GlobalFoundries to double expansion investment to $1.5 billion this year

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Globalfoundries Fab 1 near Dresden, Germany

(Image credit: Google)

Semiconductor giant GlobalFoundries is putting down “roughly $1.5 billion” toward the expansion of its semiconductor manufacturing capacity. That’s double GlobalFoundries usual yearly tech expansion fund, and it could mark a promising future for the wafer industry.

According to David Reeder, the company’s Chief Financial Officer, future wafer supply will be pre-allocated in order to gain upfront funding for this massive expansion. He notes that a third of the total amount will come from these customer and partner pre-orders.

Anandtech elaborates, explaining that GlobalFoundries has a mind to erect at least a new fabrication plant near the company’s Fab 8 in Malta, New York, as well as increase the capacity of it’s Fab 1, near Dresden, Germany.

All this points to production capacity increasing to around 13 percent over 2021 numbers, and by 2022 we could see that number rise to 20 percent.

As we’ve mentioned before, semiconductor capacity is incredibly tight right now. GlobalFoundries main competitor, TSMC, has turned to auctioning off “excess capacity” at a premium, even after the company’s manufacturing capacity was supposedly all booked up until 2024.

And considering some of TSMC’s main wafer plants are under threat by the Taiwanese water crisis, more options for customers will certainly be welcomed across the seemingly barren wafer production landscape. While the move may not have immediate effect on our current woes concerning chip availability, eventually it will translate into substantial relief for the industry. 

Following the EU’s incitement of the Digital Compass plan, which promises a whopping €140 billion ($166 billion) investment across the board, and U.S. President Biden’s order to review the risks faced across the semiconductor manufacturing industry, it’s likely this is the start of a positive trend to bolster and balance an industry currently dominated by TSMC. 

It feels strange for a tech writer to be saying this, but hopefully demand doesn’t keep increasing. Because right now supply can barely keep up.

Katie is a confessed logophile with a love of metaphor and an insatiable creative urge. She’s also an RPG, sim and survival game enthusiast who harbours an overt disdain for MMOs, un-managed cables and software that doesn’t include a dark mode.