MUBADALA OPTIMISTIC ABOUT CHIP MAKER’S PROSPECTS
▶ GlobalFoundries ‘well positioned to capitalise on emerging industries’
GlobalFoundries is in a strong strategic position to capitalise on its network across the world in line with emerging industries and the growing demand for chips, majority shareholder Mubadala Investment Company has said.
The company, the world’s third-largest semiconductor manufacturer, is set to grow manifold times in the coming years as demand for chips increases, Mubadala chief executive and managing director Khaldoon Al Mubarak said in an interview with The National.
“We are proud of what GlobalFoundries has accomplished. Now it is very well positioned and has a diversified platform with assets spreading across [the] US, Germany and Singapore that give it a unique advantage,” he said.
“Results speak for themselves; the valuation that we [as GlobalFoundries] have achieved is very good. The company’s capabilities and operational performance have been very strong.”
GlobalFoundries raised $2.6 billion in its initial public offering in the US amid strong demand from investors.
This gave it a market value of about $26bn, making it the third-largest listing in the US this year after that of South Korean e-commerce company Coupang, which raised $4.5bn, and the $4.4bn listing of Chinese ride-hailing company DiDi.
“The IPO is a significant milestone … an important step for GlobalFoundries, for Mubadala as its shareholder and for Abu Dhabi as a shareholder of Mubadala,” Mr Al Mubarak said.
“This is achieved after 12 to 14 years’ journey of investing in innovation, believing in a technology and living through the ups and downs, but sticking with a conviction in the sector with a strong view [of] where the world is going …
“The last 12 years are a clear indication of how Mubadala can put a strategy in place and successfully support it with continuous investment.”
Mubadala established GlobalFoundries in March 2009 after buying the manufacturing operations of Advanced Micro Devices, which was then combined with Singapore’s Chartered Semiconductor.
Since then, GlobalFoundries has invested more than $23bn, helping it to build a global manufacturing footprint with several factories across three continents.
The IPO reflects Mubadala’s strategy to shift investments towards industries of the future, such as technology, life sciences, mobility and renewables, Mr Al Mubarak said.
It is a part of Abu Dhabi’s strategy to move towards sectors that “power the trends shaping tomorrow”.
“We are investing a lot of time and capital in these sectors. We see these areas with many tailwinds … Mubadala is well positioned to take advantage of these industries and shift away from those with headwinds,” he said.
GlobalFoundries’ IPO comes at a time when businesses worldwide are dealing with a shortage of semiconductors – a key component used in products from smartphones to cars.
The industry is expected to grow to more than $1 trillion by 2030, from about $500bn this year, said VLSI Research.
“GlobalFoundries’ semiconductors are vital for many of the technologies we rely on every day … the chips in mobile phones, the smart devices in homes and the safety features in cars,” said Mr Al Mubarak.
“I can say that we are in the right place in this business … GlobalFoundries is a company with positive momentum, a business that is well run and the growing demand for semiconductors will further drive and spur the growth.”
GlobalFoundries, which aims to increase its production capacity by about 50 per cent in next three years to address the global chip shortage, sold about 55 million ordinary shares – equal to about 10 per cent of its share capital – in the IPO.
“The IPO positions the company very well for future growth, further expansion and for us, as a majority shareholder, this is a great step,” said Mr Al Mubarak.
“We are a committed investor in GlobalFoundries ... we have done the heavy lifting over the years to get the company where it is today. Having said that, now I am looking at another 10 years of operations ... we are very excited about the future.”
Mr Al Mubarak said the fund expects to be a long-term shareholder in GlobalFoundries in the foreseeable future.
“Our objective is to grow our market share, improve our technology and continue to serve our customers in the most effective ways,” he said.
“We are committed to positioning it as a global organisation with an efficient and cost-effective supply chain to serve all our global customers.”
GlobalFoundries’ 2009 acquisition of Singapore’s Chartered Semiconductor – the third-largest foundry by revenue at the time – helped it to establish its manufacturing centre in Asia.
GlobalFoundries sold about 55 million ordinary shares – equal to about 10 per cent of its share capital – in the IPO