Globalfoundries Focuses on What It Does Differently

Sept. 29, 2018
Globalfoundries Focuses on the Technology It Knows Best

Last month, Globalfoundries pulled out of the race to manufacture 7-nanometer chips. Instead, the second largest made-to-order chip manufacturer said that it is now focused on enhancing its existing technology. On Wednesday, the company said that it is looking to give chips based on its 12-nanometer FinFet process 15 percent more density and 10 percent more performance than its 14-nanometer technology.

Globalfoundries said that it would target both FinFet nodes at markets like autonomous cars and data centers. Chips based on the 14-nanometer node can leverage 55 percent more computing power and 60 percent lower power than those based on 28-nanometers. In addition to boosting the speed of transistors and how tightly they can be grouped inside chips, Globalfoundries will add analog, radio frequency and embedded memory features to both processes.

The announcement is aimed at counterbalancing the recent turmoil at the roughly $6-billion business, which employs around 17,000 people globally. Since its previous chief executive Sanjay Jha resigned, Globalfoundries has cut around a thousand jobs to control costs and tighten its focus around core products. The current chief executive, Thomas Caulfield, is the former head of the state-of-the-art factory that was supposed to handle 7-nanometer production.

The updated strategy also means more investment into fully-depleted silicon-on-insulator (FD SOI) technology used in embedded applications with low power requirements. Globalfoundries said that chips based on the 22-nanometer node would enter production in the first half of next year. Orders from customers for these chips amount to more than $2 billion. The company has also shipped around 40 billion chips based on a related technology called RF SOI.  

Globalfoundries is attempting to get its hands on more of the business going to Taiwan Semiconductor Manufacturing Corporation, which leads contract chip makers with more than 50-percent market share. TSMC earned $33.8 billion in revenue over the last year and was first to enter volume production of 7-nanometer technology that customers like AMD and Nvidia are willing to pay top dollar for. The first 7-nanometer chips are shipping in Apple’s new iPhones.

The technology allows customers to pack around 70 percent more transistors onto silicon slabs than they could with TSMC’s existing 16-nanometer technology. The new node can also lower power by 60 percent or increase frequency by 30 percent, according to TSMC. Once the company ramps up production using a new type of photolithography (EUV), the 7-nanometer node will get an additional 10-percent efficiency boost and 20 percent area reduction.

"We are committed to enhancing our differentiated offerings to help clients get more value out of their investments in each technology generation," Bami Bastani, Globalfoundries’ senior vice president of business units, explained. “You can either spend 80 to 90 percent of your investments on chasing the leading edge, or you can double down on the technologies that give your clients what they need,” he said this week at the company’s Global Technology Conference.

Last month, the Santa Clara, California-based company said that it would not have enough customers to recoup the investment in 7-nanometer technology. But cancelling production would not lessen the company’s earning potential, Globalfoundries said. Orders of chips based on technology less advanced than 12-nanometers are projected to grow 16 percent to $65 billion in 2022, according to Gartner. That would account for three-quarters of the foundry sector.

Despite the loss of customers like AMD, Globalfoundries said that the soaring cost of chip development could help keep customers on its side. With the number of new transistors that can be etched onto silicon wafers every year slowing, development of a 7-nanometer processor is estimated to cost $300 million. That compares to nearly $200 million for 10-nanometer chips and more than $500 million projected for 5-nanometer ones, according to IBS.

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