Bloomberg News

Globalfoundries Will Spend $3 Billion on Factories in 2012

January 18, 2012

(Updates with comments from CEO in fourth paragraph. (For more on the Consumer Electronics Show, see {EXT3 <GO>}.)

Jan. 10 (Bloomberg) -- Globalfoundries Inc., the contract chip manufacturer that was spun off from Advanced Micro Devices Inc. in 2009, plans to spend $3 billion on plants and equipment this year, Chief Executive Officer Ajit Manocha said.

The company spent $8 billion between 2010 and 2011, he said today in an interview at the Consumer Electronics Show in Las Vegas. Most of the money will go toward finishing and equipping a factory being built in upstate New York, he said.

Globalfoundries, which remains AMD’s main source of chip production, is working to boost its capacity and attract other customers. Manocha took over from former AMD executive Doug Grose last year and has replaced about 20 of the company’s top 50 executives.

“The transformation wasn’t going too fast enough until I took over as CEO,” he said. “We’ve shown a great improvement.”

The company has struggled with production shortfalls at its plants in Dresden, Germany -- the heart of its manufacturing when it was part of AMD. Last quarter, AMD missed a sales target after Globalfoundries wasn’t able to supply enough chips.

Singapore Plants

Globalfoundries’ facilities in Singapore, which it acquired in a merger with Chartered Semiconductor Ltd., have fared better, Manocha said.

“We have not missed any of our commitments from Singapore,” Manocha said. “Globalfoundries is not just Dresden.”

In addition to building the new plant in New York state, Globalfoundries plans to add production in Abu Dhabi. The company is majority owned by an investment arm of the Abu Dhabi government -- an arrangement that AMD struck during the spinoff.

Globalfoundries competes against Taiwan Semiconductor Manufacturing Co. and United Microelectronics Corp. in the market for contract manufacturing. They allow companies such as Qualcomm Inc. to farm out their chip production, helping customers focus on design and marketing.

To contact the reporters on this story: Danielle Kucera in San Francisco at dkucera6@bloomberg.net; Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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