectivity, and IoT. This demand for chips in high-growth markets is the cause for the chip shortage, and Tom Caulfield, CEO of GF, said it is expecting to grow more in the next decade than it did in the past 50 years. This focus on growing markets includes government and automotive leaders, national security experts, and GF customers to ensure the coming supply of chips. The new facility will create an additional 1,000 new high-tech jobs and thousands more indirect jobs as a result of the building of the new facility.
GF says these investments are part of the company's broader global expansion plans. This year it announced its new $4B fab in Singapore and its $1 billion planned investment to expand in Germany, the location of its Fab 1.
It is an exciting day for GF and the entire chip and technology industry. The world needs more capacity and not just bleeding edge from TSMC or Intel. Thankfully, in 2018 it decided to pivot its focus from leading-edge nodes to a more diverse and focused portfolio targeting 5G RF, IoT, automotive, and silicon photonics. I believe GF's strategy aligns with industry leaders across the supplier ecosystem in partnership with local governments, customers, and OEMs. The solution to the chip shortage is not simply to make more chips, and I think GF expresses this in the way it is and has transformed into a company focused on relationships. Some chip companies I talk to say this is different from how TSMC operates.
GF is looking towards a long-term solution to the chip shortage, not just the quick fix. Tom Caulfield said, "GF is stepping up to do its part as we work together to address the growing demand for technology innovation for the betterment of humanity." GF is in it for the long run and understands that the same economics of foundry and capacity that got the industry to half a trillion dollars is not the same investment that will get them to a trillion dollars.
Note: Moor Insights & Strategy co-op Jacob Freyman contributed to this article.