Abu Dhabi microchip maker eyes $4.5bn in revenues

Globalfoundries, the semiconductor manufacturer owned by Abu Dhabi's Atic, is to consider an initial public offering as it looks to become profitable by 2015.

Dresden, Germany - July 19, 2010 - An engineer on the floor of one of several clean rooms at GLOBALFOUNDRIES Fab 1in Dresden, Germany, July 19, 2010. (Photo by Jeff Topping/The National)
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GlobalFoundries, the microchip maker owned by the Abu Dhabi-based Advanced Technology Investment Company (Atic), will consider an initial public offering in 2015, when it expects to reach profitability.
Ibrahim Ajami, the chief executive of Atic, also confirmed reports that GlobalFoundries was expected to make US$4.5 billion (Dh16.52bn) in revenues this year.
A public listing would depend on GlobalFoundries becoming profitable, which Mr Ajami said he expected to happen in 2015.
"It depends on what is right, whether to IPO or continue to hold on to the asset and grow it or explore other investments in the industry," said Mr Ajami. "Our current focus continues to be on execution and putting the company on the map, move towards profitability and sustainability and then we will assess our options."
Revenue of $4.5bn equals growth of 31 per cent over last year, a pace that would establish the company as the world's fastest-growing chip firm. GlobalFoundries recorded $3.48bn in revenue last year, according to industry estimates.
It is the first time GlobalFoundries has made it into the top 20 among foundries and semiconductor companies, coming in at 15th place.
"That is an accurate reflection of our operating and financial performance in 2012," said Mr Ajami. "GlobalFoundries made it to the top 20, the growth figures are up there with Qualcomm, which is quite an impressive growth for the year and for our performance."
Qualcomm is currently the market leader in the mobile chip industry, with revenue growth projected for 30 per cent this year to reach $12.8bn.
"The global economic environment has been challenging. The semiconductor industry has been quite slow, but we continue to drive very hard with our strategy and we plan to grow just as high as we did this year. We do not aspire to grow slowly," said Mr Ajami.
Much of this growth has come from surging demand for silicon chips used to power smartphones and tablet devices.
This month, Ajit Manocha, the chief executive of GlobalFoundries, outlined a 15 per cent growth in overall capacity for its advanced microchips.
Capacity output for the company's 32 nanometre (nm) and 28nm nodes, which denote industry benchmarks for some of the fastest microprocessors in the industry, grew 40 per cent year-on-year.
"We will keep driving very hard. This is the first year we have proven we have the right strategy. There are lots of changes happening, significant changes. Better dynamics are evolving and structures are changing." said Mr Ajami.
The opening of the $5bn greenfield fabrication plant in New York that went online earlier this year, and which joined the company's two other facilities in Singapore and Germany, has helped to push sales.
Plans to open an Abu Dhabi fabrication plant are still on hold, with no clear time frame for when construction will begin. Plans originally were for the plant to be completed by 2015.
"We continue to investigate on the ground. If GlobalFoundries continues the way it has, we will reassess our plans," said Mr Ajami.
Atic is wholly owned by Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, and was founded to diversify the emirate's economy and create jobs.
Atic founded GlobalFoundries with the US-based semiconductor company AMD in 2009. Earlier this year, Atic bought out AMD's shares in GlobalFoundries, while Mubadala still retains a 19.4 per cent stake in AMD.
AMD continues to be GlobalFoundries's biggest customer, although the industry group IC Insights predicts a 17 per cent decline in revenues this year for the firm.
Intel is the world's biggest chip manufacturer, followed by Samsung. Both, however, are believed to have suffered falling sales. IC Insights forecasts a 2 per cent decline in sales for the global semiconductor industry this year.