Globalfoundries aims to double its capital spending this year to US$5.4 billion (Dh19.83bn), as the microchip manufacturer moves towards becoming the world's top semiconductor foundry.
The company is controlled by Advanced Technology Investment Company (ATIC), an investment firm owned by the Abu Dhabi Government through an 86 per cent stake. It manufactures silicon wafers that are used in microchips and installed in smartphones and computers.
Ibrahim Ajami, the chief executive of ATIC, said the boost in spending shows Abu Dhabi is committed to the long-term development of Globalfoundries as it competes in a fast-moving industry. "We've always said that we have to invest in our future and it's going to require sustained and consistent investment. Next year is shaping up to be very important for us," Mr Ajami said.
"This is disciplined investing to secure our future and to invest in our capabilities. It will also ensure that we are a preferred supplier for customers."
The company is the third-largest semiconductor foundry in the world by revenue behind two Taiwanese firms, Taiwan Semiconductor Manufacturing Corporation (TSMC) and United Microelectronics. It is expected to move into the second spot this year.
Its increased investment will catapult it into one of the world's largest capital spenders in the semiconductor industry behind TSMC and Samsung Electronics, which have committed $5.9bn and $10bn this year respectively.
Globalfoundries plans to invest its increased capital across a variety of its units in Germany, Singapore, New York and Abu Dhabi, the company said in a statement.
Its facility in Dresden in in the midst of significant capacity expansion while its New York foundry is in the initial stages of being fitted out for tooling equipment. Furthermore, Globalfoundries' Singaporean facility, which it acquired in 2009 from Chartered Semiconductor for S$5.6bn (Dh14.64bn), will expand its capacity for 200 mm-sized silicon wafers that will be engineered to make microchips for state-of-the-art tablets. The company will also begin the planning stages to build its Abu Dhabi foundry, scheduled to be operational around 2015.
"We are taking the initial steps in the programming for our Abu Dhabi cluster to ensure we have the necessary plans in place for the people, infrastructure and technology to support our future operations in the region. We hope to share more details of our plans later this year," said Bob Krakauer, the chief financial officer of Globalfoundries. ATIC and Globalfoundries plans to build a $6bn microchip foundry near Masdar City that should contribute up to $4bn to the capital's economy and create as many as 6,000 jobs over the next 10 years, industry officials said.
The semiconductor industry was estimated to be worth about $300.3bn last year, according to Gartner, a technology research company. A number of industry analysts forecast that the semiconductor sector will grow by about 5 per cent this year and between 2 to 8 per cent next year as consumer demand slows.
Globalfoundries is a private company and does not have to report financial figures.
However, executives said the firm posted revenues of about $3.5bn last year and is forecast will outperform the global semiconductor industry next year.
Jon Carvill, the vice president of global communications for Globalfoundries, said the boost in funding will come from the company's existing cash flow as well as from ATIC.
"The relationship between ATIC and AMD works where AMD has the ability to match [ATIC's investment] and they've chose not to at this point in time," Mr Carvill said.
Meanwhile, Mr Carvill declined to comment on reports that the company has distributed the tender documents for its upcoming Abu Dhabi foundry to a consortium of construction firms which is due for bidding on January 15.
