"Patience is a Super Power" - "The Money is in the waiting"
Showing posts with label Global Foundries. Show all posts
Showing posts with label Global Foundries. Show all posts

Wednesday, September 3, 2025

The Trump Administration has recently invested in both MP Materials and Intel! Question: who might be next, and why!

 


These critical U.S. companies were named in the CHIPS Act and have received preliminary agreements (Preliminary Memoranda of Terms, or PMTs)—but for which funding has not yet been fully disbursed (i.e., not finalized yet):

Ed Note:
It appears the Trump administration is turning giveaways from the chips act, into "investments" in those companies targeted. This report speculates on which companies might be next, after investments have been made in Intel and MP Materials.



1. Microchip Technology (NASDAQ: MCHP)

  • The U.S. Department of Commerce signed a non-binding Preliminary Memorandum of Terms (PMT) to provide approximately $162 million under the CHIPS and Science Act, aimed at bolstering domestic semiconductor supply for automotive, defense, and aerospace industries. That funding has not yet been finalized.
    Z2Data+10NIST+10TSMC+10

  • In a twist, Microchip later backed off pursuing the grant for expansion of its Gresham, Oregon facility. That further suggests no disbursement has occurred yet.
    KGW+1


2. Micron Technology (NASDAQ: MU)

  • Micron has a preliminary agreement for a $6.1 billion CHIPS Act grant to build a chip fabrication campus in Clay, New York ("megafab") and boost capacity in Boise, Idaho.
    Chuck Schumer's Senate Website+15Wikipedia+15

  • As of now, this remains preliminary, which implies that funding has not been fully disbursed.
    Barron'sThe Verge


3. GlobalFoundries (NASDAQ: GFS)

  • In February 2024, GlobalFoundries signed a preliminary agreement for over $1.5 billion in CHIPS funding to strengthen domestic legacy chip supply.
    New York Post+1

  • The award was later finalized in November 2024—meaning the preliminary stage was completed and funding is now moving forward.
    Wikipedia


4. Intel (NASDAQ: INTC)


Summary Table

CompanyPreliminary Agreement?Finalized?Status
MicrochipYes, ~$162 M PMTNo, not finalizedFunding has not been disbursed
MicronYes, ~$6.1 B PMTNo, not finalizedStill in preliminary stage
GlobalFoundriesYes, ~$1.5 B PMTYes, finalizedFunding now moving forward
IntelYes, ~$8.5 B PMTYes, finalizedFunds now to be disbursed

Companies still in preliminary-only stage (no final disbursement yet):

  • Microchip Technology (MCHP) – ~$162 M PMT, not finalized.

  • Micron Technology (MU) – ~$6.1 B PMT, not finalized.


    Ed Note:  

  • Listen to any hints of more investments coming from Commerce Secretary Howard Lutnik in late September or before!

narrowing to AI tech & infrastructure and focusing on U.S.-domiciled names, here’s a balanced list of 10 companies that (a) are strategically important for American tech leadership, and (b) could see outsized upside if the U.S. government explicitly takes a position or expands incentives.


Core chip manufacturing (the foundation)

1) Intel (NASDAQ: INTC) — Leading-edge and advanced packaging fabs across AZ/OH/OR/NM; already the single biggest CHIPS Act beneficiary (grants + loans). A direct stake would further de-risk multi-node U.S. capacity and supply chain resilience. ReutersU.S. Department of Commerce

2) Micron Technology (NASDAQ: MU) — U.S. leader in DRAM/HBM and NAND; memory is the oxygen of AI clusters. The White House already announced a preliminary CHIPS package up to ~$6.1B for new U.S. fabs—government equity/co-investment would accelerate HBM ramp critical to training/inference. The White HouseThe Verge

3) GlobalFoundries (NASDAQ: GFS) — Only U.S. pure-play foundry at scale, trusted for DoD needs; finalized up to $1.5B CHIPS award to expand New York and modernize Vermont (incl. GaN). A government position would fortify secure domestic supply for auto/defense/edge-AI. NISTGlobalFoundries

4) Microchip Technology (NASDAQ: MCHP) — Mature-node MCUs/analog that go into everything from defense systems to data-center controls; ~$162M preliminary CHIPS support to expand U.S. fabs. Additional public backing would harden this critical “everywhere silicon” tier. NIST


AI compute & systems (where the work gets done)

