GlobalFoundries’ Parent Company to Sell Off Whole or Part of the Chip Maker – Currently Looking For Potential Buyers


GlobalFoundries is one of the key players in the contract foundry business and a very important business partner for AMD. A recent report by bloomberg indicates that its parent company, Mubadala Development wants to sell off the business and is looking for prospective buyers. The sale could either be part or whole of the chip maker. The eventual transaction (if it occurs) is thought to be valued at around $15-$20 Billion.

globalfoundries_semiconductor_wafers_300mmA file photo of 300mm wafers at GloFo. @GlobalFoundries Public Domain

Mubadala Development Co. looking for potential buyers for Global Foundries

GlobalFoundries was acquired by Mubadala back in 2009 and was merged with the facilities of Singapore Chartered Semiconductor Manufacturing Ltd. It is one of the biggest and most advanced chip fabrication facilities on the planet. GlobalFoundries has the responsibility of fabricating AMD's 14nm FinFET chips - something that has been anticipated for a long time and a change in management could potentially cause delays, leaving AMD to rely solely on TSMC. The company issued the following statement on record:

“Globalfoundries has grown significantly, with fabs on three continents and world-class technology and businesses,” Mubadala spokesman Brian Lott said in an e-mailed statement. “We continue to be committed to this industry and to growing Globalfoundries, to meet customers’ leading-edge technology requirements and providing them with world-class service.”

It is worth pointing out that the decision to look for selling off GlobalFoundries has almost nothing to do with the state of the foundry and everything to do with the slump in the crude oil market as well as the Abu Dhabi government looking to offset that by selling of assets of state-owned companies. GloFo also owns IBM's chip unit - which IBM gave it off with a compensatory value of $1.5 Billion, since the business was unprofitable.  More interestingly however, it appears that GloFo has plans to establish a plant in New York as well as Dresden, Germany and Singapore.

It remains to be seen, what affect, if any, this will have on the actual workings of the foundry.  The relationship between AMD and GlobalFoundries is governed heavily by the Wafer Supply Agreement - which should stay intact regardless of the ownership changing hands. I would also like to point out that the deal could simply fall through - it has happened multiple times in the past and wouldn't really be surprising if it happened again.

GloFo will be working on the 14 LPP and LPE nodes for AMD - something which should offer better economies than TSMC's 16FF+ node. It will also be used in Zen's fabrication. I don't need to mention how important Zen is for AMD's continued existence, which means that Red cannot afford any hurdles at this point in time. This is why, ironically, while there wont be any major consequences for GlobalFoundries, it could have consequences (in terms of short delays) for AMD.