Just don't buy it right after its IPO. Copyright 2023 MarketWatch, Inc. All rights reserved. GlobalFoundries expects to be priced between $42 and $47 to raise $1.55 billion by offering 55 million shares - 33 million shares from the company and 22 million The information provided herein is intended for general circulation. Does Intel have a foundry? If youre looking for analysis on the new Malta investment here. Taiwan Semiconductor Manufacturing Co said on Friday that a cybersecurity incident involving one of its IT hardware suppliers has led to the leak of the vendor's company data. if (location.search.indexOf("continueReading=1") >= 0) { jQuery(window).load(function() { jQuery(window).scrollTop(jQuery("#continueReading").offset().top - 35); });}, Appreciation is great, but its possible to get even more out of the shares you own. The Malta, N.Y.-headquartered silicon wafer foundry known as a fabrication plant or fab in industry parlance bills itself as the third largest foundry in the world based on external sales. While the world finds itself in a chip shortage and fabs have more work than they know what to do with, GlobalFoundries has yet to swing to a profit, but its showing some signs of improvement. It's currently a private company owned by the government of Abu Dhabi. Those are the kinds of chips that GlobalFoundries, a third-party silicon-wafer foundry, specializes in manufacturing for its clients, Caulfield explained. Globalfoundries has less than 10 percent of the market and last year took on a new cost-cutting strategy that included laying off more than 400 workers at its Fab 8 factory in Malta. In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. "I think for the better part of the next five to 10 years, we're going to be chasing supply not demand," GlobalFoundries CEO Tom Caulfield said in an interview with CNBC. Ltd. at 6826 9988 for matters arising from, or in connection with the report. }); Money Morning gives you access to a team of market experts with more than 250 years of combined investing experience for free. TSM, GlobalFoundries manufactures secure chips for contactless payments, battery power management and touch display drivers. GlobalFoundries has stated its intention to optimise its business and manufacturing footprint to improve the bottom line and return on capital. Or to contact Money Morning Customer Service, click here. (We will decline to comment on rumor and speculation, an Intel spokesperson told The Verge, though. Ltd. 1 Raffles Place, #12-62 One Raffles Place Tower 2 Singapore 048616. GFS Chips that are designed to enable specific features are what GlobalFoundries specializes in. Ltd. is not under any obligation to update this report. Financial terms were not disclosed, and Kinderhook declined to comment. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (SGX). Originally an AMD spinoff, GlobalFoundries found early success But Caulfield says the industry shortages, specifically for the automotive world, aren't because of demand for leading node chips. Micron Technology Inc. The company was listed on the Singapore Exchange under the trading symbol of CHARTERED, as well as on NASDAQ (CHRT). In an interview with Reuters, Chief Executive Thomas Caulfield said margins have already risen to 17% in the third quarter and are likely to rise more as the company invests $6.5 billion - some of which comes from Thursday's IPO - in its factories. I would say we're over 100%," Caulfield said, adding that the company's wafer capacity was sold out through the end of 2023. However, most of the investments in the foundry world have been for building bleeding-edge, high-speed chips. Despite the company's optimistic outlook on revenue, its sales haven't grown. 6981, Taiwan-based TSMC, the biggest company in the space with a 54% market share, said on Thursday it plans to invest $100 billion over the next three years to increase its capacity to meet demand. GlobalFoundries is set to build a second factory near Malta and spend $1 billion to up its output by 150,000 wafers per year to address the global chip shortage. "The minute you say, I want to make more capacity, it's a 12-month cycle," Caulfield said. Mubadala, a United Arab Emirates state investment company, owns GlobalFoundries. Its also intriguing that the Journal doesnt have a no comment from Intel itself thats sometimes a canary to indicate a company did comment, just off the record or on deep background. A Division of NBCUniversal. The company did see a slight improvement during the first half of 2021, with reported revenue of $3.04 billion and a loss of $301.2 million. MediaTek Inc. Sign up for free newsletters and get more CNBC delivered to your inbox. Best Debt Consolidation Loans for Bad Credit, Personal Loans for 580 Credit Score or Lower, Personal Loans for 670 Credit Score or Lower. Although GF realized that the world needed diversified chips, it was already too late due to unforeseen circumstances when the pandemic hit. Ltd. (SFP) for the offering of dealing services in Contracts for Differences (CFD). But during this time of intense chip shortage, when fabricators are buried in orders due to high demand, GlobalFoundries has yet to turn a profit. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. 