How GlobalFoundries aims to remain world’s third-biggest semiconductor foundry

Published

2 years ago

October 1, 2023

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In its short 14-year history, GlobalFoundries has risen to become the world’s third-largest chip foundry. Based in upstate New York, GlobalFoundries isn’t a household name because it’s manufacturing semiconductors that are designed and sold by other companies.

But it’s quietly helping power nearly every connected device.

“Look at every electronic device in your house, and I would bet you money that every one of those devices has at least one GlobalFoundries chip in it,” Thomas Caulfield, GlobalFoundries CEO, told CNBC.

GlobalFoundries chips are inside everything from smartphones and cars to smart speakers and Bluetooth-enabled dishwashers. They’re also in the servers running generative artificial intelligence models, a market that’s booming so quickly that chipmaker Nvidia has surpassed a $1 trillion market cap and is forecasting 170% sales growth this quarter.

Within generative AI, GlobalFoundries isn’t focused on making the powerful graphics processing units (GPUs) used to train large language models like ChatGPT. Instead, the company is manufacturing chips that perform functions like power management, connecting to displays, or enabling wireless connections.

Caulfield says AI is “the catalyst for our industry to double in the next eight years and GF will have its fair share, if not more, of that opportunity.”

Five years ago, GlobalFoundries made a bold move away from leading-edge chips, exiting a race that was won by Taiwan Semiconductor Manufacturing Company.

Now, as tensions with China raise concerns over the world’s reliance on TSMC, and the U.S. and China play technological tug-of-war with export controls, GlobalFoundries finds itself positioned well outside the geopolitical crosshairs. The company has spent about $7 billion to expand production in Singapore, Germany, France and upstate New York.

CNBC went to Malta, New York, for a firsthand look at the fabrication plant where GlobalFoundries is adding 800 acres, to ask how the company plans to stay ahead while developing the older chips still essential for everyday devices.

‘It worked out for everybody’

The story began in 2009, when Advanced Micro Devices decided to break off its manufacturing operations into a separate company and focus entirely on designing chips. The newly formed GlobalFoundries took over AMD’s chip fabrication plant, or fab, in Dresden, Germany. At the time, it was a joint venture between AMD and the government of Abu Dhabi’s tech investment arm. Moorhead was working at AMD.

“Our founder, Jerry Sanders, at AMD said, ‘real men have fabs.’ So the thought of spinning out the fab from AMD into its own company was a really big deal,” Moorhead said. AMD “had to do it,” he added, because “the expenses for a leading edge fab were doubling every two or three years. And right now we’re looking at investments of campuses upwards of $100 billion.”

For the first few years, AMD was GlobalFoundries’ only major customer. AMD has since grown to become Nvidia’s main rival for designing GPUs.

“I think it worked out for everybody,” Moorhead said.

GlobalFoundries started building its new fab, and future headquarters, in Malta in 2009. The next year, it expanded into Singapore with the purchase of Chartered Semiconductor. By 2015, it had acquired IBM‘s in-house semiconductor division, taking over production sites in Vermont and New York. By 2018, GlobalFoundries was a $6 billion business.

“Unfortunately, it had a strategy that was not able to produce profitability or free cash flow,” said Caulfield. “So in 2018, when I became the CEO of GlobalFoundries, we decided to make a strategic pivot to focus all our energy, all our R&D, all of our capital deployment to go be the very best at these essential chips. And that began a journey to turning our company around to profitability.”

To this day, GlobalFoundries only makes 12-nanometer chips and above, or what it calls “essential” chips.

GlobalFoundries CEO Thomas Caulfield shows a 300mm wafer to CNBC’s Katie Tarasov at Fab 8 in Malta, New York, on September 5, 2023.

Carlos Waters

“If you do secure pay transactions, whether it’s on your credit card or on your smart mobile device, we make the chip that does that,” Caulfield said. “Do you like the photographs your camera takes? Well, we make image sensor processors that drive that camera. Do you like the battery life on your phone? We make the PMICs, the power management ICs that make sure that power is managed on these devices.”

During the 2021 chip shortage, GlobalFoundries told CNBC it sold out entirely. That same year, the company went public on the Nasdaq.

“Ultimately, we really need these chips,” said Daniel Newman, CEO of research firm Futurum Group. “We found that out because we had parking lots full of pickup trucks that couldn’t be shipped because they couldn’t put the ECU in or they couldn’t install power seats. So GlobalFoundries had a really strong market requirement.”

Global growth

GlobalFoundries is the only one of the world’s top five chip foundries based in the U.S. The other four are Semiconductor Manufacturing International in China, Samsung with fabs in South Korea and the U.S., and United Microelectronics and TSMC, which are both in Taiwan.

