GlobalFoundries Delays Construction of New Facility, Citing 'Economic Uncertainty'

Abu Dhabi-based newspaper The National has reported

The Silicon Valley-based foundry was formed as part of an AMD manufacturing spin-off in 2009 and currently has facilities in Dresden, Germany, Singapore, and New York. It had announced earlier this year that Abu Dhabi would be joining its list of worldwide locations.

The funding for GlobalFoundries' expansion comes primarily from Abu Dhabi-based Advanced Technology Investment Company (ATIC), which owns approximately 91 percent of the GlobalFoundries business. ATIC said that the postponement of a new foundry plant within the United Arab Emirates capital city is due to economic instability.

"We will not be engaging in any ground breaking in Abu Dhabi in 2012," said Ibrahim Ajami, a chief executive at ATIC, in a statement. "Against the backdrop of a global economy still very volatile, we took a decision from a board level that we should not have another facility right now, but we should assess what happens before the end of 2012 on our growth strategy."

The Abu Dhabi plant, which was initially planned to be operational by 2015, would have joined the ranks of other GlobalFoundries facilities producing chips for clients including AMD, Broadcom and Qualcomm.

Ajami assured The National that ATIC and GlobalFoundries aren’t calling it quits on the Abu Dhabi initiative. A decision as to when construction plans will resume will be disclosed by the end of 2012, he said.

Jason Gorss, a spokesperson for GlobalFoundries, also stressed the foundry’s commitment to the new Abu Dahbi plant, despite construction delays. "We are committed to establishing a manufacturing and technology presence in Abu Dhabi, but we haven’t established a concrete timeline or announced specific details about the facility," Gorss told CRN. "Given the volatility in the world economy and the decline in global semiconductor demand due to economic conditions, we are reviewing our expansion plans to ensure they are fully aligned with customers' needs."

While plans for Abu Dahbi have been put on hold, GlobalFoundries will continue to add new capacity by ramping tools in its New York and Dresden facilities, Gorss said.

Perhaps amplifying the economic uncertainty cited by GlobalFoundries is a recent report suggesting AMD may halt the production of its 28-nm chips currently underway at the foundry. AMD declined to comment whether manufacturing would be cancelled due to alleged low-yield production, but did tell CRN that the chipmaker is committed to its partnership with the foundry.