GlobalFoundries owner preparing $20 billion initial public offering

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GlobalFoundries weighing US production capacity increase options.
Image: GlobalFoundries

Mubadala Investment Company, the owner of GlobalFoundries, intends to take the contract chipmaker public with an initial offering worth around $20 billion.

CEO Thomas Caulfield recently said Mubadala could launch an IPO in the first half of 2022 or earlier.

The world’s third-largest pure-play foundry announced plans to spend $1.4 billion to expand its production capacity last month.

Why Mubadala Wants to Take GlobalFoundries Public

According to Bloomberg, Mubadala is still in the early stages of preparing its GlobalFoundries IPO. The Abu Dhabi sovereign wealth fund had not selected an underwriter for the project. The group is also engaged in discussions with its financial devices regarding the multibillion-dollar deal.

However, the semiconductor manufacturer’s evolution into a publicly traded enterprise is inevitable.

Mubadala established the firm after purchasing Advanced Micro Devices’ (AMD) manufacturing resources in 2009. Since then, the company has built itself into a leading semiconductor fabricator. It counts Broadcom, Qualcomm, and STMicroelectronics among its clients and generated an estimated $6.64 billion in revenue in 2019.

In addition, GlobalFoundries experienced a massive spike in orders during the worldwide digitalization boom that followed the coronavirus outbreak.

The firm stepped up to provide its clients with the electronic parts necessary to facilitate the widespread remote living transition. It also won a contract with the U.S. Department of Defense to make components for the American military. Caulfield noted recent interest in its services had led to fabs being 100 percent booked.

That surge in demand prompted the company to build out its production capacity in Europe, Asia, and the United States. The development likely played a big part in Mubadala’s decision to move up the GlobalFoundries IPO. The fund planned to take the chipmaker public in late 2022 or early 2023 before the digital transformation trend began.

How GlobalFoundries can Benefit from Going Public

Although the world has become a very different place since COVID-19 emerged, the post-pandemic boom will diminish over time. However, GlobalFoundries is positioned not just to thrive but achieve long-term growth once it goes public.

The firm’s rivals, Samsung and TSMC, have pegged their future success on continually expanding their technological sophistication. The South Korean conglomerate plans to spend $116 billion to purchase leading-edge fabrication tools and developing new manufacturing technologies. And the Taiwanese company wants to invest $100 billion in building state-of-the-art fabs in its home country and the U.S.

By contrast, GlobalFoundries is pursuing priorities that fall outside building a more complicated and expensive mousetrap.

Right now, it is bolstering its production capacity to meet the need for power management ICs and touch display drivers. Its focus on making non-SoC parts will let it serve a wide range of customers in the public and private sectors.

For example, the company’s development of 45nm silicon-on-insulator components helped it land a Defense Department contract to produce specialized chips. It can also manufacture items with 5G compatibility for electronics OEMs and advanced automotive solutions for carmakers.

If Mubadala can realize its $20 billion IPO ambitions, GlobalFoundries will become a much larger and more multifaceted provider. In the hyper-connected 21st century marketplace, those capabilities will make its services highly sought after.

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