“Not only do we have a high concentration of semiconductor manufacturing in Taiwan between TSMC and UMC, but TSMC is twice the size of the other four companies combined,” Caulfield said.

TSMC makes more than 90% of the world’s most-advanced microchips, creating vulnerability during supply chain backlogs as well as risks tied to China’s continued threats to invade Taiwan. Like GlobalFoundries, TSMC also makes older nodes. Caulfield said GlobalFoundries is absolutely going after TSMC.

“Not only do we have aspirations, we think in certain areas we’ve won,” Caulfield said. He pointed to his company’s radio frequency chips and silicon on insulator technology.

“Silicon on insulator is a huge differentiator when it comes to power, and TSMC doesn’t use that,” Moorhead said.

At a time of geopolitical turmoil, GlobalFoundries is investing about $7 billion to add capacity in parts of the world with lower risk.

In Singapore, the company just completed a $4 billion expansion that it says makes it the country’s most-advanced fab. In June, it finalized a deal with STMicroelectronics to build a jointly owned fab in Crolles, France.

Not all global expansion endeavors have gone smoothly, however. In 2017, GlobalFoundries made big plans for a fab in Chengdu, China. In 2020, it backed out.

“It turned out we had three relatively large facilities around the world already that were severely underloaded,” Caulfield said. “Adding more capacity at a time when we couldn’t fill our existing capacity was just going to create a bigger economic hole for us.”

The U.S. has recently enacted a series of export bans on chip companies sending advanced tech to China. By only producing older nodes, GlobalFoundries says it’s been “very minimally” impacted.

Making chips in the U.S.

Although GlobalFoundries’ chips are considered legacy nodes, the process and resources needed are still incredibly complex. Caulfield said each silicon wafer goes through at least 1,000 steps over 90 days in the Malta fab. The process requires extensive cleaning, cooling and chemical treatment, which uses a lot of water. GlobalFoundries says Fab 8 uses about 4 million gallons of water a day, reclaiming 65% of that.

“Upstate New York is a very good place for access to high-quality and abundant water,” Caulfield said.

All the heavy machinery also requires about 2 gigawatts of power per day, according to Hui Peng Koh, who heads up the Malta fab. She said it’s enough power to “run a small city.”

“I would say our lowest-cost power is in the U.S.,” Caulfield said. “A lot of our power in upstate New York, where this facility is at, comes from hydroelectric, so it’s a greener power. In both Europe and Singapore, much of that power comes off of natural gas.”

Then there’s the manpower. GlobalFoundries has 13,000 employees worldwide. About 1,500 people report to Koh in Malta. She told CNBC it’s “challenging to attract talent to this part of the world.”

GlobalFoundries recently established the first apprenticeship program that’s registered in the U.S. to help develop a semiconductor workforce in Vermont and New York. In July, TSMC blamed a shortage of skilled labor for delays to its fab being built in Arizona.

The high cost of materials and construction work also make building a fab in the U.S. more expensive than in much of Asia, so public subsidies have been key for reshoring production. GlobalFoundries said New York pitched in more than $2 billion for the Malta fab. The company also applied for funds from the $52 billion national CHIPS and Science Act. Focusing on 12-nanometer and above also helps the company keep costs down.

GlobalFoundries’ Fab 8 in Malta, New York, where Equipment Engineering Manager Chris Belfi led CNBC’s Katie Tarasov on a tour on September 5, 2023.

GlobalFoundries said it’s putting out 400,000 wafers per year from its Malta fab. While Caulfield wouldn’t put a dollar figure on the wafers, he said at any given time, there’s “about a half-billion dollars worth of inventory that’s running over those 90 days to create product.”

GlobalFoundries’ main customers for this massive output of essential chips are the world’s largest fabless chip companies, including Qualcomm, AMD, NXP and Infineon.

Eventually, many of its chips end up in the auto, aerospace, and U.S. defense industries.

GlobalFoundries is known for making “specialty chips” in big, exclusive deals, like one with Lockheed Martin in June for onshoring production of certain chips, and a recent $3 billion agreement with the U.S. Department of Defense.

Newman said GlobalFoundries has around 50 such long-term agreements.

“Effectively they’re saying, ‘We will create a stable margin commitment capacity and if the market shifts, we’re going to stand by the letter of our agreement,'” he said.

For companies hit hardest by the chip shortage, a deal with GlobalFoundries is a hedge against it happening again. In February, General Motors set aside exclusive production capacity at the Malta fab.

“GM, their lines got held up for very low-cost components because they couldn’t get enough,” Moorhead said. “What GM decided is that this is too much supply chain risk. We’re going to go directly to GF.”

GlobalFoundries says automotive is one of its fastest-growing segments. It makes many different kinds of chips for cars: the microcontrollers for power seats, airbags and braking; the sensing chips for cameras and Lidar; and battery management chips for electric vehicles.

