On this special episode of The Six Five - Insiders Edition, hosts Patrick Moorhead and Daniel Newman are joined by GLOBALFOUNDRIES CEO Tom Caulfield to discuss the success GLOBALFOUNDRIES has had, and how chipmakers are responding to the current global crisis and where the semiconductor market is poised for growth. 

 

In our conversation, Tom, Patrick and I explored the bold pivot GLOBALFOUNDRIES made in the last 18 months. GF decided to stop making the 7nm node after realizing they were not keeping up with market competition. Tom shared that the company refocused on specialty, feature-rich offerings, enabling customers to specialist in their marketplace.

 

What it means to be a specialty fab. Tom explained that it has become increasingly expensive to develop single digit nanometers and it’s almost cost prohibitive in some market segments. Customers needed a way to create value and innovation by staying on existing nodes. This requires the feature-rich technology. You need to have best-in-class RF, best-in-class low power, best-in-class digital performance, all balanced in one technology node, supporting IPs and interfaces. This is what GF has been focused on delivering for the last 18 months.

 

GF’s current position in the semiconductor market. Tom shared that when GF began, no one cared about their goal to be a global company. It wasn’t a feature. In 2019, governments started to understand the importance of semiconductors. The idea of making semiconductors indigenous to the countries or regions they are in, took off — giving GF an excellent position in the market. Now, in the COVID era, GF’s global footprint which used to be just nice to have, is now a key feature.

 

Utilizing public-private partnerships. We also discussed the real wins that come from private-public partnerships. State governments, like New York, invest in manufacturing plants to help the US be more competitive with the world.Tom shared that the Fab 8 facility in Saratoga County, New York, had roughly a billion dollar investment from the state. GF invested over $13 billion. Now this plant employs over 3000 people and has an enormous economic impact on the region. When done right, these private-public partnerships give the US the trifecta — supply chain mitigation, national security, and economic return.

 

Where we are going next. Finally, we explored what the future holds for the semiconductor market. COVID-19 has accelerated many technologies and digital transformations. Tom believes — as do we — that it’s here to stay. The US government is looking to make more investments in semiconductors to create the same level of economic activity that other countries have.

 

If you’d like to read more about GLOBALFOUNDRIES and the semiconductor industry, be sure to check out their website or check out the full episode below. While you’re at it, be sure to subscribe so you never miss an episode of The Six Five Podcast.

 

Disclaimer: This show is for information and entertainment purposes only. While we will discuss publicly traded companies on this show. The contents of this show should not be taken as investment advice.