GLOBALFOUNDRIES – FIRST DECADE OF GROWTH SINCE 2009

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Abstract: Spun off from Advanced Micro Devices (AMD) in March 2009, GLOBALFOUNDRIES is a truly global privately owned company with operations spread across three continents Germany, USA and Asia serving a wide cross section of customers. The company has consolidated its footprint as a leading full-service semiconductor design, development, fabrication and innovation pure play foundry. The article revisits a few of company's initial challenges and leadership decisions and draws few insights from its success story. It also suggests a few growth strategies as the company repositioned itself with its differentiated product offerings to its existing and new market segment in 2018 under the leadership of its new CEO, Dr. Thomas Caulfield.

I. MARCH 22, 2009 - AN IMPORTANT DATE IN THE HISTORY OF SEMICONDUCTOR MANUFACTURING

GLOBALFOUNDRIES, which was originally called “The Foundry Company” had been a part of a joint venture between Advanced Micro Devices Inc. (AMD) and Advanced Technology Investment Company (ATIC), owned by Abu Dhabi-based Mubadala Development Company (“Mubadala”).

Two days after the deal, it got its new name "GLOBALFOUNDRIES" in March 4, 2009. Doug Grose, former SVP Manufacturing, AMD become GLOBALFOUNDRIES ' CEO and former AMD CEO Hector Ruiz as Chairman. AMD's Fab 36 facility in Dresden became Global Foundries' Fab 1 with two capabilities: Module 1 for high-performance SOI 45 nm process technology, while module 2 for 32 nm bulk silicon development. It had also its plan to build its 300 nm wafer manufacturing new facility fab 2 (now called fab 8) in Saratoga County, New York for 32/22 nm process technologies.

ATIC acquired Singapore based Chartered Semiconductor Manufacturing Ltd. (“Chartered”) on December 18, 2009. On December 28, 2009, ATIC and GLOBALFOUNDRIES and Chartered entered into a Management and Operating Agreement (“MOA”) through which the management and operations of Chartered were entrusted to GLOBALFOUNDRIES

The details can be found in the consolidated financial statement for the period March 2, 2009 to December 25th 2009, and for the fiscal year ended Dec. 25th 2010 to of GLOBALFOUUNDRIES as exhibit 99.2

II. INITIAL CHALLENGES

GLOBALFOUUNDRIES (GF) has spent initial couple of years fixing its new production challenges from one product and one process AMD era to multiple products for multiple customers at multiple nodes. At the same time, working towards ramp up capacity by volume. The level of complexity was high and it needed a new approach to do “first time right” and zero excursion.

Unlike a pure play foundry business model, where a foundry engages with its customers only during manufacturing stage, GF created a new foundry model called “foundry 2.0” through early engagement and deep collaboration with its customers. GF’s growth strategy has always been “customer first” centric.

“ GF is a strategic asset for the global semiconductor industry and our shareholder. We will continue to invest to differentiate and grow the business and further consolidate the industry through partnerships, in a way that allows us to better serve our customers"- Ahmed Yahia Al Idrissi, Mubadala CEO and chairman of the GF Board of Directors.

The company entered into a collaborative agreement with its IDM partners resulting into “Common Platform Alliance” with membership from three key players namely Samsung, IBM and ST Microelectronics respectively. It entered into joint development and production Collaboration with Infineon for 40nm Embedded Flash Process Technology.

GF had to revisit exclusive supply agreement with its key customers to solve production yield issue. In this process entered into 28 nm production collaboration with Samsung thereby ICs could be produced at multiple facilities without any redesign requirements.

III. KEY STRATEGIC DECISIONS (2014-2018)

2014

Strategic Collaboration agreement between GF and Samsung for 14-nanometer manufacturing production deploy Samsung’s 14 nm technology at all GF facilities. This strategic realignment with Samsung shows how foundries are committed to delivering to the customer on schedule.

Brining Toshiba GF’s Ecosystem as Worldwide ASIC Partner

2015

Acquisition of IBM Microelectronics Business. With the IBM acquisition, GF became the #1 market share leader in RF, half of the driving factor in 4G and 5G

2016

GF signing a memorandum of understanding to drive its next phase of growth in China, and announcing new 12nm FD-SOI semiconductor technology.

2017 - GF entering into long-term supply agreement with Soitec on FD-SOI wafers. The move was to strengthen the FD-SOI supply chain and help ensure high-volume manufacturing as the market adopts GF’s 22 nm/12 nm or 10 nm FDX technology.

2018

Putting its 7nm FinFET program on hold indefinitely and restructuring its research and development teams to support its differentiated portfolio initiatives. This move would consolidate customer base who has no plan down the line to use leading age technologies less than 10nm. GF can now focus on its present 14 nm/12nm FinFET, 22 nm/12 nm FD-SOI, RF SOI, HP silicon-germanium (SiGe) technology for RF applications.

GF and the Chengdu municipality signed an amendment to their investment and cooperation agreement and decision to bypass the original phase one investment in mainstream process technology (180/130 nm). This would better align capacity building to meet China-based demand for GF’s differentiated offerings.

Launch of Avera Semiconductor LLC, a wholly-owned subsidiary intended to deliver custom ASIC solutions and free to use 7 nm manufacturing process technology from beyond GF. This would definitely help manage risk at the same time delivering ASIC offerings on 14/12nm including older technologies.

IV. LEADERSHIP

Doug Grose (2009-2010)

Doug Grose (Former SVP of Manufacturing, AMD) had been CEO of GF since its creation. He had a tough challenge to meet customers demand for more capacity, faster technology delivery and greater agility and improving operational performance.

There were a lot of roadblocks and challenges. The AMD spinoffs had been dedicated to single customer without significant diversification. The acquired Chartered had been technologically behind. They were 2nd source on 65 nm and degraded to 4th source on 40nm after the merger behind UMC and SMIC.

Capacity building and expansion milestones seemed slower than stakeholder’s expectations. The management team decided to appoint Ajit Manocha as interim CEO.

“As the world's leading chip design companies face increasing pressure to push the boundaries of innovation, they need a full-service foundry partner with the ability to invest and sustain an aggressive leading-edge technology road map while offering a full breadth of services," - Doug Grose.

Ajit Manocha (2011 -2014)

As interim CEO, Manocha had played a critical role in strengthening GF, focusing on improving operations, increasing customer engagement, and laying the groundwork for technology leadership in the future.

Manocha was instrumental in making the company the second largest foundry in the world and delivering on customer relationships, technology leadership and operational excellence,. He had put significant effort to revamp fabs and build capacity to cater to the requirements of new customers and their multiple product manufacturing. In a very short time, Manocha had overseen the company’s focused effort to achieve operational excellence, boost customer satisfaction and accelerate leading-edge capacity expansion plans.

“ ...Given the demand from our customers, our strong global assets and our committed investor with its long-term perspective, we’ll strive for market leadership in the semiconductor foundry industry... ” Ajit Manocha

Sanjay Jha (2014-2018)

Sanjay Jha led GF’s efforts to build out and ramp its Fab 8 in Malta, New York, for 14 nm and build partnership with the leading customers in the industry. A few of the strategic milestones during his pivotal four years were: (1) IBM’s microelectronics business in 2015 bringing a team of more than 1,000 technologists and a portfolio of 16,000 patents, as well as its East Fishkill chip manufacturing plant, (2) Establish a road-map for its FDSOI-based FDX manufacturing technology and (3) in 2017 announced a partnership with Chengdu, China where a 300mm wafer fab is set to begin operations in 2019.