June 24, 2020 / 6:39 PM / 20 days ago

GlobalFoundries eyes new chip plant as Washington mulls semiconductor stimulus-CEO

WASHINGTON, June 24 (Reuters) - GlobalFoundries could expand output at its flagship plant in the United States or break ground on a new one next to it, the chief executive of the third-largest semiconductor contract manufacturer told Reuters on Wednesday.

U.S.-based GlobalFoundries, which is owned by Abu Dhabi’s state-owned fund Mubadala, could install new equipment to take advantage of 30% to 40% of floor space that is currently unused a its Malta, New York factory, which would boost output within 12 to 14 months. In a second, later phase, it may build an adjacent plant that could be producing chips by 2024, Chief Executive Officer Tom Caulfield said in interview.

Caulfield said the plans would hinge on customer demand - which has been difficult to predict during the coronavirus pandemic - and could be significantly sped up if U.S. lawmakers pass a $22.8 billion package to bolster domestic chip manufacturing.

On Tuesday, GlobalFoundries, which processes specialty chips for customers such as Advanced Micro Devices Inc and Broadcom Inc, said it secured a purchase option agreement for approximately 66 acres of undeveloped land adjacent to its Malta plant. Expanding the existing plant would cost “in the single-digit billions” while building a new plant would cost “high single-digits or higher,” he said without providing further detail.

The plans come as lawmakers in Washington call for more funds to fuel growth of U.S. chip foundries, as the Trump administration faces off with Beijing to dominate the high-tech industry. Republican Senator John Cornyn and Democratic Senator Mark Warner introduced a bill this month to provide more than $22.8 billion in aid for semiconductor manufacturers and more legislation is expected.

“There’s only a certain pace at which we can go,” Caulfield told Reuters. “A partnership with the U.S. can accelerate that capability. ... What may take us five years, we can accelerate to two years.”

GlobalFoundries expects flat revenue this year of about $5.5 billion, lower than its initial forecast of $6 billion due to its sale last year of a custom-chip business to Marvell Technology Group Ltd for $600 million, which GlobalFoundries viewed as competing with its own customers.

The manufacturer still plans an initial public offering that allows Mubadala to maintain a majority stake, but the listing may slip into 2023 from a previously projected 2022, Caulfield said, adding the effort is tied more closely to hitting financial milestones than a calendar date. (Reporting by Alexandra Alper in Washington and Stephen Nellis in San Francisco; Editing by Aurora Ellis)

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