GlobalFoundries, the second largest contract chip maker in the world, said that it had replaced chief executive Sanjay Jha with Thomas Caulfield, senior vice president and general manager of its advanced production plant in upstate New York, as the company eyes a larger share of the $57 billion foundry market.
Caulfield was hired and charged with the Fab 8 plant shortly after Jha became chief executive officer in 2014. He was tasked with converting it from 28-nanometer to 14-nanometer production, which is used to manufacture the most advanced processors in the industry today. Before his promotion, he was also revamping the factory to handle the next generation of 7nm technology.
Caulfield came to the company after spending almost two decades at IBM, where he held various roles before taking charge of the company’s factory in upstate New York, which GlobalFoundries now owns. In between his roles at IBM and GlobalFoundries, he was chief operating officer at the lighting manufacturer Soraa and executive vice president of sales and marketing for semiconductor equipment firm Novellus.
GlobalFoundries said in a statement that Jha “intends to work closely with the company’s shareholder, Mubadala Investment Company, to explore the development and build out of potential future systems businesses.” The company gave no other indications of why he had stepped down or what how these systems businesses could relate to GlobalFoundries.
Tagging in Caulfield does not imply any major strategy changes for GlobalFoundries, which was founded when AMD divested its manufacturing operations in 2009. The contractor’s customers include AMD, IBM, Qualcomm and Skyworks, among others. But it has struggled to wrench more profitable deals out of the clutches of market leader TSMC.
The company manufactures the Ryzen and Epyc products that have reinvigorated AMD. But it uses 14nm technology licensed from Samsung instead of its own process, which it scuttled. GlobalFoundries is trying to rebound by skipping the 10nm process entirely. It is in 7nm pilot production now and expects to begin full production in the second half of the year.
Like rivals, the company plans to introduce extreme ultraviolet lithography – also known as EUV – to lower the cost and reduce the number of steps in its 7nm process. It has installed a single EUV system in Fab 8 and cleared cleanroom space for three more machines, according to multiple reports. Each system costs over $100 million.
GlobalFoundries has been collecting orders for chips manufactured on its FD-SOI technique, which sacrifices a little performance for lower power and die costs. The fully-depleted silicon-on-insulator technology is meant for wireless sensors, connected cars, and other Internet of Things applications. It expects to have 25 chips taped out by the end of the year from clients including STMicroelectronics.
GlobalFoundries is also trying to fend off new competitors. Samsung, taking advantage of the billions of dollars that it has already invested in research and manufacturing, entered the made-to-order business last year after previously only making its own chips. Intel has also revitalized its foundry business, taking order for ARM chips. Intel estimates the value of the foundry market for 22nm and smaller process nodes at about $23 billion.
Both companies are trying to steal some of the thunder from TSMC, which generated $32.2 billion in revenue last year from about 450 customers worldwide, including Apple and Nvidia. The company, whose revenue has soared from $17.1 billion in 2012, had 55.9% market share in 2017, according to market research firm TrendForce.
Even though it shares many of the same customers as TSMC, minus Apple and Nvidia, GlobalFoundries was a distant second with around 9.4% share of the foundry market in 2017. The Santa Clara, California-based company is privately held by the Mubadala Investment Company, a fund owned by the government of Abu Dhabi, one of the United Arab Emirates.
The third and fourth largest companies in the foundry sector are Taiwan’s United Microelectronics and Samsung, which accounted for 8.5% and 7.7% of market share respectively in 2017, according to TrendForce. China's Semiconductor Manufacturing International Corporation, or SMIC, generated an estimated $3.1 billion in revenue last year for a 5.4% share.
Since Jha was hired, GlobalFoundries has been trying to break away from the pack. In 2015, the company acquired IBM’s microelectronics business for $1.5 billion payable over a period of three years, giving it RF and ASIC manufacturing lines. GlobalFoundries still uses the plants it acquired in the deal to manufacture chips for IBM’s Power servers and mainframe computers.
Last year, GlobalFoundries announced a $10 billion project with support of the local government to build an advanced semiconductor factory in the central Chinese city of Chengdu. The company plans to begin production in the world’s fastest growing chip market before the end of this year and to convert the 300-millimeter wafer fab to FD-SOI production next year.
Jha came to GlobalFoundries after serving as the chief executive of Motorola Mobility, which Google bought in 2012. Before that, he had been co-CEO of Motorola, which eventually split in two. He had another high-profile position as Qualcomm’s chief operating officer and head of its CDMA Technologies unit from 2006 to 2008.
Hiring Caulfield is only the most recent executive change at GlobalFoundries, which operates 10 factories worldwide. In November, the company hired a new chief financial officer, Doug Devine, from United Test and Assembly Center, a semiconductor test firm with customers including Qualcomm and Seagate.
Ahmed Yahia Al Idrissi, chairman of the GlobalFoundries board and chief executive of Mubadala’s technology division, said that the company is “a strategic asset” for the fund. He added: “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.”