GlobalFoundies Inc., a New York-based semiconductor maker, is keen to make an initial public offering (IPO) to sell shares to retail investors. The company is working to reach an agreement with Morgan Stanley, which will see GlobalFoundries as $ 30 billion after publicly listing its shares, Bloomberg reports. However, a single source has been quoted on the subject of the publication and warned that discussions between the agency and the investment bank are not final.
GlobalFoundries’ public listing will bring another U.S. chipmaker to the stock market.
Whispers have circulated since the beginning of this year, and the Bloomberg report is not a rare public report. Representatives of GlobalFoundries declined to comment, and Morgan Stanley said no comment had been made in his favour.
Demand for semiconductors is at an all-time high due to the changing work, recreation, and educational needs caused by the ongoing epidemic. This has increased the demand for consumer electronics, but usually, when chips for these are manufactured in advanced chip processes such as 14nm and below, chipmakers such as the Taiwan Semiconductor Manufacturing Company (TSMC) report that the market for mature processes such as 28nm node supply is declining.
Globalfoundries do not produce semiconductors at the top process nodes such as 5nm, 7nm, or 10nm. However, it manufactures chips featuring sizes as small as 12nm, confirming that for the time being, it is ahead of China’s Semiconductor Manufacturing International Corporation (SMIC). Moreover, while rival companies such as TSMC and Samsung Electronics ’semiconductor arm Samsung Foundry use the latest chipmaking machines, global foundries have yet to incorporate them into their advantages.
This decision is not surprising because newer machines, which use ultraviolet light with a shorter wavelength, are typically used to produce 7nm process nodes and semiconductors from the bottom. Although GlobalFoundries does not make 7nm chips, it has node plans to cancel them in 2018.
The reasons behind the decision were not provided at the time, but the lack of 7nm node subscribers was believed to be effective in this decision. Adequate investment is required for chip manufacturing, and customers often work with fabricators in this field. This ensures that the latter has a great return on their investment and can control their semiconductor supplies.
California-based chip designer Advnced Micro Devices, Inc. (AMD) Santa Clara changed its chip deal earlier this month. By filing with the Securities and Exchange Commission, AMD announced that it would remove the ‘exclusivity clause’ from the contract with the chipmaker. This, in fact, will ensure that AMD will be able to source its chips from other suppliers to deliver them. In addition, the chip designer also agreed to stricter payment terms, as global foundries show greed for prepayment for some of its orders.
If GlobalFoundries decides to go public, it must inform investors about the demand for mature process nodes and develop the latest technologies. The current chip fabrication landscape has three major players; the US chip giant Intel Corporation joined TSMC and Samsung to create the latest products. An adequate investment will be required for GlobalFoundries to enter this arena, and funds raised through IPOs can serve this purpose.