5) Super Micro Computer (NASDAQ: SMCI) — Designs/racks full AI systems (GB200/NVL72, HGX B200) and leads on liquid-cooling at rack scale; a federal position signals confidence in domestic AI-server capacity and speeds deployments for gov/defense workloads. SupermicroSupermicro

6) Arista Networks (NYSE: ANET) — The Ethernet backbone for AI clusters (400/800G today, 1.6T on deck). Government support would catalyze U.S.-based networking scale-out across federal/HPC sites. Arista Networks

7) Lattice Semiconductor (NASDAQ: LSCC) — Ultra-low-power FPGAs for edge-AI, control, and security—ideal for ruggedized, power-constrained defense/industrial endpoints. A stake would expand “AI at the edge” capacity domestically. latticesemi.com+1


AI data-center infrastructure (power, cooling, reliability)

8) Vertiv (NYSE: VRT) — Power distribution & advanced liquid-cooling that make giga-scale AI sites possible; expanding NA solutions specifically to ease AI deployments. Federal backing would accelerate retrofits/new builds across critical facilities. Vertiv InvestorsVertiv


Materials & devices that unlock performance

9) Wolfspeed (NYSE: WOLF) — Silicon-carbide (SiC) devices and materials for efficient power (AI data centers, high-power PSUs, EV charging). Proposed $750M CHIPS support + large private capital—public co-investment would speed U.S. SiC capacity vital to AI power chains. WolfspeedSEC

10) MP Materials (NYSE: MP) — U.S. rare-earths mining/separation; DoD has already funded HREE separation at Mountain Pass. A deeper stake would cement a domestic magnet/REE supply for defense, motors, and data-center equipment.

(Recently turned into an investment in the company by the administration)  

U.S. Department of Defense


Why these 10?

  • National-security leverage: Together they span logic, memory, foundry, servers, networking, power/cooling, edge FPGAs, SiC power, and REE supply—i.e., every chokepoint between sand and AI output.

  • Policy momentum: CHIPS/DPA precedents exist (Intel, Micron, GlobalFoundries, Microchip; DoD for MP). Additional capital or a formal government position would reduce financing risk and accelerate

Monday, October 14, 2024

We bought shares of Global Foundries today - Here are some reasons why!

 


GlobalFoundries (NASDAQ: GFS)


Executive Summary

GlobalFoundries (GF) is a leading semiconductor foundry specializing in the fabrication of integrated circuits for a diverse range of customers worldwide. With a strategic focus on differentiated technologies and specialty processes, GF occupies a unique position in the semiconductor industry. The company has demonstrated robust financial performance and is poised for growth, driven by increasing demand in sectors like automotive, Internet of Things (IoT), and 5G communications. This report provides an in-depth analysis of GlobalFoundries' technology portfolio, customer and partner ecosystem, financial health, and growth prospects.


Company Overview

Background

Founded in 2009 through the divestiture of AMD's manufacturing operations, GlobalFoundries has evolved into one of the world's top semiconductor foundries. Headquartered in Malta, New York, the company operates multiple fabrication facilities ("fabs") across the United States, Europe, and Asia. As of October 2023, GF employs over 15,000 people globally and serves more than 200 customers.

Business Model

GlobalFoundries operates as a pure-play foundry, manufacturing semiconductors designed by its clients. This model allows the company to serve a broad spectrum of industries, including automotive, aerospace, consumer electronics, and telecommunications. GF focuses on delivering differentiated solutions through specialized process technologies rather than competing in the leading-edge node space dominated by players like TSMC and Samsung.


Technology Portfolio

Manufacturing Processes

GlobalFoundries offers a wide range of process technologies, emphasizing:

  • FD-SOI (Fully Depleted Silicon-On-Insulator): Enhances performance and energy efficiency, ideal for IoT and mobile applications.
  • RF (Radio Frequency) Technologies: Supports high-frequency applications crucial for 5G and satellite communications.
  • Analog and Mixed-Signal Processes: Serves automotive and industrial sectors requiring high reliability.

Technology Nodes

While the industry leaders push towards sub-5nm nodes, GF focuses on mature and specialized nodes ranging from 12nm to 350nm. This strategic choice allows the company to cater to markets where cost-effectiveness and specialized performance outweigh the need for cutting-edge miniaturization.

Advanced Packaging

GlobalFoundries invests in advanced packaging solutions like 2.5D and 3D integration, enabling higher performance and functionality without shrinking transistor sizes. This approach is increasingly important for applications requiring compact form factors and high interconnectivity.


