Chip giant Global Foundries spends US$5.4 billion to build a new factory in Singapore, adding 1,000 high-value jobs

Semiconductor manufacturer Global Foundries is increasing its production capacity in Singapore with a huge investment of US$4 billion (S$5.4 billion). The company said on Tuesday (June 22) that it has added a new wafer fab or manufacturing plant in the face of global chip shortages and is expected to add about 1,000 jobs. About 95% of these jobs will be high-value positions, such as equipment technicians, process technicians, and engineers.

GlobalFoundries' investment is in cooperation with Singapore's Economic Development Board (EDB) and co-invested by customers. Its investment commitment here is one of the largest investments in recent years, and the Republic has attracted investment from multinational companies in the electronics, chemical and pharmaceutical industries. The new fab under construction will be located in its existing Woodlands campus and is expected to start production in January 2023. It is expected to reach full capacity in early 2024.

The fully automated fab will have approximately 250,000 square feet of clean room space and will add approximately one-third of the company’s wafer production capacity to its Singapore business, bringing its production capacity to approximately 1.5 million wafers per year. Singapore accounts for approximately one-third of GlobalFoundries’ revenue and serves approximately 200 customers worldwide. The manufacturer has approximately 4,800 employees here, accounting for approximately one-third of its global workforce.

Its CEO Tom Caulfield said: "Our new factory in Singapore will support the fast-growing end market in the automotive, 5G mobile and security equipment sectors, and we have signed a long-term customer agreement." He pointed out at a virtual press conference on Tuesday that his expansion in Singapore and plans to invest more than US$1 billion each in manufacturing bases in Germany and the United States are proceeding at the same time.

The US$6 billion promised in the next few years is based on the planned investment of US$1.4 billion in 2021 to increase factory output. Dr. Caulfield said that the company is accelerating its global investment to meet the challenge of global chip shortages, adding that he expects that supply will still exceed demand in the next five to eight years.

He said that it first expanded in Singapore because the factory here has been around for the longest time and has been producing at full capacity. Since the acquisition of Chartered Semiconductor in 2010, GlobalFoundries has five fabs here and has pledged to invest US$12 billion in fixed assets.

Mr. Ang Kay Chai, Senior Vice President and Head of Global Operations, GlobalFoundries, also emphasized the importance of supply security to its operations, and said that the company will more frequently produce duplicate technologies in fabs in different locations. As the chip maker strives to expand its production capacity, global chip shortages continue, and supply exceeds demand, and consumer product prices have risen as a result. Automakers and consumer electronics manufacturers have been hit, leading to production delays and price increases.

On Tuesday, the virtual groundbreaking ceremony of GlobalFoundries Singapore's new plant was witnessed by S. Iswaran, Minister of Transport and Head of Trade Relations, and Khaldoon Khalifa Al Mubarak, Managing Director and Group Chief Executive Officer of Mubadala Investment Corporation. GlobalFoundries is owned by Mubadala Investment Corporation, a national investor in Abu Dhabi. EDB Chairman Beh Swan Gin said that the semiconductor industry is an important pillar of Singapore’s manufacturing industry, and GlobalFoundries’ new fab investment proves Singapore’s attractiveness as a global advanced manufacturing and innovation node.

"This will help GlobalFoundries customers to enhance the resilience of their supply chains and increase our economic vitality by creating good job opportunities for Singaporeans and business opportunities for our local businesses," he added. Mr. Iswaran said that in addition to adding 1,000 jobs, the expansion of GlobalFoundries will also contribute more job opportunities through the supporting ecosystem of suppliers, contractors and service providers. He added that this investment also brings Singapore closer to achieving its goal of 50% growth in manufacturing by 2030.

“GlobalFoundries’ continued growth in Singapore is also based on the strong bilateral relationship between Singapore and Abu Dhabi,” he pointed out, adding that despite the Covid-19 pandemic, the United Arab Emirates remains Singapore’s presence in the Middle East. The largest trading and investment partner. In response to a question about the company's possible initial public offering, Dr. Caulfield said that his valuation of the manufacturer could reach $30 billion.

He added that the company is "focused" on the capabilities needed to grow and create customers.