2023 Money Morning All Rights Reserved. Shares of semiconductor foundry GlobalFoundries ( GFS -3.41%) soared 23.2% in February, according to data from S&P Global Market Intelligence. -0.94%, TSMCs revenue for 2020 was some $45 billion US dollars. There are no complicated trades to put on, no high-level options clearances necessary. Originally an AMD spinoff, GlobalFoundries found early success after its October 2021 IPO. By Money Morning Staff Reports, Money Morning October 26, 2021. https://www.wsj.com/articles/chip-maker-globalfoundries-revamps-brand-amid-global-chip-shortage-11626696002. Sign up for free newsletters and get more CNBC delivered to your inbox. We deliver feature-rich GlobalFoundries is an Equal Employment Opportunity/Affirmative Action (EEO/AA) We've detected you are on Internet Explorer. Heres why Intel acquiring chipmaker GlobalFoundries is a - For non-personal use or to order multiple copies, please contact Want to trade more IPOs? WebExplore Life at GF Our Mission At GF, we innovate and partner with our customers to deliver process technology solutions for all humanity. GlobalFoundries finished its first day of trading at $46.40, slightly lower than the $47 per share it priced in the initial public offering (IPO). The chip maker raised $2.6 billion in the third-largest IPO in the United States so far this year, trailing South Korean e-commerce giant Coupang Inc (788.F) and ride hailing company Didi Global Inc (DIDI.N) . The rate of loss has slowed however, with the company showing a loss of $1.37 billion for 2019 and $2.77 billion for 2018. GlobalFoundriess competitors in the semiconductor space includes industry leader Taiwan Semiconductor Manufacturing Co (TSMC), as well as its Taiwanese rival United Microelectronics, Chinas Semiconductor Manufacturing International Corp (SMIC) and US operators Vishay and Microchip. "The semi industry going into Covid was projecting a 5% annual growth rate for five years. Chief Quality Officer. The Washington Post took a tour of GlobalFoundries facility in Malta, NY just last week, if youd like to hear what its like. "For me, we're happy to let the bigger companies kind of serve that single-digit nanometer market, and we will be the very best in our differentiated technology.". Mubadala originally planned for GlobalFoundries to go public in 2022 or 2023. NXPI, While the world is in a chip shortage, the collaboration between fabless and foundry will ensure that GF can manufacture in high volume while meeting critical time-to-market windows. 2023 Vox Media, LLC. All quotes delayed a minimum of 15 minutes. GlobalFoundries warned it will take months before it can increase the number of chips on the market, but that the capacity boost makes sense for long-term investments. The new era GFs transformation story goes further back than the beginning of the pandemic and the chip shortage. AMD, Skyworks Solutions, Inc. See here for a complete list of exchanges and delays. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. and Broadcom Inc. Samsung Electronics Co. GlobalFoundries stock has to prove itself first by more consistently turning a profit, especially outside of this massive chip shortage. GlobalFoundries is exposed to growth in mobile devices, data centers, IoT, automotive, and beyond. GF says it new brand logo is the combination of a logomark and a wordmark that tells its story. SWKS, In 2015, GlobalFoundries took over IBMs microelectronics business. Maybe let the share price drop just a bit, then make your move. Caulfield said demand is likely to remain high for years, with acute shortages lasting into next year. Not yet. TSMC, which makes chips for the iphone, owns half of the so-called foundry market making chips for other companies. Back then, Advanced Micro Devices Inc. (NASDAQ: AMD) moved out of the fabrication business and split up. But the company's gross margins remain markedly lower than other chipmakers at 10.8% in the six months ended June 30, well below the margins of 40% or more enjoyed by Taiwan Semiconductor Manufacturing Co (2330.TW) or Intel Corp (INTC.O). A lot more: you can easily beat inflation and collect regular income to spare. Source GlobalFoundries. Wallace Witkowski came to MarketWatch from the Associated Press in New York, where he covered the business of Big Pharma, after covering FDA regulation of many of the same companies, as well as medical devices, in the Washington, D.C., area. ados.run.push(function() { If the company were to land on the higher end, it could be worth more than $25 billion. Electric-vehicle maker Rivian is also expected to list its shares in the coming weeks. In 2019, GlobalFoundries filed patent infringement lawsuits against TSMC, to which TSMC responded by filing its own patent infringement lawsuits against GlobalFoundries. Other foundries are investing big dollars too. Founded in 1999, the firm is one of the largest technology investors in the world. I talked in late 2018 about GF deciding to change its Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. GlobalFoundries owns rights to patents, trademarks, copyrights, trade secrets, and other intellectual property directly related to and important to our business. The world went from progressively moving towards everything being digitally transformed to schools, businesses, entertainment, relationships all going online in a year and a half. So, it's best to avoid investing in it right out of the gate. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Profitability in the foundry business is linked to utilization, or the rate that the foundry's factories are running around the clock. and Taiwans United Microelectronics Corp. