Why is GlobalFoundries committing to $1 billion upgrades?

GlobalFoundries has committed to building a new fab in Malta and expanding its current capacity, in an attempt to address the chip shortage.

On Monday, 19 July 2021, GlobalFoundries announced several ways it plans to address the chip shortage. One of these is building a new semiconductor fabrication plant (fab) in Malta, New York and reportedly adding $1 billion in extra capacity to the current Malta facility.

According to GlobalFoundries, the new business model will include investments that address the chip shortage at its existing Fab 8 facility. The chip shortage is a result of the COVID-19 pandemic, which reportedly increased demand for personal electronics such as cellphones and laptops. According to reports, the production of chips could not keep up with the growing demand.

Furthermore, GlobalFoundries will reportedly be looking towards the innovative features that shape many of the diverse chips that people use today. The portfolio for diverse chips reportedly includes 5G radio frequency, silicon photonics, internet of things (IoT) and automotive.

Moreover, the $1 billion upgrades will be for new equipment that will reportedly bring the existing Malta shell to its full capacity. The investment will also bring an additional 150,000 wafers per year within the company’s existing fab, and this will reportedly help to address the global chip shortage quicker.

Additionally, alongside the $1 billion investment in Fab 8, GlobalFoundries plans to fund a new facility through both private and public partnerships. According to the company, the new capacity will serve the growing demand for secure chips that are needed in high growth markets.

Lastly, GlobalFoundries is reportedly trying to build on the momentum of its $4 billion Singapore fab commitment, which is expected to deliver an increment of 450,000 wafers per year. Tom Caulfield, the Chief Executive Officer (CEO) of GlobalFoundries, said the company is expecting to grow more in the next decade than it did in the past 50 years.