Even though last year Globalfoundries, a maker of semiconductors controlled by Advanced Technology Investment Company and Advanced Micro Devices, said that its potential clients were only leading-edge companies, who create very advanced chips, with the acquisition of Chartered Semiconductor Manufacturing the company has to aim at fables designers of less advanced chips.
At present Globalfoundries wants to capture 30% of the global contract semiconductor manufacturing market in two or three years, according to ATIC. This will automatically boost revenues of the firm, however, it will be pretty hard to compete against traditional players, primarily Taiwan Semiconductor Manufacturing Company as well as United Microelectronics Corp., and will require additional investments.
“Am I setting very aggressive targets? Yes. We need to be a $5 billion company in the next two to three years,” said Ibrahim Ajami, chief executive officer of Advanced Technology Investment, in an interview with Bloomberg news agency.
While the target seems to be aggressive, it is also very logical. At present every factory that can produce advanced chips using leading-edge process technologies costs over $3 billion and it should be constantly improved or new fabs should be built in order to be competitive in terms of volume manufacturing of complex chips. In addition, development of a sophisticated process technology costs hundreds of millions of dollars, or even a billion, of dollars and while the cost is shared between Globalfoundries and other partners in the IBM semi alliance, it is going to increase and fabrication processes are not going to be free.
Unfortunately, it will not be easy for Globalfoundries to reach 30% market share, analysts believe. According to a semiconductor analyst at Polaris Securities, Globalfoundries has about 15% of the foundry market at present, compared with almost 20% for UMC and 50% for TSMC.