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- The Significance of GlobalFoundries Chips in the U.S. Electronics Market
The Significance of GlobalFoundries Chips in the U.S. Electronics Market
Explore why GlobalFoundries chips play a crucial role in powering a multitude of connected devices, despite not being at the cutting edge of technology like some other chip manufacturers. Learn how even a small GlobalFoundries chip can be pivotal for the functionality of devices such as iPhones.
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Video Transcript
Welcome to Global Foundries Fab 8 here in Malta, New York.
And what is it that you guys are making here?
Roughly, we put out about a million chips a day.
Global Foundries isn't the microchip company with the most hype right now.
It's not making chips at the bleeding edge or tripling its stock value this year,
like NVIDIA's done as its chips change what's possible with generative AI.
But behind the scenes, Global Foundries is essential,
quietly helping power nearly every connected device.
Look around, look at every electronic device in your house and I would bet you
money that everyone's devices has at least one GlobalFoundries chip in it.
This is one of the misnomers that GlobalFoundries suffers from is that
they're not baking the 5 and 3 nanometer chips, they're not making the
ARM-based A17 bionics from Apple, so they're not important. It's just patently
false. It can be a 12-cent part inside of your iPhone that enables it to work and
not work. In its short 14 year history, Global Foundries has risen to the
world's third largest chip foundry, manufacturing chips for other
companies who design them.
Its chips are inside everything from smartphones to cars, smart speakers
to Bluetooth enabled dishwashers.
And yes, the server is running generative AI.
You'll find power management, integrated circuits.
You'll find wireless connectivity, chips.
So it's an indirect AI play as opposed to a direct AI play.
Five years ago, the company made a bold move away from leading edge chips, exiting a race squarely won by Taiwan Semiconductor Manufacturing Company.
But now, as tensions with China cause concern over the world's reliance on TSMC and the U.S. and China play technological tug-of-war with export controls, Global Foundries finds itself positioned well outside the geopolitical crosshairs.
In a period of time where there's a lot of nationalistic interest, I think that could serve Global Foundries really well.
Now, GF is spending billions to expand production in Singapore, Germany, France and upstate
New York, where CNBC went for a first-hand look at what essential chipmaking looks like
on U.S. soil and asked how it plans to stay ahead.
while focusing on the older chips still essential for everyday devices.
It all began in 2009 when Advanced Micro Devices decided to break off its manufacturing operations into a separate company and focus entirely on designing
chips. Global Foundries took over AMD's chip fabrication plant, or FAB, in Dresden, Germany.
At the time, it was a joint venture between AMD and the government of Abu Dhabi's tech investment arm.
The company was run by a sovereign wealth fund in the Middle East, which often brought certain questions and scrutiny.
But it's no surprise financial backing was needed for the immensely expensive business of making chips.
The cost was also why AMD shifted entirely to design.
Now a tech analyst, Patrick Moorhead was working at AMD at the time.
Our founder, Jerry Sanders at AMD said, real men have fabs.
So the thought of spinning out the fab from AMD into its own company was a
was a really big deal.
But AMD had to do it.
Expenses for a leading edge fab were doubling every two or three years.
And right now we're looking at investments of campuses upwards of $100
billion. For the first few years, AMD was Global Foundry's primary customer.
And now AMD has grown to become NVIDIA's main rival for designing graphics
processing units. I think it worked out for everybody.
One of GF's first endeavors was to start building its brand new fab and
headquarters in Malta, New York, in 2009.
The next year, it expanded into Singapore with the purchase of Chartered
Semiconductor. By 2015, it had acquired IBM's in-house semiconductor