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Sign up for Verge Deals to get deals on products we've tested sent to your inbox daily. Got a confidential news tip? GlobalFoundries filed paperwork for its IPO with the SEC on October 4 2021, and the Nasdaq launch happened on October 27. Each part of the logomark then has a different meaning as the company explains: GlobalFoundries new logomark with a half circle, quarter circle, middle shape, and two squares all [+] symbolizing a different part of GFs new brand. GlobalFoundries' clients include Qualcomm, MediaTek, NXP Semiconductors and Qorvo. I write about disruptive companies, technologies and usage models. An error has occurred, please try again later. In the meanwhile, it could snap up GlobalFoundries, the #4 foundry in the world (according to TrendForce), one that accounts for 7 percent of all foundry business by revenue. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. The Malta, New York-based company is a fabricator and supplier of silicon wafers, a key component of semiconductors. The company emerged in 2009 when US semiconductor company Advanced Micro Devices (AMD) partnered with the Emerati state-owned Mubadala Investment Company, with a goal to become a global leader in the contract manufacturing of semiconductors. GlobalFoundries is still a relatively small player, with only a 7% share of the foundry market according to Trendforce. Shares will be listed under the ticker GFS on the Nasdaq. 2454, Data is a real-time snapshot *Data is delayed at least 15 minutes. 2023 CNBC LLC. The company employs more than 15,000 people as of October 2021, and now has five manufacturing sites worldwide. GF does what Intel does not do and does it in a better way for its focused markets. Specifically, GlobalFoundries focuses on silicon wafers designed for 5G communications, automotive, Internet-of-Things (IoT) devices, communications infrastructure and data center, and other specialized chips vital to tech companies. GlobalFoundries was created when Mubadala bought Advanced Micro Devices Inc's (AMD.O) manufacturing facilities in 2009 and later merged it with Singapore's Chartered Semiconductor Manufacturing Ltd. GlobalFoundries expects to be priced between $42 and $47 to raise $1.55 billion by offering 55 million shares - 33 million shares from the company and 22 million being sold by owners Mubadala Investment Company. Follow him on Twitter at: @wmwitkowski. Just from 2022 through 2023, the company expects to earn $10 billion. Our Standards: The Thomson Reuters Trust Principles. and Taiwan Semiconductor Manufacturing Co. In the meantime, you can trade a wide range of stocks with us via these easy steps: Not ready for real money? GlobalFoundries new logomark and its new wordmark in its legacy orange color. Advisers for the transaction were Morgan Stanley, Bank of America Securities, J.P. Morgan, Citigroup and Credit Suisse. +0.28% Semiconductors are enjoying a broadening range of applications, from consumer devices to enterprise and industrial usage, and the company intends to meet demand with its data-centric, connected, intelligent and secure technologies. The company was created in 2009, when Advanced Micro Devices Inc. Protected by copyright of the United States and international treaties. Senior Vice President of Aerospace, Defense & Critical Infrastructure. The company is still over 85% owned by Mubadala, the United Arab Emirates state investment fund. A shortage of semiconductor microchips is causing havoc around the world. QCOM, By redefining how it sees innovation in the semiconductor market, GF owns its forecasts of a diverse chip portfolio. In 2010, GlobalFoundries combined with Chartered Semiconductor Manufacturing, at the time the third-largest foundry by revenue, giving the company its presence to grow manufacturing in Singapore. GFs partners will be pleased to hear of the rebranding and new focus on customer relationships, and I think the world will be in a much better place coming out of the chip shortage. He said those investments will help GlobalFoundries take advantage of brisk demand and that margins will keep improving "in the future quarters as we continue to build our capacity with these investments.". This made for a valuation of some $26 billion. Investor Relations | Globalfoundries Inc. Investor Relations GlobalFoundries (GF) is one of the worlds leading semiconductor manufacturers. "I would say, since August of 2020, we can't make enough. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. She has a master's degree from New York University, and enjoys a scoop of Matcha ice cream as much as getting a scoop at work. Join 100,000+ Like-Minded Investors Today, How AI and Blockchain Are Creating Unprecedented Profit Opportunities in the Big Data Gold Rush, How to Recognize Real Profit Potential in AI Stocks, There Are Three Simple Steps to Allocate Every Nickel in Your Portfolio, Do Not Sell or Share My Personal Information. 