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Aug 18 (Reuters) - GlobalFoundries Inc has filed confidentially with U.S regulators for an initial public offering (IPO) in New York that could value the chipmaker at around $25 billion, people familiar with the matter said on Wednesday.
The move is the clearest sign yet that GlobalFoundries, which is owned by Abu Dhabi’s sovereign wealth fund Mubadala Investment Co (MUDEV.UL), is not eager to accept a potential tie-up with Intel Corp (INTC.O), which the Wall Street Journal reported last month was in talks to acquire the U.S. chipmaker.
GlobalFoundries is working with Morgan Stanley (MS.N), Bank of America Corp (BAC.N), JPMorgan Chase & Co (JPM.N), Citigroup Inc (C.N) and Credit Suisse Group AG (CSGN.S) on the IPO preparations, the sources said.
GlobalFoundries is expected to reveal its IPO filing in October and go public by the end of the year or early next year, depending on how quickly its application is processed by the U.S. Securities and Exchange Commission (SEC), the sources said.
The sources, who requested anonymity because the deliberations are confidential, cautioned that the chipmaker's plans were subject to market conditions and that the timing could change.
Intel has yet to make a formal offer for GlobalFoundries and may not do so, according to the sources. GlobalFoundries is concerned that such a combination would upset some of its key customers that compete with Intel, such as Advanced Micro Devices Inc (AMD.O), the sources said. It could also face intense antitrust scrutiny from U.S. President Joe Biden's administration, which has become more hostile to transformative mergers, the sources added.
Mubadala, GlobalFoundries and Intel declined to comment. The banks, the SEC, Advanced Micro Devices and the White House did not immediately respond to requests for comment.
GlobalFoundries' IPO filing comes amid a boom in capital markets, with other high-profile names such as Robinhood Markets Inc (HOOD.O), Coinbase Global (COIN.O) and Roblox Corp (RBLX.N) already taking advantage with public listings this year.
GlobalFoundries manufactures radio-frequency communications chips for 5G, automotive, and other specialized semiconductors, and has emerged as a major resource for companies such as Intel and Advanced Micro Devices that have outsourced parts of their chip production. It was created when Advanced Micro Devices spun off its manufacturing facilities in 2009 and Mubadala later merged it with Singapore’s Chartered Semiconductor Manufacturing Ltd.
GlobalFoundries CEO Tom Caulfield told Reuters in July the chipmaker was planning to go public in 2022. The chipmaker has pledged to boost output to meet robust demand and announced plans to build a second factory near its Malta, New York, headquarters to address the global chip shortage.
https://www.reuters.com/technology/...les-confidentially-us-ipo-sources-2021-08-18/
* GlobalFoundries chips are found inside smartphones, laptops, automobiles, VR systems, video game consoles, smart speakers, and are also used in artificial intelligence and 5G!
Demand for semiconductors is at an all-time high due to the changed work, entertainment and educational requirements caused by the ongoing pandemic. This has driven up the demand for consumer electronics, but while generally chips for these are manufactured on advanced chip processes such as 14nm and below, chipmakers such as the Taiwan Semiconductor Manufacturing Company (TSMC) have reported that the market for mature processes such as the 28nm node is also witnessing a supply shortfall.
GlobalFoundries does not manufacture semiconductors on leading-edge process nodes such as 5nm, 7nm or 10nm. However, it does make chips with feature sizes as small as 12nm, ensuring that for the time being, it's ahead of China's Semiconductor Manufacturing International Corporation (SMIC). Additionally, while rival companies such as TSMC and Samsung Electronics' semiconductor arm Samsung Foundry use the latest chipmaking machines, GlobalFoundries is yet to incorporate them in its facilities.
The current chip fabrication landscape has three major players, with U.S. chip giant Intel Corporation joining TSMC and Samsung, capable of manufacturing the latest products. GlobalFoundries' entry in this arena will require substantial investment, and funds generated through an IPO might end up serving this purpose.
The move is the clearest sign yet that GlobalFoundries, which is owned by Abu Dhabi’s sovereign wealth fund Mubadala Investment Co (MUDEV.UL), is not eager to accept a potential tie-up with Intel Corp (INTC.O), which the Wall Street Journal reported last month was in talks to acquire the U.S. chipmaker.
GlobalFoundries is working with Morgan Stanley (MS.N), Bank of America Corp (BAC.N), JPMorgan Chase & Co (JPM.N), Citigroup Inc (C.N) and Credit Suisse Group AG (CSGN.S) on the IPO preparations, the sources said.
GlobalFoundries is expected to reveal its IPO filing in October and go public by the end of the year or early next year, depending on how quickly its application is processed by the U.S. Securities and Exchange Commission (SEC), the sources said.
The sources, who requested anonymity because the deliberations are confidential, cautioned that the chipmaker's plans were subject to market conditions and that the timing could change.
Intel has yet to make a formal offer for GlobalFoundries and may not do so, according to the sources. GlobalFoundries is concerned that such a combination would upset some of its key customers that compete with Intel, such as Advanced Micro Devices Inc (AMD.O), the sources said. It could also face intense antitrust scrutiny from U.S. President Joe Biden's administration, which has become more hostile to transformative mergers, the sources added.
Mubadala, GlobalFoundries and Intel declined to comment. The banks, the SEC, Advanced Micro Devices and the White House did not immediately respond to requests for comment.
GlobalFoundries' IPO filing comes amid a boom in capital markets, with other high-profile names such as Robinhood Markets Inc (HOOD.O), Coinbase Global (COIN.O) and Roblox Corp (RBLX.N) already taking advantage with public listings this year.
GlobalFoundries manufactures radio-frequency communications chips for 5G, automotive, and other specialized semiconductors, and has emerged as a major resource for companies such as Intel and Advanced Micro Devices that have outsourced parts of their chip production. It was created when Advanced Micro Devices spun off its manufacturing facilities in 2009 and Mubadala later merged it with Singapore’s Chartered Semiconductor Manufacturing Ltd.
GlobalFoundries CEO Tom Caulfield told Reuters in July the chipmaker was planning to go public in 2022. The chipmaker has pledged to boost output to meet robust demand and announced plans to build a second factory near its Malta, New York, headquarters to address the global chip shortage.
https://www.reuters.com/technology/...les-confidentially-us-ipo-sources-2021-08-18/
* GlobalFoundries chips are found inside smartphones, laptops, automobiles, VR systems, video game consoles, smart speakers, and are also used in artificial intelligence and 5G!
Demand for semiconductors is at an all-time high due to the changed work, entertainment and educational requirements caused by the ongoing pandemic. This has driven up the demand for consumer electronics, but while generally chips for these are manufactured on advanced chip processes such as 14nm and below, chipmakers such as the Taiwan Semiconductor Manufacturing Company (TSMC) have reported that the market for mature processes such as the 28nm node is also witnessing a supply shortfall.
GlobalFoundries does not manufacture semiconductors on leading-edge process nodes such as 5nm, 7nm or 10nm. However, it does make chips with feature sizes as small as 12nm, ensuring that for the time being, it's ahead of China's Semiconductor Manufacturing International Corporation (SMIC). Additionally, while rival companies such as TSMC and Samsung Electronics' semiconductor arm Samsung Foundry use the latest chipmaking machines, GlobalFoundries is yet to incorporate them in its facilities.
The current chip fabrication landscape has three major players, with U.S. chip giant Intel Corporation joining TSMC and Samsung, capable of manufacturing the latest products. GlobalFoundries' entry in this arena will require substantial investment, and funds generated through an IPO might end up serving this purpose.
