Globalfoundries' turn in tit-for-tat expansion plans

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The people from GlobalFoundries travelled to Taiwan to let number-one foundry TSMC know that the youngest foundry is ready to keep on spending in what has become a capacity war in that business. It follows soon after TSMC’s own decision to push harder on capacity expansion with the building of its own Fab 15.

Although all this expansion might look like a one-way bet in the current market conditions, where you can pretty much sell everything you can make, by the time all of this capacity is meant to come onstream it could well be a different story.

Already trying to fill the second phase of its fab in Dresden as fast as possible with chipmaking gear, GlobalFoundries said at the Computex trade show in Taipei that it will build another section - once grants from Germany turn up - over the next two years. This will add 20,000 wafers per month, increasing Dresden’s capacity by one-third when that expansion has finished. Given that they have not started building the extension yet, this is a very aggressive schedule for filling a fab.

However, the schedule for the Malta, New York fab has slipped slightly. Originally slated to go into volume production in 2012, this is now not expected to happen until 2013. By the end of 2012, it will just be pilot production. However, Malta does not miss out on the capacity splurge. Fab 8’s peak capacity moves up from 42,000 wafers per month to 60,000 - eventually. Based on previous estimates from GlobalFoundries, this is unlikely to happen before the end of 2015.

Pushing the volume ramp at Malta back a bit may, if current market projections prove correct from analysts such as Future Horizons and IC Insights, help GlobalFoundries avoid walking straight into a capacity glut in 2012, and still capitalise on a recovery in 2013. However, things rarely work out that neatly in this business.

There’s more. GlobalFoundries’ owner ATIC said it would build a 3km2 ‘technology cluster’ in its home of Abu Dhabi. There is no firm news of a fab being built there other than strong hints: “GlobalFoundries is committed to partnering with ATIC to share best practices and expertise in cluster creation in the near-term and putting a significant technology and manufacturing presence in the region long-term.”