By R.J. DeLuke
GlobalFoundries announced in late August that it is shifting its strategy and will cease development of cutting edge manufacturing technologies and stop all work on its 7LP (7 nm) fabrication processes. Instead, the company will focus on specialized process technologies for clients in emerging high-growth markets.
The change has resulted in layoffs. GlobalFoundries will eliminate 455 jobs at its Malta plant and another 31 based at SUNY Polytechnic Institute in Albany, according to filings with the state Department of Labor.
The company employed about 3,400 people before the restructuring.
It also casts doubt on an expansion the company announced in early 2017 that it would expand the Malta chip fabrication plant. Officials have not yet addressed that issue.
According to Bloomberg news, GlobalFoundries dropping out of the race to develop the most-advanced production technology increases the electronic industry’s reliance on Taiwan Semiconductor Manufacturing Co.
“I think it is important to note that GlobalFoundries has proactively reached out to local elected officials and business leaders, like the Chamber, sharing insights behind the changes they are making,” said Todd Shimkus, president of the Saratoga County Chamber of Commerce. “As we’ve been briefed, the company is pivoting from a strategy-based primarily on investment in successive generations of shrinking-dimension leading-edge technology to instead intensify investment in the technology that is already relevant for clients in high-growth markets.
“This pivot will ensure local operations and the company as a whole remains profitable and sustainable. No one ever wants to see local people lose their jobs, but we all hope this strategic decision will help GlobalFoundries to grow its business and Fab 8, in Malta, specifically over time.”
He noted that GlobalFoundries “has already had a huge positive impact in our region’s economy. It’s far more significant than anyone ever anticipated. They expect this will continue because of their understanding of the market for their products and how best to serve their customers. They are, in fact, still hiring locally to fill open positions within the leading edge technology market they are trying to grow as a result of this change.”
According to Tom Caulfield, CEO, GlobalFoundries is reshaping its technology portfolio to intensify its focus on delivering truly differentiated offerings for clients in high-growth markets.
“GlobalFoundries is realigning its leading-edge FinFET road map to serve the next wave of clients that will adopt the technology in the coming years. The company will shift development resources to make its 14/12nm FinFET platform more relevant to these clients, delivering a range of innovative IP and features including RF, embedded memory, low power and more,” a company release said.
“To support this transition, GlobalFoundries is putting its 7nm FinFET program on hold indefinitely and restructuring its research and development teams to support its enhanced portfolio initiatives. This will require a workforce reduction, however a significant number of top technologists will be redeployed on 14/12nm FinFET derivatives and other differentiated offerings.”
Caufield said demand for semiconductors has never been higher, and clients are asking us to play an ever-increasing role in enabling tomorrow’s technology innovations. “The vast majority of today’s fabless customers are looking to get more value out of each technology generation to leverage the substantial investments required to design into each technology node. Essentially, these nodes are transitioning to design platforms serving multiple waves of applications, giving each node greater longevity.
“This industry dynamic has resulted in fewer fabless clients designing into the outer limits of Moore’s Law. We are shifting our resources and focus by doubling down on our investments in differentiated technologies across our entire portfolio that are most relevant to our clients in growing market segments.”
According to the company, to better leverage GlobalFoundries’ strong heritage and significant investment in ASIC design and IP, the company is establishing its ASIC business as a wholly-owned subsidiary, independent from the foundry business. A relevant ASIC business requires continued access to leading-edge technology.
This independent ASIC entity will provide clients with access to alternative foundry options at 7nm and beyond, while allowing the ASIC business to engage with a broader set of clients, especially the growing number of systems companies that need ASIC capabilities and more manufacturing scale than GlobalFoundries can provide alone.
“GlobalFoundries is intensifying investment in areas where it has clear differentiation and adds true value for clients, with an emphasis on delivering feature-rich offerings across its portfolio” the new release said. “This includes continued focus on its FDXTM platform, leading RF offerings (including RF SOI and high-performance SiGe), analog/mixed signal, and other technologies designed for a growing number of applications that require low power, real-time connectivity, and on-board intelligence. “
“Lifting the burden of investing at the leading edge will allow GlobalFoundries to make more targeted investments in technologies that really matter to the majority of chip designers in fast-growing markets such as RF, IoT, 5G, industrial and automotive,” said Samuel Wang, research vice president. “While the leading edge gets most of the headlines, fewer customers can afford the transition to 7nm and finer geometries. 14nm and above technologies will continue to be the important demand driver for the foundry business for many years to come. There is significant room for innovation on these nodes to fuel the next wave of technology.”