Globalfoundries gets aggressive

Globalfoundaries has embarked on an "aggressive" strategy with the customers it inherited from its purchase of Chartered Semiconductor, as the computer chip maker looks to win market share from its Taiwanese rivals. The maker of custom chips was created in March though a joint venture of the Advanced Technology Investment Company (ATIC), the investment firm fully owned by the Abu Dhabi Government, and Advanced Micro Devices of the US. The deal is seen as providing it with the economies of scale in making chips that is seen as essential for success.
"We are launching initiatives to make our cost structure very efficient. The implication of that is that we're going to be much more aggressive with our customers in terms of planning and specific relationships," said Ibrahim Ajami, the chief executive of ATIC. Globalfoundries said yesterday that it had officially integrated its operations with Chartered's under the Globalfoundries brand. "This new company has an incredible opportunity in front of us to not just offer an alternative, but become the preferred supplier for many of the world's top chip design companies," said Chia Song Hwee, the chief operating officer of Globalfoundries.
Digitimes, a Taiwanese business newspaper, cited unnamed sources as saying that Globalfoundries had dropped the price for high-end manufacturing processes by up to 50 per cent. Mr Ajami declined to comment on the report, saying that its services are offered at competitive prices. "Market price is the market price, that's not going to change," he said. "We just have to be competitive when we go out to our customers."
Globalfoundries will inherit about 150 customers following its acquisition of Singapore's Chartered Semiconductor for S$5.6 billion (Dh14.8bn), and it plans to speak with each of them this year to highlight its increased production capacity and advanced manufacturing scale, Mr Ajami said. Last week, Globalfoundries announced that it had signed a deal to produce chips for Qualcomm, the largest semiconductor design company in the world. It also gained relationships with Microsoft, Broadcom, Texas Instruments, IBM and STMicroelectronics through Chartered.
Globalfoundries is the second-largest maker of custom chips with an estimated market share of 16.7 per cent, the technology consultancy iSuppli reported. Taiwan Semiconductor Manufacturing Company controls a leading 47.7 per cent share of the market, while United Microelectronics Corporation (UMC) has about 14.6 per cent. Mr Ajami also declined to comment on speculation that ATIC could buy a stake in UMC, calling it "speculation", but noted that "as an investment company, you always have to be open-minded".
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