Globalfoundries signs up Qualcomm

Globalfoundries, the Abu Dhabi-owned microchip maker, has signed a deal with the mobile chip maker Qualcomm, its biggest customer to date. The contract is a significant step in Globalfoundries's push to become a major force in the semiconductor industry. Qualcomm is the largest global chip maker to rely entirely on outside manufacturers. Abu Dhabi's Advanced Technology Investment Company (ATIC) created Globalfoundries in a joint-venture with AMD, the Californian company that is the world's second-largest maker of the microchips for personal computers.

AMD split off its manufacturing arm, which became part of Globalfoundries, as part of the deal, and it remains the Abu Dhabi firm's largest customer. But for the venture to reach the scale needed to be profitable, it has to attract a number of new customers. Qualcomm has been intimately involved in the development of several key standards associated with mobile communications. Its new processor, codenamed Snapdragon, is considered by many in the industry to be a breakthrough for mobile phone chips.

The Snapdragon chip powers the Nexus One, the first mobile phone to be released by Google. The increasing processing power demanded by high-end mobile phones is a "significant" opportunity for the semiconductor industry, said Ibrahim Ajami, the chief executive of ATIC. "You now have an opportunity for semiconductors to power billions and billions of smartphones and put them in the hands of consumers," Mr Ajami said last month. "That is a very big opportunity for GlobalFoundries."

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