GlobalFoundries invests billions for new chip plant in Singapore, global expansion

24, Jun. 2021

U.S. semiconductor giant GlobalFoundries will invest over $4 billion in a new plant at its Singapore campus, increasing its total capacity to about 1.5 million wafers a year. (Photo: GlobalFoundries)
U.S. semiconductor giant GlobalFoundries will invest over $4 billion in a new plant at its Singapore campus, increasing its total capacity to about 1.5 million wafers a year. (Photo: GlobalFoundries)

By Celine Chen

SINGAPORE, NNA - GlobalFoundries (GF), one of the largest semiconductor foundries in the world, is expanding its global operations and building a new fab on its Singapore campus as it joins the rush by manufacturers to address the crippling shortages of computer chips.

Being developed in partnership with Singapore's Economic Development Board at a cost of over $4 billion with co-investments from committed customers, the plant will play an integral role in meeting automotive and electronic companies' spiking demand for GF's manufacturing technologies and services.

Announcing the move in a press statement on Tuesday (June 22), the U.S. chip giant noted that the global demand for semiconductors is growing at an unprecedented rate, with worldwide semiconductor revenue projected to increase 2.1 times in the next eight years.

The semiconductor market is set to reach $90.8 billion, advancing at a compound annual growth rate of over 4 percent from 2020 to 2024, according to Technavio Research.

Responding to the robust demand, GF is expanding capacity significantly at all its manufacturing sites in the U.S., Germany and Singapore, starting with the phase-one construction of the new 300mm fab in Singapore.

When operations begin in 2023, it will produce 450,000 wafers a year, increasing the capacity of GF's Singapore campus to approximately 1.5 million units yearly.

GF CEO Tom Caulfield, who expects the tight supply of chips to persist for several years, said, "GF is meeting the challenge of the global semiconductor shortage by accelerating our investments around the world."

The new facility will support the fast-growing end-markets in the automotive, 5G mobility and secure device segments with long-term customer agreements already in place, said Caulfield.

Believed to be the most advanced chip manufacturing facility in Singapore, it will further enhance GF's ability to provide its feature-rich RF (radio frequency), analog power, and non-volatile memory solutions.

Located in Woodlands in the north of the city-state, the new fab will have 3,000 square meters of cleanroom space and will create 1,000 high-value jobs such as technicians and engineers.

Caulfield added, "Working in close collaboration with our customers and the Government of Singapore is a recipe for success that we are pioneering here and looking forward to replicating in the U.S and Europe."

Owned by the United Arab Emirates' state-owned Mubadala Investment Company, GF will invest $2 billion to expand operations in the U.S. and Germany.

Serving more than 250 customers worldwide, GF is collaborating with them as well as regional governments to invest in the expansion of its global operations to help correct the demand-supply imbalance which is expected to continue in the next several years.

Beh Swan Gin, chairman of the Economic Development Board, said Singapore is committed to partnering industry leaders such as GF to address the global demand for semiconductors, especially in growth areas such as artificial intelligence and 5G.

Singapore plans to grow its manufacturing sector by 50 percent by 2030, with the semiconductor segment featuring strongly in the goal, said S. Iswaran, the country's transport minister and minister-in-charge of trade relations, who took part in the virtual groundbreaking ceremony of the GF fab on Tuesday.

He said, "The new Singapore wafer fab is the kind of investment that Singapore aims to attract and anchor: Highly sophisticated manufacturing, on the frontiers of technology, and helping to position us at critical nodes of global supply chains."

He said Singapore is committed to the long-term growth of the chip industry across the value chain, from chip design, fabrication, assembly, and testing to support activities such as research and development, and regional distribution.

The minister was happy to note that many SMEs in Singapore will benefit from the investment as GF plans to qualify more local suppliers to boost its supply chain resilience.

GlobalFoundries is the largest foundry in Singapore, with five wafer fabs and close to 4,800 employees. It is at the heart of a vibrant electronics industry in Singapore, which contributes about 7 percent of Singapore’s GDP, said Iswaran.

He added, "Many companies, like GlobalFoundries, have their largest manufacturing plants here, and many of the consumer gadgets that we use daily have parts made in Singapore. In fact, I was told that the radio frequency chips that GlobalFoundries makes in Singapore are used in almost every smartphone made today."

On the surge in demand for chips in the last year, Iswaran said, "Foundries worldwide are fully booked for the rest of the year, and the order books for next year are quickly filling up too. This demand is expected to remain strong as growth drivers such as the adoption of electric vehicles, 5G technology, cloud applications and the Internet of Things gain momentum."

Semiconductor manufacturers worldwide are expected to start construction of 19 new high-capacity fabs by the end of this year and break ground on another 10 in 2022, said SEMI association in its quarterly World Fab Forecast report released on Tuesday (June 22).

The global industry association of electronics players believes chip makers will announce additional facilities apart from the 10 slated for 2022. It noted that the demand for chips has accelerated across a wide range of markets such as communications, computing, healthcare, online services and automotive.

Equipment spending for the 29 fabs is expected to surpass $140 billion over the next few years as the industry scrambles to address the global chip shortage, said Ajit Manocha, SEMI president and CEO.

"In the medium and longer term, the fab capacity expansion will help meet projected strong demand for semiconductors stemming from emerging applications such as autonomous vehicles, artificial intelligence, high-performance computing, and 5G to 6G communications," he added.

China and Taiwan will lead the way in building new fabs, starting with eight each, followed by the Americas with six, Europe and Middle East with three, and Japan and Korea with two each.

Plants that produce 300mm wafers will account for most of the new facilities, with the rest being 100mm, 150mm and 200mm facilities. The 29 fabs could produce as many as 2.6 million wafers per month in 200mm equivalents.

Among the 29 fabs, 15 are foundries with capacities ranging from 30,000 to 220,000 wafers of 200mm equivalents a month.

The memory segment will begin construction on four fabs over the two-year span. These facilities will boast higher capacities ranging from 100,000 to 400,000 wafers monthly.

SEMI said, "Of the semiconductor makers beginning construction of new fabs this year, many won't start installing equipment until 2023 since it takes up to two years after ground is broken to reach that phase, though some could begin equipping as soon as the first half of next year."