– GlobalFoundries to spend $3 billion on expansion – GlobalFoundries to spend $3 billion on expansion.

LONDON — Foundry chip maker GlobalFoundries Inc. (Sunnyvale, Calif.) has announced plans to expand its global semiconductor manufacturing operations with an additional spend of $3 billion over the next couple of years.The announcement was expected and is the latest in a series of capital expenditure expansions announced by leading foundries and memory chip makers (see Hynix raises capex, breaks with Numonyx).

GlobalFoundries’ spend will increase the size of the clean room in the wafer fab under construction in New York by about 40 percent and make GlobalFoundries Fab 1 into a gigafab by mid-2012. Globalfoundries is also spending in Singapore to increase capacity at what was Chartered Semiconductor.

The company, backed by the Abu Dhabi government through the Advanced Technology Investment Co., had previously planned to spend $2.5 billion on capex in 2010. A large portion of the additional spend is likely to come in 2011. Abu Dhabi has pledged to spend about $10 billion to build up GlobalFoundries as a world-class competitor in the foundry business.

GlobalFoundries said it plans to construct an additional wafer manufacturing facility at Fab 1 in Dresden, Germany, to increase the maximum manufacturing capacity to 80,000 wafers per month. At the same time GlobalFoundries is going to expand the clean room shell currently under construction at Fab 8 in New York to provide the option to take the site up to 60,000 wafers per month once it is fully equipped.

Fab 1 in Dresden, which is currently capable of about 30,000 wafer starts per month, had been on course to double capacity by mid-2012. Doug Grose, CEO of GlobalFoundries, said he expected the 80,000 wafer manufacturing capacity would arrive by mid- to late 2012. “The focus there is on 40-nm where we see huge demand. We’re also producing on 32-nm and we will do a bit of 28-nm production. New York is intended to focus on 28-nm production and below.”

Fab 8 is still under construction and is not expected to ship commercial wafers until the first half of 2012. As such the effect of expansion is unlikely to come into effect until late 2012 or 2013.

In addition to new expansion initiatives in Dresden and New York, GlobalFoundries is continuing with its previously announced expansion at Fab 7 in Singapore to reach an output level of 50,000 wafers per month, an increase of nearly 50 percent from current levels. During the expansion, Fab 7 will continue to focus on manufacturing technologies ranging from the 65- to 40-nm technology nodes.”How quickly we implement the capacity will depend on demand. It is high right now but if necessary we can modulate at Fab 1 and Fab 8,” said Grose. He said that manufacturing capacity utilization is running at 95 percent — essentially sold out, particularly at the leading-edge. “Nothing can be done in the short-term. If we can accelerate equipment installation or productivity throughput we will, but that won’t make a big difference this year,” said Grose.

But Grose emphasized that having a capacity roadmap as well as a technology roadmap was important to instill confidence in foundry customers.

“With this aggressive capacity build-out plan, we are well positioned to provide new and existing customers with the fastest option to get advanced products to market in the volumes they need to ensure success,” said Chia Song Hwee, chief operating officer of GlobalFoundries.

The expansion in Dresden will create Europe’s largest wafer fab and will add nearly 110,000 square feet of clean room space and taking the total to the equivalent of about eight soccer fields. The start of this expansion project at Fab 1 is subject to the approval of a state aid package by the German authorities and the European Commission.

The expansion at Fab 8, the company’s fab under construction at the Luther Forest Technology Campus in Saratoga County, New York will increase the size of the cleanroom shell by approximately 90,000 square feet, bringing the total available cleanroom space to approximately 300,000 square feet, equivalent to roughly six soccer fields

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