Computer chipmaker files documents for IPO
Globalfoundries is reportedly looking for valuation of $25 billion
Globalfoundries reportedly looking for offering that values company at $25 billion.
Computer chipmaker Globalfoundries has filed confidential documents with U.S. securities regulators for an initial public offering that values the company at $25 billion, Reuters reported.
The $25 billion valuation is lower than the $30 billion that chipmaking giant Intel Corp. reportedly is willing to pay to acquire Globalfoundries outright.
Globalfoundries has its headquarters in the Saratoga County town of Malta where it has its Fab 8 manufacturing complex. The campus employs 3,000 people.
A Globalfoundries spokesman declined comment Friday. The IPO is not a surprise: Globalfoundries CEO Tom Caulfield has been talking about plans for an IPO for years and earlier this year said the IPO could take place at the end of 2021 or early 2022. Globalfoundries often gives interviews on major announcements to Reuters in advance of other outlets.
Taking its stock public would give Globalfoundries a major infusion of capital for its ambitious plans to expand Fab 8 and build a new factory in Singapore. The company is also expanding its German facilities.
Reuters said details of the IPO would be made public in October, and the offering would happen by the end of the year.
Companies can choose to file their preliminary IPO plans with the SEC and have them shielded from public view to enable businesses to test the waters without tipping their hand to competitors. The documents are made public two weeks before the IPO is announced. The process was originally designed for small companies but was expanded to be available for most companies in 2017.
An IPO would also give Mubadala Investment Co., the Abu Dhabi investment fund that owns Globalfoundries, a return on its investment in the company, which was spun off from Advanced Micro Devices in 2009 as a so-called foundry that would make chips not only for AMD but also other customers.
Intel, the world's largest chipmaker, has recently jumped into the foundry market, and acquiring Globalfoundries is seen as a way for Intel to jump-start that new business. Intel is also reportedly looking at New York and other states to build a massive manufacturing campus that would have six to eight factories, or fabs.
The Reuters report said that Globalfoundries may rather go public than be acquired by Intel, especially since Intel is a major rival to AMD, which is Globalfoundries' largest customer. The Reuters report also asserted that the Biden administration would likely not look favorably on the combination of Intel and Globalfoundries since it would essentially put all of the U.S. foundry market in the hands of one player.
The Biden administration and U.S. Senate Majority Leader Chuck Schumer have been advocating a $52 billion fund for the chip industry to expand in the U.S. to better compete with China. The funding would help pay for new factories across the U.S. and a new national research and development center that could end up at Albany Nanotech. That plan would work best when the competitive landscape in the industry is strong, although the enormous cost of research in the industry has been driving consolidation.