Meanwhile, the growth of GlobalFoundries’ smartphone business is decelerating, alongside an industrywide slowdown. GlobalFoundries laid off 800 employees in December and January, and issued weaker-than-expected revenue guidance for the third quarter.

“Smart mobile devices last year represented 46% of our revenue,” Caulfield said. “While it grew last year, it was 50% the year before. So we’ve been trying to build our other business and to get more balanced, rather than having such a high exposure to smart mobile devices.”

Technology

Global movement to protect kids online fuels a wave of AI safety tech

Published

10 hours ago

August 30, 2025

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Global movement to protect kids online fuels a wave of AI safety tech

Spotify, Reddit and X have all implemented age assurance systems to prevent children from being exposed to inappropriate content.

STR | Nurphoto via Getty Images

The global online safety movement has paved the way for a number of artificial intelligence-powered products designed to keep kids away from potentially harmful things on the internet.

In the U.K., a new piece of legislation called the Online Safety Act imposes a duty of care on tech companies to protect children from age-inappropriate material, hate speech, bullying, fraud, and child sexual abuse material (CSAM). Companies can face fines as high as 10% of their global annual revenue for breaches.

Further afield, landmark regulations aimed at keeping kids safer online are swiftly making their way through the U.S. Congress. One bill, known as the Kids Online Safety Act, would make social media platforms liable for preventing their products from harming children — similar to the Online Safety Act in the U.K.

This push from regulators is increasingly causing something of a rethink at several major tech players. Pornhub and other online pornography giants are blocking all users from accessing their sites unless they go through an age verification system.

Porn sites haven’t been alone in taking action to verify users ages, though. Spotify, Reddit and X have all implemented age assurance systems to prevent children from being exposed to sexually explicit or inappropriate materials.

Such regulatory measures have been met with criticisms from the tech industry — not least due to concerns that they may infringe internet users’ privacy.

Digital ID tech flourishing

At the heart of all these age verification measures is one company: Yoti.

Yoti produces technology that captures selfies and uses artificial intelligence to verify someone’s age based on their facial features. The firm says its AI algorithm, which has been trained on millions of faces, can estimate the age of 13 to 24-year-olds within two years of accuracy.

The firm has previously partnered with the U.K.’s Post Office and is hoping to capitalize on the broader push for government-issued digital ID cards in the U.K. Yoti is not alone in the identity verification software space — other players include Entrust, Persona and iProov. However, the company has been the most prominent provider of age assurance services under the new U.K. regime.

“There is a race on for child safety technology and service providers to earn trust and confidence,” Pete Kenyon, a partner at law firm Cripps, told CNBC. “The new requirements have undoubtedly created a new marketplace and providers are scrambling to make their mark.”

Yet the rise of digital identification methods has also led to concerns over privacy infringements and possible data breaches.

“Substantial privacy issues arise with this technology being used,” said Kenyon. “Trust is key and will only be earned by the use of stringent and effective technical and governance procedures adopted in order to keep personal data safe.”

Child-safe smartphones

The wave of new tech emerging to prevent children from being exposed to online harms isn’t just limited to software.

Earlier this month, Finnish phone maker HMD Global launched a new smartphone called the Fusion X1, which uses AI to stop kids from filming or sharing nude content or viewing sexually explicit images from the camera, screen and across all apps.

The phone uses technology developed by SafeToNet, a British cybersecurity firm focused on child safety.

Finnish phone maker HMD Global’s new smartphone uses AI to prevent children from being exposed nude or sexually explicit images.

HMD Global

“We believe more needs to be done in this space,” James Robinson, vice president of family vertical at HMD, told CNBC. He stressed that HMD came up with the concept for children’s devices prior to the Online Safety Act entering into force, but noted it was “great to see the government taking greater steps.”

The release of HMD’s child-friendly phone follows heightened momentum in the “smartphone-free” movement, which encourages parents to avoid letting their children own a smartphone.

Going forward, the NSPCC’s Govender says that child safety will become a significant priority for digital behemoths such as Google and Meta.

The tech giants have for years been accused of worsening mental health in children and teens due to the rise of online bullying and social media addiction. They in return argue they’ve taken steps to address these issues through increased parental controls and privacy features.

“For years, tech giants have stood by while harmful and illegal content spread across their platforms, leaving young people exposed and vulnerable,” she told CNBC. “That era of neglect must end.”

Technology

‘AI may eat software,’ but several tech names just wrapped a huge week

Published

20 hours ago

August 29, 2025

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'AI may eat software,' but several tech names just wrapped a huge week

A banner for Snowflake Inc. is displayed at the New York Stock Exchange to celebrate the company’s initial public offering on Sept. 16, 2020.

