GlobalFoundries: Chip shortage may last until 2022, the company plans to invest $1.4 billion to expand production

Recently, Thomas Caulfield, CEO of GlobalFoundries, the world's third largest wafer foundry, said that the company's capacity utilization rate is over 100%, the overall capacity is fully loaded, and GlobalFoundries is increasing its capacity at the fastest speed. However, the current supply and demand situation in the semiconductor industry has not eased and may continue until 2022 or later.

Caulfield pointed out that the chip shortage is having a serious impact on the global industry, such as delaying automobile production or the operation of consumer electronics manufacturers, and the chip shortage also highlights the importance of wafer foundries. Therefore, wafer foundries such as GlobalFoundries have also stepped up their efforts and invested billions of dollars to build new production lines and purchase new equipment to solve the dilemma of surging demand and supply shortages.

Caulfield further explained that in the past, foundry investments have focused on advanced processes to create the most cutting-edge, high-performance chips. However, the pandemic has accelerated the need for remote work, and demand for products such as laptops and monitors has surged. In addition to CPUs, these consumer electronic products also require other chips (such as power management ICs), which marked the beginning of the chip shortage.

For example, there is a severe shortage of automotive chips at present, but what is lacking is not chips using advanced processes, but chips such as automotive radars, which do not currently require the most advanced process technology. Caulfield believes that it will take several months to increase the supply of chips, but the increase in production capacity is meaningful for long-term investment.

It is worth mentioning that as the global semiconductor shortage has boosted chip demand, GlobalFoundries will invest US$1.4 billion this year to increase production at its three factories in the United States, Singapore and Germany.

Caulfield pointed out that due to the emergence of the new crown pneumonia, the speed of technology popularization has accelerated significantly in the past 2020, which may have taken ten years to complete before." He said that before the epidemic, the chip industry was expected to grow by 5% in five years. Now, it is clearly accelerating, with an increase of 10%.

GlobalFoundries said the $1.4 billion will be evenly distributed across its three factories in the United States, Singapore and Germany. Caulfield said about a third of the investment will come from customers (to ensure chip supply). Starting next year, the factories will increase production to produce chips from 12 to 90 nanometers. Caulfield expects the company's production to grow 13% next year and 20% in 2022.