As AMD’s “girl friend” GF sold its 8-inch wafer fab to TSMC for $2.4 hundred million

TSMC holds a 60% share, which is largest among more than $50 billion of global wafer foundry production value each year. It also has a monopoly resulting other manufacturers are struggling. Globalfoundries(GF for short) announced quitting research and development of 7nm and below processes and focusing on other special processes such as RF and FD-SOI in August of last year. As a part of strategy shift, GF announces selling its 8-inch wafer Fab 3E in Singapore to VIS of TSMC for $2.36 hundred million, which is a shockingly low price for a 8-inch fab with 35 thousand wafers per month.

GF wafer fabs mainly locates in Germany, United States, Singapore and China, of which fab in Dresden is bought from wafer business of IBM, whose main process is FD-SOI, Fab 8 in New York focuses on 14 nm and 12 nm processes, which is a main origin of AMD Ryzen(CPU) and Polaris(GPU), fab in Singapore is bought from Chartered Semiconductor, who invests a 12-inch FD-SOI fab in Chengdu, China.

The Fab 3E in Singapore is nearly moved to China. GF negotiated with Chongqing government about investing a fab in 2016. They had second-hand equipment and technologies in Singapore 8-inch wafer fab for joint venture plant. The first stage would focus on 40 nm and above processes, which is normal at that time. However, GF asked for a 51% share and the cooperation failed. Thus, there were a 12-inch FD-SOI fab of Chengdu government.

Due to GF’s strategy shift, some poor processes and businesses are adjusted. The Fab 3E in Singapore is planned to be handled long ago, so it is sold to VIS of TSMC for $2.36 hundred billion. The latter will obtain not only Fab 3E and its employees, but also intellectual property of MEMS business. The deal will be finished before December 31, 2019, previously, GF will operate Fab 3E.

Although Fab 3E in Singapore is for 8-inch process, it can process 35 thousand wafers per month. Adding up with intellectual property its price, less than $2.4 hundred million, is still very low even if equipment of 8-inch fab have passed their depreciation period. It confusing people that GF is willing to sell its Fab 3E at such a low price which is a loss rather than earning.

According to Tom Caulfield, the CEO of GF, the deal is a part of their global strategy shift. GF will focuses on clear differentiation technololgy in Singapore in the future, such as RF, embedded memory and

analog chip. The 8-inch wafer businesses will be consolidated into one park in Singapore to reduce operating cost.

As for TSMC, it gets a bargin to purchase a 8-inch wafer fab with a 35 thousand wafers capacity for $2.36 billion. TSMC announced to expand 8-inch wafer fab earlier. It’s the first time for TSMC to enlarge its 8-inch capacity. During last two years, 8-inch wafer fab is very poppular. Because semiconductor products such as automotive electronics, power supply chip and fingerprint identification chip are sensitive to prices. However, 8-inch wafer fabs on the market have passed their depreciation period, which is popular because of low costs. As a result, there is a shortage of global 8-inch capacity, which is more popular than 12-inch capacity.