Brendan McDermid | Reuters

MongoDB’s stock just closed out its best week on record, leading a rally in enterprise technology companies that are seeing tailwinds from the artificial intelligence boom.

In addition to MongoDB’s 44% rally, Pure Storage soared 33%, its second-sharpest gain ever, while Snowflake jumped 21%. Autodesk rose 8.4%.

Since generative AI started taking off in late 2022 following the launch of OpenAI’s ChatGPT, the big winners have been Nvidia, for its graphics processing units, as well as the cloud vendors like Microsoft, Google and Oracle, and companies packaging and selling GPUs, such as Dell and Super Micro Computer.

For many cloud software vendors and other enterprise tech companies, Wall Street has been waiting to see if AI will be a boon to their business, or if it might displace it.

Quarterly results this week and commentary from company executives may have eased some of those concerns, showing that the financial benefits of AI are making their way downstream.

MongoDB CEO Dev Ittycheria told CNBC’s “Squawk Box” on Wednesday that enterprise rollouts of AI services are happening, but slowly.

“You start to see deployments of agents to automate back office, maybe automate sales and marketing, but it’s still not yet kind of full force in the enterprise,” Ittycheria said. “People want to see some wins before they deploy more investment.”

Revenue at MongoDB, which sells cloud database services, rose 24% from a year earlier to $591 million, sailing past the $556 million average analyst estimate, according to LSEG. Earnings also exceeded expectations, as did the company’s full-year forecast for profit and revenue.

MongoDB CEO Dev Ittycheria on Q2 results: The opportunity in front of us is massive

MongoDB said in its earnings report that it’s added more than 5,000 customers year-to-date, “the highest ever in the first half of the year.”

“We think that’s a good sign of future growth because a lot of these companies are AI native companies who are coming to MongoDB to run their business,” Ittycheria said.

Pure Storage enjoyed a record pop on Thursday, when the stock jumped 32% to an all-time high.

The data storage management vendor reported quarterly results that topped estimates and lifted its guidance for the year. But what’s exciting investors the most is early returns from Pure’s recent contract with Meta. Pure will help the social media company manage its massive storage needs efficiently with the demands of AI.

Pure said it started recognizing revenue from its Meta deployments in the second quarter, and finance chief Tarek Robbiati said on the earnings call that the company is seeing “increased interest from other hyperscalers” looking to replace their traditional storage with Pure’s technology.

‘Banger of a report’

Reports from MongoDB and Pure landed the same week that Nvidia announced quarterly earnings, and said revenue soared 56% from a year earlier, marking a ninth-straight quarter of growth in excess of 50%.

Nvidia has emerged as the world’s most-valuable company by selling advanced AI processors to all of the infrastructure providers and model developers.

While growth at Nvidia has slowed from its triple-digit rate in 2023 and 2024, it’s still expanding at a much faster pace than its megacap peers, indicating that there’s no end in sight when it comes to the expansive AI buildouts.

“It was a banger of a report,” said Brad Gerstner CEO of Altimeter Capital, in an interview with CNBC’s “Halftime Report” on Thursday. “This company is accelerating at scale.”

Meta changes teen AI chatbot responses as Senate begins probe into ‘romantic’ conversations

Published

21 hours ago

August 29, 2025

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Meta changes teen AI chatbot responses as Senate begins probe into 'romantic' conversations

Meta Platforms CEO Mark Zuckerberg departs after attending a Federal Trade Commission trial that could force the company to unwind its acquisitions of messaging platform WhatsApp and image-sharing app Instagram, at U.S. District Court in Washington, D.C., U.S., April 15, 2025.

Nathan Howard | Reuters

Meta on Friday said it is making temporary changes to its artificial intelligence chatbot policies related to teenagers as lawmakers voice concerns about safety and inappropriate conversations.

The social media giant is now training its AI chatbots so that they do not generate responses to teenagers about subjects like self-harm, suicide, disordered eating and avoid potentially inappropriate romantic conversations, a Meta spokesperson confirmed.

The company said AI chatbots will instead point teenagers to expert resources when appropriate.

“As our community grows and technology evolves, we’re continually learning about how young people may interact with these tools and strengthening our protections accordingly,” the company said in a statement.

Additionally, teenage users of Meta apps like Facebook and Instagram will only be able to access certain AI chatbots intended for educational and skill-development purposes.

The company said it’s unclear how long these temporary modifications will last, but they will begin rolling out over the next few weeks across the company’s apps in English-speaking countries. The “interim changes” are part of the company’s longer-term measures over teen safety.

TechCrunch was first to report the change.

Last week, Sen. Josh Hawley, R-Mo., said that he was launching an investigation into Meta following a Reuters report about the company permitting its AI chatbots to engage in “romantic” and “sensual” conversations with teens and children.