Contract chip manufacturer GlobalFoundries is stepping up its spending to expand production. The company plans to spend $4.4 billion this year to expand production as demand for smartphones and tablets climbs.
According to Bloomburg GloFlo will expand in all three of its manufacturing locations, Germany, Singapore and the US. Last year the company spent $3.8 billion. The cash will met by internally generated cash and funding from Abu Dhabi-based parent, Mubadala Development.
Sales of semiconductor wafers at GlobalFoundries helped Mubadala, the state-owned company with investments in General Electric and Carlyle Group, to return to profit last year. Microsoft will use an AMD processor in its next Xbox. AMD is still one of GlobalFoundriesâ€™ biggest clients. Currently GloFlo is one of the few chip manufacturers able to spend billions of dollars to build factories that can churn out the processors and communications chips needed to run the newest handsets. This is mostly thanks to its backers in the oil-rich Abu Dhabi government.
Capacity expansion in wafer manufacturing business and a strong customer base are tipped by analysts to result in higher revenues from GloFlo in the future. Semiconductors contributed 47 percent to Mubadalaâ€™s revenue in 2012 compared with 42 percent a year earlier. Sales of semiconductor wafers, used in the fabrication of integrated circuits and other microdevices, rose 26 percent to $4 billion.