Customers and Partners

Major Customers

  • AMD: Continues to source certain CPUs and GPUs from GF, leveraging their historical relationship.
  • Qualcomm: Utilizes GF's RF technologies for mobile chipsets.
  • NXP Semiconductors: Collaborates on automotive and industrial applications.
  • Broadcom: Relies on GF for networking and communication chips.
  • Skyworks Solutions: Partners for RF components in mobile devices.

Strategic Partnerships

  • IBM: Engaged in joint development agreements focusing on semiconductor research and innovation.
  • ARM Holdings: Works together to optimize ARM cores for GF's processes, enhancing performance and power efficiency.
  • STMicroelectronics: Collaborates on FD-SOI technology to expand its adoption in various applications.

Financial Performance

Revenue Growth

  • 2022 Revenue: $8.1 billion, a 23% increase from 2021.
  • H1 2023 Revenue: $4.3 billion, indicating continued growth momentum.

Profitability

  • Gross Margin: Improved to 27% in H1 2023 from 24% in the same period last year.
  • Net Income: Reported $500 million in H1 2023, up from $350 million in H1 2022.

Balance Sheet Strength

  • Total Assets: $20 billion as of June 2023.
  • Cash and Equivalents: $2.8 billion, providing ample liquidity.
  • Debt Levels: Managed debt with a debt-to-equity ratio of 0.5, indicating prudent financial leverage.

Cash Flow Analysis

  • Operating Cash Flow: Positive and growing, reaching $1.2 billion in H1 2023.
  • Capital Expenditures: Invested $800 million in H1 2023 for capacity expansion and technology development.
  • Free Cash Flow: Remained positive, supporting future investments and shareholder returns.

Growth Prospects

Market Drivers

  • Automotive Electronics: Increasing semiconductor content per vehicle, especially with the rise of electric and autonomous vehicles.
  • 5G Deployment: Demand for RF components and advanced communication chips.
  • IoT Expansion: Growth in connected devices requiring specialized semiconductors.

Capacity Expansion

GlobalFoundries announced significant investments to expand manufacturing capacity:

  • Fab 8 in Malta, New York: A $1 billion investment to increase output by 50% over the next three years.
  • Fab 1 in Dresden, Germany: Expanding capacity to meet European demand, supported by government incentives.
  • Singapore Facility: Investing $4 billion to double capacity, catering to Asia-Pacific markets.

Research and Development

  • Investment: Allocated over $600 million annually towards R&D.
  • Focus Areas: Advanced materials, silicon photonics, and power management technologies.
  • Collaborations: Partnerships with universities and research institutions to accelerate innovation.

Risks and Challenges

Competitive Landscape

  • Leading-Edge Competitors: TSMC and Samsung dominate the advanced node market, potentially attracting high-margin business.
  • Emerging Foundries: Chinese foundries like SMIC are investing heavily, increasing competition in mature nodes.

Technological Challenges

  • Process Innovation: Need to continuously improve processes to meet evolving customer requirements.
  • Supply Chain Dependencies: Reliance on critical equipment and materials could pose risks amid geopolitical tensions.

Market Dynamics

  • Cyclical Demand: Semiconductor industry is subject to cyclical trends, which could affect utilization rates and profitability.
  • Customer Concentration: Significant revenue from top customers like AMD and Qualcomm; loss of major clients could impact financials.

Conclusion

GlobalFoundries has established a solid position in the semiconductor industry by focusing on differentiated technologies and specialty processes. The company's strategic initiatives, robust financial health, and strong customer relationships position it well for sustained growth. While challenges exist in the form of competition and technological advancements, GF's targeted investments in capacity and R&D are likely to mitigate these risks.


Investment Considerations

  • Strengths: Diverse customer base, strategic focus on growing market segments, strong financial performance.
  • Opportunities: Expansion in automotive and IoT sectors, capacity growth, potential government support for domestic semiconductor production.
  • Risks: Competitive pressures, technological obsolescence, macroeconomic factors affecting semiconductor demand.

Disclaimer: This report is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence before making investment decisions.


Editor note:

(Bloomberg - June 2024) -- "GlobalFoundries Inc. will produce a sample of startup Diraq Pty’s chip equipped with both quantum and classical processors this month, the latest attempt to make quantum computers practical in the real world".

(Diraq is a private Australian company with two decades of developing the technology to make Quantum dot chips from Silicon!)

Uber and Waymo, a partnership that should become a powerhouse in the Burgeoning RoboTaxi market!