GlobalFoundries investor Mubadala sees growth for the semiconductor sector
The semiconductor industry is set to record exponential growth over the next decade, according to the CEO of Abu Dhabi’s sovereign wealth fund Mubadala, who said chip makers are ready to play a “crucial” role in the global economy.
“It took 50 years for the semiconductor business to become a half-trillion-dollar business. It will probably take eight to ten years to double. And it will double right after that, probably in four to five years,”[ads1]; Khaldoon Al Mubarak told CNBC’s Hadley Gamble in an exclusive interview.
Mubadala is Abu Dhabi’s state investment fund and manages approximately $ 240 billion in assets. It is also a major shareholder in the chip maker GlobalFoundries, which recently raised almost $ 2.6 billion in an IPO – one of the largest on a US stock exchange this year.
“So we take it as a very important data point. You combine it with another very relevant data point … there it is [only] five foundries, global foundries, four of which are in Asia, “he added.
“One of them, Global Foundries has, I think, the unique differentiated platform of being in the US, in Europe and in Asia.”
Al Mubarak’s comments come as demand for chips continues to surpass supply. The shortage has hampered production across several industries, ranging from cars to consumer devices, personal computers and smartphones.
Some analysts and investors expect the supply crisis to persist until at least 2023, while others are more bullish.
GlobalFoundries acknowledged in its IPO that the semiconductor industry will require “a significant increase in investment to keep up with demand,” although the company expected supply-demand imbalances to improve in the medium term.
The company is third in the semiconductor manufacturing market, behind Taiwan Semiconductor Manufacturing (TSMC) and South Korea’s Samsung.
Taiwan-based United Microelectronics Corporation (UMC) and China’s Semiconductor Manufacturing International Corporation (SIMC) are among the other leading semiconductor foundry companies.
GlobalFoundries manufactures chips designed by customers for use in contactless payments, battery power management touch screen drivers and many other purposes. It has three American factories – two in New York State and one in Burlington, Vermont – as well as one factory in Germany and another in Singapore.
– CNBC’s Saheli Roy Choudhury & Ari Levy contributed to this report.
