Analysis – While it’s true that Global Foundries has an assured business fabbing out Advanced Micro Devices (AMD) designs, it has to make a far bigger impact on the industry if it truly wants to go it alone. It has a real chance to excel.
The customer deal it announced today with ST Microelectronics – even though it starts next year – is a real coup for Global Foundries.
Global Foundries will find itself competing against an array of chip manufacturers, from Taiwanese companies like TSMC and UMC, to Chartered of Singapore, and to mainland Chinese foundry SMIC.
IBM Semiconductors at East Fishkill is just down the road from the fab GF has started in New York State. And never let us forget that sometimes arch rival Intel fabs chips too – it is still making DEC Alpha microprocessors although we think HP’s range is now gone for ever.
And then there is the bigger picture. Japanese giants are winding down their chip operations to a greater or lesser extent, while there is a big consortium of semi firms which are allied against a greater enemy – as they perceive it – the mighty Intel.
Lest we forget – before AMD span off Global Foundries it had developed semiconductor expertise that even Intel was forced to follow – the design of the Opteron and Athlon made the chip giant miss a step. Intel eventually turned the ship round and put AMD on the back foot.
However, Global Foundries might just have started at the right time. Earlier today UMC confirmed what OECD indications said yesterday – the semiconductor industry is on the rise again.
Chips, like the Internet, are just not going to go away – they’re needed for all sorts of purposes and the Semiconductor Industry Association (SIA) sees things are on the rise.
Global Foundries has already got a top notch fab running in Dresden, Germany. It has expertise in areas that can’t be matched by TSMC, UMC, or Chartered – in the very important X86 business.
We think it really has got a chance, and other design wins will follow soon. Don’t forget that Microsoft needs companies to make chips for it too. Never mind Apple.