GlobalFoundries to invest US$4b into Singapore expansion

GlobalFoundries to invest US$4b into Singapore expansion. Source: AFP PHOTO / POOL / ARNO BURGI (Photo by ARNO BURGI / POOL / AFP)

GlobalFoundries to invest US$ 4 bil into Singapore expansion

  • GlobalFoundries plans to build a new fabrication plant in Singapore to meet the unprecedented global demand for chips.
  • The new facility will be developed in partnership with the Singapore Economic Development Board and with co-investments from committed customers, the company said.

The semiconductor chip crisis is showing no signs of ending. It has, if anything, been impacting supply chains in many industries for months. The upside of this catastrophe, however, is the stimulation of new ideas, technologies, and efforts to help speed up recovery from the shortage. The latest concerted effort between semiconductor manufacturer GlobalFoundries and Singapore is one for the books.

The US-based manufacturer—which is also the third-largest contract chipmaker in the world—is investing US$4 billion to build a new production site in Singapore, where the company currently manufactures 40% of its chips. The investment is the latest bid by a leader in the semiconductor industry to ease the chip shortage throttling automakers and electronics manufacturers worldwide.

CEO Tom Caulfield during a virtual groundbreaking ceremony for the new fabrication plant earlier this week said, “GlobalFoundries is meeting the challenge of the global semiconductor shortage by accelerating our investments around the world. The fab is scheduled to begin production in 2023 and will primarily serve “automotive, 5G mobility, and secure device industries.”

The new facility will be developed in partnership with the Singapore Economic Development Board (EDB) and with co-investments from committed customers, GlobalFoundries said. Although Singapore doesn’t have much of an automotive industry, the city-state’s electronics manufacturing sector which accounts for 7% of total GDP, is heavily dependent on semiconductor supplies. 

“The semiconductor industry is a key pillar of Singapore’s manufacturing sector, and GlobalFoundries’ new fab investment is testament to Singapore’s attractiveness as a global node for advanced manufacturing and innovation,” said chairman of EDB Beh Swan Gin. Beh also said that the new fab will help GlobalFoundries’ customers “strengthen the resilience” of their supply chains.

In short, the company’s larger investment in Singapore — where GlobalFoundries has its oldest manufacturing sites — shows Asia’s enduring appeal as a semiconductor powerhouse. The new facility, located at the Woodlands Wafer Fab Park, will expand its capacity by 450,000 wafers a year. The first production wafer is expected to be rolled out in the first quarter of 2023. The new fab is expected to create 1,000 high-value jobs, including technicians and engineers, who will have access to an additional 23,000 square meters of cleanroom space and new administrative offices. 

Even its rivals, from Taiwan Semiconductor Manufacturing Co. to Samsung Electronics Co., are expanding their capacities to help address a persistent shortfall of chips for everything from cars to smartphones. GlobalFoundries — which is prepping a US initial public offering that could value the chipmaker at US$ 30 billion — said it will also devote US$ 1 billion apiece to building out its Dresden, Germany, and US sites.

Although the decision by GlobalFoundries coincides with debate in the US and Europe about whether the high concentration of global chipmaking capacity in Asia carries national security implications, Caulfield said he was expanding in Singapore first because that’s where the company’s capacity is stretched.