ATIC set to buy rest of Globalfoundries

Government-owned company aims to acquire 34.2 per cent stake in chip maker from its US counterpart, AMD.

Regulatory filings made recently in Germany reveal Abu Dhabi investment company's ambition to control chip maker.

The Abu Dhabi-based Advanced Technology Investment Company (ATIC) is poised to buy outright Globalfoundries, one of the biggest customised microchip makers in the world, from its US counterpart Advanced Micro Devices (AMD), according to a company filing. ATIC already owned 65.8 per cent of the company and now plans to buy the remaining shares.

Globalfoundries has embarked on an aggressive expansion programme since it was formed in March last year, with the purchase of Singapore's Chartered Semiconductor for S$5.6 billion (Dh14.64bn) in September and recently signed accords with the US chip designer Qualcomm and the Korean Semiconductor Industry Association. ATIC, an investment firm owned by the Abu Dhabi Government, bought the 65.8 per cent stake in Globalfoundries last March for $2.1bn. Of that, $700 million went directly to AMD, which holds the remaining stake. At that time, Globalfoundries was valued at $3.19bn.

Following the acquisition of Chartered Semiconductor, Globalfoundries is now the second-largest customised chip maker in the world, with revenues of $2.14bn last year. Representatives of AMD could not be contacted. A Globalfoundries spokesman declined to comment. ATIC filed an application with the German cartel office on January 12, according to the office's website. "This action is simply consistent with the long-announced plan for AMD to gradually become fabless, which was one of the key strategies behind the creation of Globalfoundries," said the ATIC spokesman Brian Lott.

"Fabless" is the industry term used to describe a semiconductor company that does not make its own microchips, but instead outsources production to another company, such as Globalfoundries. Mr Ajami said recently that Globalfoundries would double its revenue and market share within the next three years as it tapped into the booming smartphone and graphic chip markets. The chip maker has a combined market share of 16.7 per cent, the technology consultancy iSuppli reported.

The Abu Dhabi Government has committed $10bn over four years for its high-tech aspirations with ATIC. About $6bn has already been spent to set up Globalfoundries and buy Chartered Semiconductor, leaving the remainder to be used for product development and the construction of a new foundry in Abu Dhabi, which is expected to start in 2012. Globalfoundries has more than 6,000 employees and plans to hire additional staff. It maintains operations at Dresden, in Germany, and Singapore, with additional facilities being built in New York state. A semiconductor foundry is expected to be built in Abu Dhabi in 2015.

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