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Oct. 23, 2021, 2:19 p.m. EDT

GlobalFoundries IPO: 5 things to know about the chip company going public in a semiconductor shortage

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By Wallace Witkowski

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The company said that 61% of its wafers shipped in 2020 were “single-sourced” products, meaning those products that “can only be manufactured with our technology and cannot be manufactured elsewhere without significant customer redesigns,” up from 48% in 2018.

Currently, GlobalFoundries said it had revenue commitments of about $20 billion, with more than $10 billion of that over the period from 2022 through 2023, and more than $2.5 billion in “advanced payments and capacity reservation fees.”

Playing up the non-China angle

Much has been made of the fact that most fab capacity is either in Taiwan or China and that this poses a risk to U.S. national security should there be any outright hostilities. GlobalFoundries touches upon this in the filing, stating that they “are the only U.S.-based semiconductor foundry with a global footprint.”

“We have limited exposure to China relative to our competition, as we do not maintain any fab operations in the country and have a diversified customer base with less than 10% of total sales in 2020 originating in China,” the company said. 

GlobalFoundries competition in the third-party foundry space includes TSMC, South Korea’s Samsung, China’s Semiconductor Manufacturing International Corp. /zigman2/quotes/219534403/delayed CN:688981 -0.76% , and Taiwan’s United Microelectronics Corp. /zigman2/quotes/207234499/composite UMC -3.04%

The company cited Gartner data showing about 72% of silicon wafer sales by revenue went to Taiwan or China, meaning SMIC, TSMC and UMC combined.

“These trends have not only created trade imbalances and disputes, but have also exposed global supply chains to significant risks, including geopolitical risks,” the company said. 

Control is very much offshore, though

In the company’s F-1 filing, the SEC registration statement for foreign filers, GlobalFoundries lists its headquarters in Malta, NY, but the company is incorporated in the Cayman Islands.

While it has a large presence in the U.S., GlobalFoundries is owned in whole by subsidiaries of Mubadala Investment Co., which is Abu Dhabi’s sovereign-wealth fund. Currently, Mubadala’s subsidiaries own all 500 million shares of the company.

Even though there will remain only one class of stock after the offering, the sheer size of Mubadala’s remaining stake — ownership of 89.4% of the shares outstanding — gives it immense voting power.

CN : China: Shanghai
¥ 43.00
-0.33 -0.76%
Volume: 11.69M
Feb. 6, 2023 3:30p
P/E Ratio
Dividend Yield
Market Cap
¥175.36 billion
Rev. per Employee
$ 8.15
-0.26 -3.04%
Volume: 3.27M
Feb. 6, 2023 12:12p
P/E Ratio
Dividend Yield
Market Cap
$21.08 billion
Rev. per Employee

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