Global CEO: The mainstream semiconductors are about to overcapacity

"Global mainstream semiconductor manufacturing capacity will be in surplus." On September 16, Ajit Manocha, the newly appointed CEO of Global Foundries, the world's third largest semiconductor foundry company, said in an interview in Shanghai that the semiconductor generation The industry is increasingly dependent on high capital and manpower input. As a result, warnings about excess capacity in the industry have started to ring.

With the support of oil capital, Gloffontein founded in 2009 has always given people a feeling of cost expansion. The company, which was jointly invested by AMD and the Advanced Technology Investment Corporation (ATIC) affiliated with the Abu Dhabi government in the United Arab Emirates, quickly became the third-largest semiconductor foundry after TSMC and Samsung in just a few years.

In 2010, Greenfield acquired Singapore Chartered Semiconductor and invested heavily in expanding production capacity in Singapore, Germany and the United States. This cost-free strategy has made TSMC and other semiconductor foundry giants a headache. Data shows that TSMC's profit margin is above 40%, but Groffield's profit margin is much lower than this figure. Despite this, the company is still making huge investments to expand its production capacity.

Ajit Manocha told reporters that in the next few years the company will still maintain this high investment model, and this year's capital expenditures will be as high as US$5.4 billion.

He said that the Abu Dhabi government consortium of the main investors of the Croatian government is a very "patienced" investor. It will not pursue short-term interests and will therefore be willing to make huge investments in areas that few people in the world have invested in. Investment; but at the same time, he also emphasized that the investors of Grover are pursuing returns. It is not a charity and therefore hopes to obtain high returns in the future after huge investment.

In fact, the semiconductor foundry industry has increasingly become a game for rich people. In addition to the $5.4 billion invested by Grover this year, Samsung announced that it will invest 9.2 billion U.S. dollars in semiconductors this year. TSMC has also invested 7.8 billion U.S. dollars for the first time this year.

In this regard, Ajit Manocha pointed out that there will be an excess of foundry capacity for mainstream process semiconductors (such as 65-nm, 90-nm, etc.), but the production capacity of leading-edge process semiconductors is still very strong. At present, the company's investment focuses on advanced process semiconductors. On OEM, so do not worry about the impact of excess capacity.

At the same time, in order to share huge capital expenditures, the industry is gradually showing a trend of integration. Not long ago, Gloria Verde announced that it will cooperate with Samsung to develop 28-nanometer production technology. The two sides will become important partners and will jointly share R&D expenses and resources. The 28-nanometer product will be mass-produced in the first quarter of 2012.

This approach of Greenfield is obviously competing with its largest competitor, TSMC, and TSMC and ARM are collaborating on a new 28-nanometer manufacturing process before volume production at the end of 2011.

At present, Grofont also plans to set up a plant in Abu Dhabi in the Middle East. The plant is planned to break ground in 2012 and put into operation in 2015. However, this area has almost no industrial base. Ajit Manocha told reporters that this is because the UAE government hopes to reduce its dependence on oil and develop high-tech industries. As a result, the semiconductor industry has become a key area for local development. At present, Globus has selected a piece of land near the airport in Abu Dhabi, and the UAE government has a dedicated team working on the construction of this new factory.

"The specific plan for the Abu Dhabi factory will depend on the overall mass production plan and the overall environment of the entire market," Ajit Manocha told reporters.