Globalfoundries Inc, seeking to become the world’s largest contract manufacturer of computer chips, will double spending on plants and equipment this year.
The company plans to increase spending to US$5.4 billion this year from US$2.7 billion last year, chief financial officer Robert Krakauer said in an interview.
The money will go toward upgrading a plant in Dresden, Germany, building another in upstate New York and planning a factory in Abu Dhabi.
The company, owned by an investment arm of the government of Abu Dhabi, is targeting Taiwan Semiconductor -Manufacturing Co (TSMC, 台積電) in the growing market for outsourced chip production. Globalfoundries — formed out of the manufacturing operations of Advanced Micro Devices Inc and Chartered Semiconductor — is raising spending to levels few chipmakers can match.
TSMC, the largest made-to-order chip producer, said in October that its capital spending this year would likely surpass the US$5.9 billion level of last year. Only Intel Corp, which budgeted US$5.2 billion for last year, and Samsung Electronics Co, which spent about US$10 billion, are also in that same range.
The rising cost of building a chip factory means fewer companies are making their own products. That’s increasing the pool of customers for contract-manufacturing plants, known as foundries. A factory requires an investment of more than US$4 billion, with individual machines costing more than US$10 million each.
The California-based company has won contracts from customers such as Qualcomm Inc and -STMicroelectronics since its creation in 2009. Those — along with sales from Chartered’s customers — have lessened its reliance on AMD, which initially provided all of its revenue, Krakauer said.
The company inherited plants from AMD in Dresden and a proposed factory near Albany, New York. That facility will begin production next year and make shipments to customers in 2013.
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