Advanced Technology Investment Company, the main owner of contract chip maker Globalfoundries, said that it would not start construction of its new megafab in Abu Dhabi. The company blames uncertain global economic outlook for the delay, however, major problems with its main customer Advanced Micro Devices as well as imminent transition to 450mm wafers might have also play a role in the decision.

"We will not be engaging in any ground breaking in Abu Dhabi in 2012. Against the backdrop of a global economy still very volatile, we took a decision from a board level that we should not have another facility right now, but we should assess what happens before the end of 2012 on our growth strategy," said Ibrahim Ajami, the chief executive officer of ATIC, in an interview with The National.

Globalfoundries planned to start construction of the first ever semiconductor fab in Abu Dhabi in 2012 and intended to start production of chips at the facility in 2015. The factory would significantly increase Globalfoundries' production capacity and would join state-of-the-art fabs in Dresden, Germany and New York, USA.

Although officially ATIC blames overall economic uncertainties, there are two more more substantial reasons for Globalfoundries to reconsider its expansion plans:

• Recently AMD, the main customer of Globalfoundries, decided to cancel two accelerated processing units (APUs) that were supposed to be made at GF's leading-edge 28nm HKMG process technology. Besides, the company also seems to be losing interest in making its graphics processing units (GPUs) at Globalfoundries at 28nm node. Without substantial orders from AMD, capacity utilization of Globalfoundries will be uncertain and therefore there will be no need in expansion of capacities.
• The semiconductor manufacturing industry is approaching a milestone of transition to 450mm wafers. At present prospects of 450mm wafers are completely unclear, but there is an industry-wide consensus that the transition is inevitable. Perhaps, companies like Globalfoundries are unsure now whether they need to build a 300mm fab, a 450mm-ready fab or a 450mm fab. As a result, they reconsider their expansion plans.

Ibrahim Ajami said Globalfoundries and ATIC and Globalfoundries were still committed to Abu Dhabi, and the companies would decide towards the end of 2012 when they would restart plans to construct a plant in the emirate.

Tags: Globalfoundries, 300mm, 450mm, 28nm, 20nm, 16nm, 14nm, 12nm, Semiconductor, Business, AMD