GlobalFoundries, the world’s third largest semiconductor foundry, is heading for a US IPO as Abu Dhabi-owned companies increase their investment in US manufacturing sites.
GLOBALFOUNDRIES said in a prospectus filed with the SEC on Monday that Mbadara, the UAE’s national investment fund, has listed its shares on Nasdaq and “will continue to control it following this offer.” .. Mubadara currently holds 100% of the company.
GlobalFoundries is the third largest semiconductor manufacturing market after Taiwan Semiconductor Manufacturing (TSMC) and Samsung. The company has three plants in the United States (two in New York and one in Burlington, Vermont) and one in Germany and Singapore. A New York site in East Fishkill was purchased by ON Semiconductor in 2019 and will be moved from GLOBALFOUNDRIES Books next year.
In April, GlobalFoundries moved its headquarters from Santa Clara, CA to Malta, NY, where state-of-the-art facilities are located. New Yorker-born CEO Tom Colefield said that month he planned to invest $1.4 billion in a chip plant at CNBC in 2021 and could double the investment next year.
Founded in 2008, GLOBALFOUNDRIES, a division of Broadcom, acquired AMD’s manufacturing business in Dresden, Germany, its largest customers being chip makers from Qualcomm, Broadcom, Samsung and AMD. As a group, the top 10 customers account for about three-quarters of revenue.
GlobalFoundries manufactures customer-designed chips for use in contactless payments, battery-powered touch display drivers and many other purposes. Intel announced in March that it plans to become the foundry of other companies in hopes of competing in the market and investing $20 billion in a US factory.
Last year the Covid-19 pandemic saw a surge in demand for electronic devices such as laptops, monitors and game consoles, leading to supply constraints and the need for more capacity. Meanwhile, consumers are moving to electric vehicles with an emphasis on the supply chain.
“While the supply-demand imbalance is expected to improve in the medium term, the semiconductor industry will need to invest significantly more to keep up with demand, and the industry’s overall revenue is expected to double over the next eight to ten years. Will be done,” says GlobalFoundries. I said from that point of view.
GlobalFoundries’ revenue fell 17% last year to $4.85 billion, and the company highlights two main reasons for this decline. GlobalFoundries sold the business in 2019 bringing in $391 million, and more broadly, the company changed the terms and conditions of most customers and changed the way revenue was recognized.
Revenue grew 13% year-over-year to more than $3 billion in the first half of 2021.
Foundry operations are essentially low-margin businesses, with high costs associated with labor, plant operation, and the purchase of equipment and raw materials. In the first half of this year, GlobalFoundries reported gross profit, or revenue remaining after considering cost of sales, about 11%, reversing last year’s negative margin. Six-month net loss narrowed from $534 million to $301 million.
GLOBALFOUNDRIES is headquartered in the United States, but is considered a “foreign issuer” because it was incorporated in the Cayman Islands by Mubadara. This means that the company is exempt from certain NASDAQ rules that apply to U.S. companies, such as independent directors occupying most of the board and seeking shareholder approval for certain share-based compensation agreements. it occurs.
GlobalFoundries did not disclose how much Mubadara plans to raise or will manage after the offering. Whatever the level of ownership, investors need to avoid the risk of buying into an Abu Dhabi-managed company.
Among the risk factors, GlobalFoundries said, “Mubdara’s de facto control will continue following this offer, limiting our ability to change control, or otherwise affect the outcome of major transactions, including our common stock. This will limit the current market for shares.” may affect the price of the brochure.
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