Advanced Technology Investment Company (ATIC) has selected a site near Abu Dhabi International Airport for its semiconductor plant in the capital and pledged US$3.6 billion (Dh13.2bn) to expand the capacity of its Globalfoundries microchip business. ATIC, an investment company owned by the Abu Dhabi Government, bought a 65.8 per cent stake in Globalfoundries last March from its US counterpart Advanced Micro Devices (AMD) for $2.1bn.
ATIC has aggressively signalled its plans to be a leading maker of customised microchips with a number of high-profile customer announcements. It recently increased its investment in Globalfoundries to 73 per cent, with plans to buy the company outright in the future. Ibrahim Ajami, the chief executive of ATIC, is scheduled to announce the company's plans today at an industry event in Taiwan. He is also expected to unveil plans to double its semiconductor wafer production at its foundries based in Dresden and New York.
Mr Ajami will also reveal the company's preliminary plans for building a technology centre to be based in Abu Dhabi that will support the company's long-term innovation plans and create the Middle East's first semiconductor foundry. The site will be near Abu Dhabi International Airport to give it access to the region's transport centres and educational facilities, and is designed to cover 3 sq km.
"This speaks to commitment by ATIC and Globalfoundries to the industry and it speaks to our clear strategy and desire to be a market leader," Mr Ajami said. "We have to further expand our facilities and offerings to ensure we are providing our customers what they desire." Ranjit Rajan, the research director at IDC Middle East and Africa, said that while the amount of capital needed to create a semiconductor industry in Abu Dhabi would be high, the benefits would be significant. "You'll be able to bring in the best skilled resources and highly skilled talent from across the world," Mr Rajan said.
"You'll spawn a number of different kinds of industries, which will form part of the ecosystem and lead to the development of sub-industries that will drive directly to the main plant. The overall image that the country will have will be more of a centre of innovation." But Mr Rajan said the UAE would need to invest highly in attracting the right talent to operate the kind of facilities needed to meet its high-tech ambitions.
Those plans may be already under way. Last week, ATIC hosted a research seminar in conjunction with the US-based Semiconductor Research Council at Yas Island. "We're obviously going to leverage a lot of the existing infrastructure around universities such as Masdar," Mr Ajami said. "It's very preliminary but it signals to the marketplace that Abu Dhabi is very committed to building a semiconductor ecosystem."
The broader investment will gradually increase monthly production of semiconductor wafers in its Dresden foundry to 80,000 from 30,000, and expand the output of its New York facility that is still under construction to 60,000 from 35,000 by 2012. Globalfoundries announced in January it plans on raising monthly output at its Singapore foundry to about 70,000 wafers from 35,000. Semiconductor wafers are circular discs made of pure silicon that are later manipulated to design the microchips needed to produce electronic goods.
Rising demand in producing microchips will mean the semiconductor foundry industry will be worth $26.8bn this year, according to technology research firm IC Insights. "By 2014, what you will have in place is that we'll have big [foundry] clusters hosting anywhere between 60,000 to 100,000 wafers a month," Mr Ajami said. "These are massive facilities and what Globalfoundries is doing today is making sure that we'll be well positioned to be market leaders by then."
After its purchase of Singapore's Chartered Semiconductor last year for Dh14.8bn, Globalfoundries is the third-largest semiconductor foundry in the world by revenue behind Taiwan Semiconductor Manufacturing Company and United Microelectronics Corporation. iSuppli, a technology research firm, expects Globalfoundries to jump to second spot by the end of this year. @Email:firstname.lastname@example.org