x Abu Dhabi, UAESunday 21 January 2018

Chip maker signs STM as its first customer

Globalfoundries, the Abu Dhabi owned semiconductor maker, signs its first new customer.

Globalfoundries, the semiconductor maker owned by Abu Dhabi's Advanced Technology Investment Company (ATIC) has signed its first new customer. The company was formed in a joint venture with AMD, the US microchip maker, which spun off its manufacturing assets into the new business. It will continue to be the maker of AMD chips, but the venture's sustainability depends on new customers.

Its first, announced on Friday, is STMicroelectronics (STM), a European chip maker that supplies its products to some of the world's largest telecommunications and computing businesses. The research group iSuppli listed STM as the world's fifth-largest semiconductor supplier last year. While the company has its own microchip making facilities, it said it would form a partnership with Globalfoundries to produce microchips based on the 40-nanometre manufacturing system.

The partnership will focus on producing low-power chips for use in mobile devices, with the first to be produced next year. "We believe Globalfoundries is an excellent partner to collaborate on low-power design innovation in 2010 and beyond," said Jean-Marc Chery, the chief technology officer at STM. Globalfoundries estimates the cost of building a new fabrication plant based on the 22-nanometre standard - expected to become the norm by 2012 - will exceed US$4 billion (Dh14.69bn).

The company has said it would aim for prominent members of the Global Semiconductor Alliance (GSA) as customers. Members of the GSA, such as the communications company Qualcomm and video card maker Nvidia, design their own computer chips but outsource manufacturing to a foundry company. ATIC's investment of at least $6bn into the company means it has the free cash to modernise its facilities and build new plants.