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Starlink IPO Buzzfeed IPO How to trade GlobalFoundries shares When GlobalFoundries lists, youll be able to trade its shares in the same way you would any other publicly-traded company on the stock market. Adding to that capacity to produce silicon wafers has been a theme all year with Intel Corp. ados_add_placement(9794, 307044, "azk740606", 2629) The industry was under the impression that innovation, with respect to Moores Law, is towards smaller and faster chips. +2.31% Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement. Oct 28 (Reuters) - Shares of GlobalFoundries Inc , which is owned by Abu Dhabi's sovereign wealth fund Mubadala Investment Co, opened flat on the Nasdaq on Please let us know how you would like to proceed. AMD has a multiyear deal to buy roughly $1.6 billion of silicon wafers from GlobalFoundries, according to a form that AMD filed with the Securities and Exchange Commission.. +0.56%. StoneX Financial Pte. Globalfoundries Virtual Patent Marking: The page linked here is intended to serve as notice under 35 U.S.C. As for what it can grab from that, GlobalFoundries said that it had an estimated serviceable addressable market of about $54billion in 2020, based on data from research firm Gartner. Caulfield said that Mubadala will reduce its ownership stake in GlobalFoundries in the coming years but will still continue to support the manufacturer. We want to hear from you. Morgan Stanley, BofA Securities, J.P. Morgan, Citigroup and Credit Suisse were the lead underwriters for the IPO. It's a special purpose acquisition company (SPAC) opportunity that could triple your investment in a relatively short time. "I think it starts to get better in 2023," he said. symbolizing a different part of GFs new brand. AVGO, / Sign up for Verge Deals to get deals on products we've tested sent to your inbox daily. "That's where the bigger part of the shortage is, because there's been underinvestment in that," Caulfield said. The company subsequently merged with Chartered Semiconductor Manufacturing, based in Singapore, in a $2.5 billion deal. MU, decided to get out of the fab business and spun it off, with the company becoming fully controlled by subsidiaries of Mubadala Investment Co. Back then, it consisted of AMDs fab in Dresden, Germany, and a fab project site in Malta, NY. Automotive companies and home appliance makers have been struggling for months to obtain enough chips for building products, and now the problem is spreading to electronics manufacturers and their suppliers. Although GF was expecting this change in the industry, it came much sooner than expected due to this acceleration in need for semiconductor diversification. Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. and Nvidia Corp. microelectronics division along with more than 2,000 IBM engineers, and facilities in Burlington, VT, and East Fishkill, NY. The incredible thing about GFs new definition of innovation is that it has lead to the need for better partner relationships. Visit our IPO trading page. Thats not counting the option for underwriters such as Morgan Stanley, B. of A. WebChartered Semiconductor Manufacturing was the world's third largest dedicated independent semiconductor foundry, with its headquarters and main operations located in the Woodlands Industrial Park, Kranji Singapore. No representation or warranty is given as to the accuracy or completeness of this information. GlobalFoundries, a global semiconductor manufacturer, has turned to Spot to further automate their data collection for condition monitoring and predictive maintenance. As a silicon wafer fabricator, this puts GlobalFoundries in a unique position to act as a third-party outlet for some the big-name tech companies like Apple Inc. (NASDAQ: AAPL) and Nvidia Corp. (NASDAQ: NVDA), for example. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. All Rights Reserved. In filings with the SEC, GlobalFoundries said trends such as IoT, 5G, cloud, AI and next-generation auto chips are driving a new golden age for semiconductors, a market that it expects to grow to more than $1 trillion by the end of the decade, about double what it is now, based on data from VLSI Research. Distribution and use of this material are governed by Based in San Francisco, his current focus is on the more exciting world of semiconductors, videogames and cybersecurity, when he's not churning out earnings coverage. NVDA, Those customers include Qualcomm Inc. -1.15%, GlobalFoundries Inc. is billing itself as the largest silicon wafer supplier not dependent upon China and Taiwan in an initial public offering planned during a global semiconductor shortage, but that doesnt mean the business will be U.S.-controlled nor profitable. A Division of NBCUniversal. Required fields are marked *, Sign me up for the Money Morning newsletter. GlobalFoundries debuted on Nasdaq this week, valued at over $25 billion. You may opt-out by. 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Considering the extent of the companys losses so far (see below), those interested in the company's shares will be keen to see how such measures develop, and the extent to which GlobalFoundries revenue commitments of $20 billion, with more than half of that figure accounting for the period 2022 to 2023, will translate into bottom line success in the coming year or so. This copy is for your personal, non-commercial use only. Intel We manufacture semiconductors around The company cited Gartner data showing about 72% of silicon wafer sales by revenue went to Taiwan or China, meaning SMIC, TSMC and UMC combined. GlobalFoundries, the third-largest foundry, is planning to invest $1.4 billion in its chip factories this year, and will likely double that investment next year, CEO Tom Caulfield told CNBC in an interview. These chips first were used in large quantities for smartphones, but are now included in a wide range of products from cars to appliances, which has created a surge in demand.