Brussels (Brussels Morning) The US-based, UAE-owned chipmaker GlobalFoundries has announced plans to invest as much as 6 billion dollars to expand its capacity in chip fabs in Singapore, the US and Germany in order to redress the semiconductor shortage currently plaguing global carmakers and electronics companies.
Emphasising that the expansion drive will prioritise the automotive industry, GlobalFoundries CEO Thomas Caulfield told media that the company aims to invest 4 billion dollars to expand production in Singapore, and 1 billion dollars each in the US and Germany.
The planned investment comes on top of the 1.4 billion dollars investment in the three locations that was announced in March, which aimed to increase production capacity by 13% in 2021 and by 20% in 2022.
The global semiconductor shortage caught chipmakers around the world off guard. Coronavirus pandemic lockdowns accelerated the adoption of new technologies in 2020. Millions of workers around the world purchased new computers and equipment to teleconference and work from home, while consumers spent their unused holiday and leisure budgets on television sets and home entertainment systems.
The automotive industry was hit particularly hard, as carmakers all over the world underestimated the demand for new vehicles at a time when plants were shutting down and potential customers were home-bound because of the pandemic.
As car manufacturers cancelled their orders for microcontrollers and specialist chips – now a prerequisite for all modern cars – chipmakers turned to more profitable and more dependable consumer electronics clients, a move that left the automotive industry strapped for key components once production resumed and demand picked up again.
Recognising the extent of the supply crisis, and realising that it is likely to continue for more than a year since new fabs and production lines need time to set up, the US and the EU have prioritised domestic superconductor capacity investments, in an effort to protect against possible future market disruptions.