Chip maker doubles capital amid pandemic
Globalfoundries’ surge reflects global needs, ever-evolving advances Malta
While countless businesses have been on hold or shut down due to the COVID -19 pandemic, computer chip maker Globalfoundries is seeing boom times.
“We’re making a record number of wafers everywhere including Malta,” said Mike Hogan, Globalfoundries’ senior vice president and general manager at the company’s Automotive, Industrial & Multi-market Strategic Business Unit.
“We’re happy that Globalfoundries is healthy enough to double our capital expenditures this year,” he said.
In addition to Globalfoundries’ 3,000-employee Fab 8 plant in Luther Forest, the company has facilities in East Fishkill and Burlington, Vt., as well
as in Singapore and Germany.
The privately held company didn’t disclose how many wafers were made and shipped in 2020 or their value, but Hogan stressed in a recent interview that the company hit a production high and was working at capacity or above to keep up with demand.
Globalfoundries’ success isn’t unusual for the computer industry overall, and part of that is due to the pandemic. With so many people working from home, there has been huge demand for new laptops, as well as smartphones and other electronic devices that keep one both plugged in to the workplace and entertained in off hours.
Some of that boom has been reflected in the rising stock prices of publicly traded microchip makers.
For instance, AMD, which uses some Globalfoundries products for its chips, saw its stock rise from $38 last March to $87.50 on Friday afternoon.
Another big chip maker, Intel, enjoyed a rise from
$49 in March to $55.71 as of Friday.
The Gartner research firm earlier in January reported that worldwide microchip, or semiconductor revenue in 2020 was expected to total $449.8 billion — up 7.3 percent from 2019.
The high demand for chips has led to the possibility that Globalfoundries may expand in Malta. In June, the company, which is owned by the emirate of Abu Dhabi, said it secured an option for 66 acres of undeveloped land adjacent to Fab 8.
Hogan said an expansion was possible, but that would depend heavily on the amount of government support for such a project.
Expanding would likely require the level of support offered when the company first came to Malta, Hogan said.
“We’d certainly have the ability to expand in Malta onsite and to grow that site if need be,” he said.
Hogan said it’s not just the pandemic that drove up demand for microchips.
The onset of 5G technology in smartphones is pushing demand as are worries about tensions with China, which is a
major producer of chips and other hardware.
While the U.S. remains the leader in design and innovation, only 12 percent of the world’s chips are made here.
The global appetite for microchips has hindered some industries, including automakers, who have in recent weeks complained that their production has slowed because they can’t get enough chips.
Cars increasingly rely on microchips for a variety of functions ranging from antilock brakes to infotainment and navigation systems as well as engine controls.
Many of these chips are highly specialized. The move toward electric and an eventual evolution toward self-driving cars will only increase demand, Hogan predicted.
Has the auto chip shortage impacted Malta? Not really, Hogan said, since the chips that are going into today’s models, be they Toyotas, Fords or Teslas, were developed several years ago.
“Malta,” he said, “is working on the things that come next.”