General M&A
October 5, 2021
6 minutes read

Markets: US Chipmaker GlobalFoundries Files For IPO

GlobalFoundries, an American semiconductor manufacturer owned by Abu Dhabi-based investor Mubadala, has filed for an initial public offering (IPO) in…

GlobalFoundries, an American semiconductor manufacturer owned by Abu Dhabi-based investor Mubadala, has filed for an initial public offering (IPO) in the US. The filing counters rumors that Intel was in talks to buy the chipmaker for $30bn, as it’s opted to remain independent but publicly traded.

GlobalFoundries was previously the semiconductor manufacturing business of AMD, the now-renowned high-end chipset maker. Back in 2008, when AMD was still a lesser-known company, it spun off its semiconductor manufacturing business and sold it in a series of transactions to Abu Dhabi-based Mubadala, the last in 2012.

Mubadala is a sovereign wealth fund of the United Arab Emirates (UAE). Under its guidance, GlobalFoundries has expanded thanks to strategic acquisitions and business deals.

GlobalFoundries has filed an F-1 document with the US SEC as expected for a company under foreign ownership seeking to go public. The document provides great insight into the company’s business with information not publicly disclosed before.

According to the F-1, GlobalFoundries brought in $4.9bn in sales in 2020, down from $5.8bn in 2019. The drop in sales corresponds with GlobalFoundries selling its Avera Semi ASIC division to Marvell Technology in 2019 for $650mn. An amendment to contractual terms with customers in the same year also affected how the company recognizes revenue.

Notably, GlobalFoundries isn’t profitable and hasn’t been for the past three consecutive years. It posted a $1.4bn net loss in 2020 and 2019 and a much higher $2.8bn loss in 2018.

But in the first half of 2021, amid a worldwide chip shortage, GlobalFoundries posted $3bn in sales, up 13% year-over-year in contrast to a revenue drop in the previous year. In the same period, the company lowered its net loss to $301mn, compared to $533mn in the first half of the preceding year.

The chip shortage that has driven up prices has favored GlobalFoundries, and a favorable time is likely the ideal time that the company picked to go public.

GlobalFoundries has filed to list on the Nasdaq exchange under the symbol “GFS”. Though it’s offering shares to the public, Mubadala will remain the chipmaker’s controlling shareholder driving most of its decisions and strategies.