Semiconductor manufacturer GlobalFoundries is increasing its production capacity in Singapore with a hefty US$4 billion (S$5.4 billion) investment.
The addition of a new fab, or manufacturing plant, here comes amid a global chip shortage and is expected to add about 1,000 jobs, the company said yesterday.
About 95 per cent of these jobs will be high-value roles such as those of equipment technicians, process technicians and engineers.
GlobalFoundries' investment is in partnership with the Singapore Economic Development Board (EDB) and co-investments from customers. Its commitment here is among the largest in recent years.
The new fab, which is under construction, will be located at the company's existing Woodlands campus and is expected to start production in January 2023. It is slated to reach full capacity by early 2024.
The fully automated fab will have about 23,000 sq m of clean-room space and add about one-third of wafer production capacity to the company's Singapore operations, bringing capacity to about 1.5 million wafers a year.
GlobalFoundries' Singapore operations account for about one-third of the company's revenue and serve about 200 customers worldwide. It has about 4,800 employees here, around a third of its global headcount.
Chief executive Tom Caulfield said: "Our new facility in Singapore will support fast-growing end-markets in the automotive, 5G mobility and secure device segments with long-term customer agreements already in place."
Its Singapore expansion comes alongside planned investments of more than US$1 billion each in manufacturing sites in Germany and the United States, he said in a virtual press conference yesterday.
The US$6 billion committed over the next few years is on top of its planned US$1.4 billion investment this year to raise its factories' output.
The company is accelerating its investments around the world to meet the challenge of the global chip shortage, Dr Caulfield said, adding that he expects supply to still be outpaced by demand in the next five to eight years.
The company is expanding first in Singapore as its factory here has been around the longest and is at full capacity, he said.
GlobalFoundries has five wafer fabs here and has committed $12 billion in fixed asset investments since it acquired Chartered Semiconductor Manufacturing in 2010.
-
Manufacturers invest to boost capacity
-
Semiconductor manufacturers globally have seen demand outstrip supply since last year, with the chip shortage predicted to continue into next year and possibly beyond that.
The impact of the shortage has been amplified by the fact that semiconductors have become crucial in products from mobile phones to laptops to cars.
The chip shortage was triggered by the Covid-19 pandemic, which caused manufacturers to adopt a more conservative approach towards projections and orders. But a stronger-than-expected recovery led to a sudden upswing in demand that caught chipmakers unprepared.
The squeeze has led to delays in production and in some cases brought operations to a standstill. Automakers cut production by nearly one million vehicles in the first quarter because of the lack of chips, according to research provider IHS Markit.
GlobalFoundries' planned investments in its Singapore, Germany and United States facilities in the next two years are reflective of the immediate action manufacturers are taking to meet the surge in demand.
It is one of the largest foundries - contract chipmakers - worldwide in terms of market share. It manufactures semiconductors designed by chip giants AMD and Qualcomm.
Taiwan Semiconductor Manufacturing Company, the world's largest contract chipmaker, announced in April that it would be putting US$100 billion (S$134.7 billion) towards increasing capacity as well as research and development to meet demand.
Global leaders are increasingly aware of the implications of the shortage. China and the US have both mooted financial support to bolster domestic semiconductor production amid concerns about supply and national security.
Choo Yun Ting
Mr Ang Kay Chai, senior vice-president and head of global operations at GlobalFoundries, highlighted the importance of supply security for its operations and said it will have duplicate technologies produced in its fabs in different locations more often.
The chipmaker's efforts to expand capacity come as the global chip shortage continues, with prices for consumer goods going up as a result. Automakers and consumer electronics manufacturers have been hit, leading to delays in production and higher prices.
The virtual groundbreaking ceremony for the new Singapore fab yesterday was witnessed by Transport Minister and Minister-in-charge of Trade Relations S. Iswaran, and Mubadala Investment Company managing director and group chief executive Khaldoon Khalifa Al Mubarak, among others.
GlobalFoundries is owned by Mubadala Investment Company, the Abu Dhabi state investor.
EDB chairman Beh Swan Gin said that the semiconductor industry is a key pillar of Singapore's manufacturing sector, and GlobalFoundries' new investment is testament to the Republic's attractiveness as a global node for advanced manufacturing and innovation.
"It will help GlobalFoundries' customers to strengthen the resilience of their supply chains, and also add to the vibrancy of our economy through the creation of good jobs for Singaporeans and business opportunities for our local enterprises," he said.
Mr Iswaran said that on top of adding 1,000 jobs, the company's expansion will offer many employment opportunities through the supporting ecosystem of suppliers, contractors and service providers.
The investment also brings Singapore closer to achieving its goal of growing the manufacturing sector by 50 per cent by 2030, he said.
"GlobalFoundries' continued growth in Singapore also builds on the strong bilateral relationship between Singapore and Abu Dhabi," he said, adding that the United Arab Emirates remains Singapore's top trading and investment partner in the Middle East despite the Covid-19 pandemic.
Addressing a question on a possible initial public offering that could value the manufacturer at US$30 billion, Dr Caulfield said he had no comment.
He said the company is focused on growing and creating the capacity its customers require.
