Mubadala's GlobalFoundries may raise as much as $2.6bn in IPO

The IPO price range is expected to be between $42.00 and $47.00 per share

GlobalFoundries, a semiconductor manufacturer owned by Mubadala Investment Company, may raise as much as $2.6 billion from its initial public offering in the US, as it seeks to tap into a global chip shortage that has derailed production chains.

The IPO price range is expected to be between $42.00 and $47.00 per share, the company said in a filing on Tuesday.

GlobalFoundries will offer 55,000,000 ordinary shares, out of which 33,000,000 will be offered by the semiconductor manufacturer and 22,000,000 shares will be offered by Mubadala.

The company has applied to list its shares on the Nasdaq Global Select Market under the ticker symbol GFS, the statement added.

The IPO comes as the world grapples with a shortage of semiconductors — a vital component used in products from iPhones to cars. The shortage has hobbled the production lines of tech companies and car makers that depend on these chips to operate their sensors and other electronic functions within gadgets.

Global chip sales are forecast to surge 8.4 per cent this year from last year's total of $433bn, according to the Semiconductor Industry Association. This is up from 5.1 per cent growth witnessed in 2020. Industry experts are expecting the chip shortage to persist until 2023.

GlobalFoundries, which filed for an IPO on October 4, is well placed to tap into this boom. Earlier this year, the company said it was co-investing $4bn in a new plant in Singapore to plug the global shortage of semiconductors. The plant will be financed through its own investments and those of government and long-term customers, chief executive Thomas Caulfield said at the time.

The US company is also planning to spend $1bn in both the US and Germany to expand manufacturing capacity over the next two years.

In March, GlobalFoundries said it planned to invest $1.4bn in 2021 to expand its manufacturing capacity across Singapore, Europe and the US.

“Globalfoundries is currently the only global semiconductor manufacturer of scale with a global footprint and we are stepping up and meeting the challenges of the global semiconductor shortage by accelerating our investment — not only in Singapore but around the world,” Mr Caulfield said.

Updated: October 19th 2021, 1:51 PM