Oct 4 (Reuters) - Chipmaker GlobalFoundries revealed a jump
in revenue in its filing for a stock market flotation, setting
the stage for a blockbuster finish to a record year for initial
public offerings in the United States.
GlobalFoundries, which is owned by Abu Dhabi's sovereign
wealth fund Mubadala Investment Co, has not set terms for its
listing yet, but it could seek a valuation of about $25 billion,
Reuters first reported in August.
The IPO, one of the most hotly anticipated deals of the
year, is expected to round out a record year for flotations,
after several other big names such as Robinhood Markets Inc
, Coinbase Global Inc and Roblox Corp
capitalized on the capital markets boom earlier in 2021.
Alongside electric-vehicle maker Rivian's stock market
debut, GlobalFoundries is expected to headline an unusually
crowded year-end IPO schedule, as companies look to make the
most of sky-high investor appetite for listings of high-growth
GlobalFoundries filed for an initial public offering on
Monday of up to $1 billion, a placeholder figure that will
likely change when terms of the share sale are set. (https://bit.ly/2YgEJuh)
During the pandemic, the broader industry that includes
automakers and electronics producers has been crimped by a
global shortage of chips, which has fuelled manufacturing
GlobalFoundries' revenue had been in decline since 2018, but
over the past 12 months its growth rebounded as worldwide demand
for chips sky-rocketed.
"Although the supply-demand imbalance is expected to improve
over the medium-term, the semiconductor industry will require a
significant increase in investment to keep up with demand,"
GlobalFoundries said in the filing.
The chipmaker has been consolidating its product lines and
announced plans to expand into new factories in the U.S. and
Singapore. GlobalFoundries plans to build a second factory near
its Malta, New York, headquarters, and spend $1 billion to boost
The company's net revenue for the six months ended June 30
was $3.04 billion, up nearly 13% from a year earlier. Net loss
in the same period narrowed to $301 million, from $534 million a
GlobalFoundries was created when Mubadala bought Advanced
Micro Devices Inc's manufacturing facilities in 2009,
and later merged it with Singapore's Chartered Semiconductor
The company, which makes radio-frequency communications
chips for 5G, automotive, and other specialized semiconductors,
counts Advanced Micro Devices and Broadcom Inc among
GlobalFoundries was initially targeting a listing in late
2022 or early 2023, but moved up the timetable to capitalize on
the current IPO boom, people familiar with the matter said.
GlobalFoundries' decision to file for an IPO is a clear sign
that it is not eager to accept a potential merger with Intel
Corp or other potential buyers during the current chip boom.
The Wall Street Journal reported in July that Intel Corp
was weighing a buyout of GlobalFoundries. It stopped
short of making a formal offer, Reuters reported in August.
GlobalFoundries was concerned such a tie-up would upset some
of its key customers that are Intel's rivals, Reuters previously
GlobalFoundries is the world's third-largest foundry by
revenue behind Taiwan Semiconductor Manufacturing Co Ltd
and Samsung Electronics Co Ltd, but ranks
second when factoring out Samsung's foundry business that makes
chips for other elements of the South Korean firm.
The U.S.-based chipmaker, which has invested about $23
billion to build five manufacturing facilities across three
continents since the company was started in 2009, has about
10,000 patents, according to its filing.
GlobalFoundries plans to list on the Nasdaq under the symbol
Morgan Stanley, BofA Securities, J.P. Morgan, Citigroup and
Credit Suisse are the lead underwriters for the IPO.
(Reporting by Niket Nishant and Noor Zainab Hussain in
Bengaluru and Krystal Hu in New York; Writing by Anirban Sen;
Editing by Shounak Dasgupta)