The successful IPO of chip maker GlobalFoundries reflects Mubadala Investment Company’s strategy to shift investments towards industries of the future, such as technology, life sciences, mobility and renewables, its chief executive said.
The Malta, New York-headquartered semiconductor manufacturer is set to grow significantly in the coming years, in line with emerging industries and as demand for chips soars, Khaldoon Al Mubarak, chief executive and managing director of Mubadala, said in an exclusive interview with The National in New York on the day of the debut of GlobalFoundries' shares.
The world's third-largest semiconductor manufacturer raised $2.6 billion last week in the US initial public offering and is in a strong strategic position to capitalise on its network across the world in line with emerging industries and growing demand for chips, Mr Al Mubarak said.
The share listing is part of Abu Dhabi’s strategy to move towards sectors that “power the trends shaping tomorrow”.
Mubadala is the majority shareholder of GlobalFoundries.
“We are investing a lot of time and capital in these sectors. We see these areas with many tailwinds … Mubadala is well-positioned to take advantage of these industries and shift away from those with headwinds,” Mr Al Mubarak said.
“We are proud of what GlobalFoundries has accomplished. Now it is very well-positioned and has a diversified platform with assets spreading across [the] US, Germany and Singapore that gives it a unique advantage,” he added. “Results speak for themselves, the valuation that we [GlobalFoundries] have achieved is very good. The company’s capabilities and operational performance have been very strong.”
The IPO of GlobalFoundries gave the company a market value of nearly $26bn. The company's listing is the third largest in the US this year after South Korea's e-commerce company Coupang, which raised $4.5bn and Chinese ride-hailing company DiDi that reaped $4.4bn.
“The IPO is a significant milestone … an important step for GlobalFoundries, for Mubadala as its shareholder and for Abu Dhabi as a shareholder of Mubadala,” Mr Al Mubarak said.
“This is achieved after 12 to 14 years' journey of investing in innovation, believing in a technology and living through the ups and downs but sticking with a conviction in the sector with a strong view where the world is going … The last 12 years are a clear indication of how Mubadala can put a strategy in place and successfully support it with continuous investment.”
Mubadala established GlobalFoundries in March 2009 after buying the chip manufacturing division of Advanced Micro Devices, which was then combined with Singapore’s Chartered Semiconductor. Since then, GlobalFoundries has seen an investment of more than $23bn that helped the company build a global manufacturing footprint with multiple facilities spread across three continents.
GlobalFoundries’ IPO has come at a time when businesses worldwide are dealing with a shortage of semiconductors – a vital component in products from smartphones to cars.
The semiconductor industry is expected to grow to more than $1 trillion by 2030, from about $500bn this year, according to VLSI Research.
Growth is driven by smartphones, notebooks, widespread 5G roll-out, servers, the car industry, smart homes, gaming, wearables and Wi-Fi access points, with increased memory pricing.
“GlobalFoundries’ semiconductors are vital for many of the technologies we rely on every day … the chips in mobile phones, the smart devices in homes and the safety features in cars,” Mr Al Mubarak said.
“I can say that we are in the right place in this business … GlobalFoundries is a company with positive momentum, a business that is well run and the growing demand for semiconductors will further drive and spur the growth.”
GlobalFoundries, which aims to increase its production capacity by nearly 50 per cent in next three years to address the Covid-induced global chip shortage, sold nearly 55 million ordinary shares – representing about 10 per cent of its share capital – in the IPO.
“The IPO positions the company very well for future growth, further expansion and for us as a majority shareholder, this is a great step,” Mr Al Mubarak said.
“We are a committed investor in GlobalFoundries … we have done the heavy lifting over the years to get the company where it is today. Having said that, now I am looking at another 10 years of operations … we are very excited about the future,” he added.
Mr Al Mubarak said the fund expects to be a long-term shareholder in GlobalFoundries for the foreseeable future.
“Our objective is to grow our market share, improve our technology and continue to serve our customers in the most effective ways. We are committed to position it as a global organisation with an efficient and cost-effective supply chain to serve all our global customers.”
The 2009 acquisition by GlobalFoundries of Chartered Semiconductor – the third-largest foundry by revenue at the time – helped the company establish its manufacturing hub in Asia.
In October 2014, it acquired International Business Machines’ microelectronics division with manufacturing facilities in New York and Vermont, in a deal that added to its global footprint.
Currently, the company employs more than 15,000 people globally and serves more than 200 customers worldwide, including the US government.