GlobalFoundries, the world's third-largest semiconductor foundry, is looking for a buyer for its 300 mm fab (Fab 7) in Woodland, Singapore, Taiwan's Digitimes has reported. The report came in less than two months after the U.S. foundry signed a contract to sell its Fab 3E in Singapore to Vanguard International Semiconductor (VIS) in Taiwan.
Market watchers’ focus is on Samsung Electronics. Digitimes named Samsung Electronics as a potential buyer, together with a Chinese semiconductor company. Samsung Electronics has been mentioned every time news of semiconductor-related M&As is broken because it is sitting on a 100 trillion won cash mountain and has been seeking to shore up its non-memory business.
However, Samsung Electronics has no reason to acquire the fab from GlobalFoundries as it is ahead of others in semiconductor technology, industry watchers say. If Samsung decides to take over the fab, its goal is to secure a customer base rather than increase its production capacity, they say. "GlobalFoundry’s Singapore fab is not a very attractive target," said an analyst. “This is because the fab does not have big corporate customers like U.S. fabs.”
On the contrary, if the third-ranked foundry is dismantled into separate fab units, it would benefit second-ranked Samsung Electronics as the Korean tech giant can widen its gap with followers. Market researcher IBS said that in 2018, Samsung Electronics' foundry share stood at 14.9 percent, larger than 8.4 percent of GlobalFoundries.
Analysts say that the UAE, which own GlobalFoundries, have decided to sell off its fabs in separate units after finding that neither Samsung Electronics nor SK Hynix are interested in acquiring the whole of the foundry. Mohamed bin Zayed bin Sultan Al-Nahyan, crown prince of Abu Dhabi, met with Lee Jae-yong, vice chairman of Samsung Electronics, and Chey Tae-won, SK Group chairman, during his visit to Korea on Feb. 26-27 to sound out about the sale of GlobalFoundries, but no deal was made. Since then, analysts say, the crown prince switched to selling the foundary after dividing it into pieces. The crown prince owns more than 90 percent of GlobalFoundries.
The proposed sale of GlobalFoundries has spawned skepticism among semiconductor experts about the fully depleted sillicon on insulator (FD-SOI) technology, which has been considered to be GlobalFoundries' competitiveness. Some semiconductor engineers point out that unlike what is known, FD-SOI technology could have some problems.
A Samsung Electronics official said that the company would not respond to any M&A rumors.