The acquisition and the now announced integration of Chartered Semiconductor into Globalfoundries has produced a foundry with both scale but importantly technology leadership that has every chance of competing with industry leader, TSMC. With US$10 billion of future investments planned and a roadmap that already challenges for sector leadership, having acquired the expertise and infrastructure of being a pure-play foundry, its pace of growth and influence can now begin.
The combined company now employs approximately 10,000 people with 2009 revenues to date in excess of US$2 billion, generated from a customer base of more than 150.
"The entire premise of the foundry business is changing," noted Dan Hutcheson, CEO of VLSI Research. "Foundry customers have made it clear that they are looking for deep collaboration with their foundry partners as opposed to a contract manufacturing service. With its history as part of a top Integrated Device Manufacturer (IDM) operating at the leading edge of technology, Globalfoundries is well positioned to drive fundamental transformation in the foundry business model."
The transformation begins not with offering the leading process technology, nor significant production capacity. Rather, it starts or continues with further sector consolidation and attempts to become the market leader by revenue and surpass TSMC.
In an interview with Tom Sonderman, Vice President of Manufacturing Systems and Technology at Globalfoundries, to discuss the integration news and developments, the VP acknowledged that a strategic goal of the foundry was to become the market leader.
“We certainly want to be in that position, whether this is achieved organically or includes further acquisitions,” remarked Sonderman.
Although not prepared to discuss this aspect further, the foundry sector is still overpopulated and targeting further consolidation when the market has yet to fully bounce back from the downturn of 2009, would seem an obvious opportunistic business move.
There are only two foundries that could push Globalfoundries to a leadership position. However, China-based SMIC is by far the weakest from a financial position and with TSMC’s stake in the company after its IP legal victory, looks to be a poorer candidate than a possible acquisition of UMC.
Rumours have already started, however such a move would have to be bold and made soon. For now, the comments made by Globalfoundries COO in a statement announcing the integration of Chartered, would seem to sum up well the positioning message the foundry is currently following;
"Until now, the world's largest fabless, fablite and integrated manufacturers have had no real alternative for an end-to-end manufacturing partner. This new company has an incredible opportunity in front of us to not just offer an alternative, but become the preferred supplier for many of the world's top chip design companies. With advanced technology leadership, an aggressive capacity roadmap and a robust set of mainstream technologies and foundry services we are well equipped to compete and win against any other foundry in the industry," concluded Chia Song Hwee.