New Chipmaker To Invest Billions During Stiff Economy

A newly formed US chip making firm is set to invest billions of dollars in new projects and upgrades in the midst of a struggling global economy.
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Founded on March 2, GlobalFoundries has connections to Advanced Micro Devices (AMD). Its operations consist of from a fabrication plant based in Dresden, Germany, known as Fab 36 and Fab 38 individually when it was still part of AMD. Each module is capable of producing 25000 wafers per month. The company plans to spend $2.7 billion on upgrades to its Dresden plant.

GlobalFoundries also has plans to spend $3.3 billion on a new manufacturing plant in Saratoga County, New York.

“The cornerstone of the Saratoga plant will be the construction and operation of the first 300mm semiconductor manufacturing facility designed for 32 nm technologies at the Luther Forest Technology Campus (LFTC),” the company said.

“With the launch of GlobalFoundries, the project will now move forward with a target construction schedule that will bring the world's most advanced fab into volume production in roughly 2012.”

"If we start working with customers this year, it won't be until 2010 before they start manufacturing with us. So who knows what the economic climate is going to look like in 2010?" GlobalFoundries chief executive Douglas Grose told AFP.

"Our view is that it's going to start to turn and the timing is such that our investments will be ready," he said during a visit to Singapore to meet potential clients.

"When you are sitting at the bottom of an economic thing it may not look good. But in reality the timing is good."

The firm plans to develop high-performance chips that range in sizes from 45 and 28 nanometers (one-billionth of a meter), compared to the current range of 90 and 65 nanometers.

"I think this is a game-changer," said Grose.

GlobalFoundries stands to benefit from the growing number of firms that are outsourcing manufacturing to independent groups.

"In any industry, there's got to be alternatives and we're going to provide some choice to customers on the leading edge," Grose said.

“But the company faces an uphill battle against Taiwan Semiconductor Manufacturing Company (TSMC), United Microelectronics Corp (UMC) also of Taiwan, Singapore's Chartered Semiconductor and other established foundries,” said the AFP.

Additionally, its partner AMD is involved in a legal battle with Intel Corp for an alleged breach of a 2001 patent cross-licensing agreement.

"Intel believes that GlobalFoundries is not a subsidiary under terms of that agreement and so can't be licensed under its terms to manufacture products that use Intel intellectual property," Shane Rau, a research director with industry consultancy IDC, told AFP.

"That needs to be worked out."

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