Summary
In 2007, Chartered was ranked number four in revenue market share behind TSMC, UMC and SMIC. However, an acquisition of Chartered, combined with GlobalFoundries, could conceivably compete for the number two slot challenging UMC but likely not before 2011. An acquisition of Chartered Semiconductor folded into GlobalFoundries would not dislodge TSMC's position as number one foundry provider for fabless companies.
Analysis
The article presents insight and speculation on growth potential for the recently formed GlobalFoundies which was the first major investment in semiconductor manufacturing by a Middle East nation. While Chartered Semiconductor denied reports that they received a bid from Abu Dhabi’s Advanced Technology Investment Company (ATIC), their own statements hinted that they were in talks with a potential investor and frequently engage in discussions with various parties to pursue business opportunities.
GlobalFoundries announced intentions to build-up capacity “fairly aggressively” within the next 3 to 4 years. According to the firm, the plan is to invest “very aggressively” in 32nm and 22nm technology nodes. Whether or not that impressive investment and capacity buildup is targeted towards fabless semiconductor companies, or fab expansion through ATIC’s stake in an acquisition of a company like Chartered Semiconductor is still to be determined. Does it make sense? Is the timing right? The answer is yes! There are new companies and technology environments that will emerge from the recent downturn of the semiconductor industry. One private company, T-RAM Semiconductors recently signed an agreement with GlobalFoundries for joint development of their thyristor-RAM intellectual property. Could an expanded GlobalFoundries take market share from TSMC? Industry consensus is that most fabless companies would not want to risk their relationship with TSMC at least on their current products and designs.
Points to consider for any Chartered Semiconductor/GlobalFoundries relationship and growth opportunities:
(1) Abu Dhabi’s Advanced Technology Investment Company (ATIC) has invested $8.4 billion in GlobalFoundries (AMD's wafer fabrication spin out)
(2) Chartered and GlobalFoundries both participate in the IBM sponsored R&D Alliance using high-performance SOI (silicon on insulator) at the 32nm technology node.
(3) AMD relied upon Chartered for SOI foundry services for its microprocessor lines.
(4) If Chartered were combined with GlobalFoundries, available fabs competing for market share from TSMC/UMC would be in Dresden, Singapore and New York.
