iSuppli weighs in on Chartered acquisition

Over the Labor Day weekend, ATIC entered an agreement to purchase Singapore's Chartered Semiconductor. The deal should bring GlobalFoundries and Chartered under one roof—a big deal for the independent semiconductor foundry market. Research firm iSuppli has now weighed in on the deal with a few observations and predictions.

According to iSuppli, the acquisition will turn the combined entity into the world's second-biggest "pure-play" foundry. Add up GlobalFoundries' and Chartered's revenue over the first half of this year, and you get $1.16 billion. TSMC, the biggest player in the independent foundry business, posted $3.3 billion over the same time period, while UMC recorded $1.01 billion. In terms of market share, iSuppli says TSMC had 47.7% of the market, while UMC had 14.6%, and GlobalFoundries and Chartered would have represented 16.7% together.

The deal will also address "a number of glaring weaknesses Globalforundries has in terms of service and its ability to produce in bulk," iSuppli adds. The research firm elaborates:

The new Chartered/Globalfoundries entity will immediately be able to build on the strengths of Chartered's infrastructure and customer base to challenge for additional customers.

Specifically, Globalfoundries, which prior to the acquisition had just one 300mm facility capable of producing bleeding edge products, will now have two operational 300mm facilities and five 200mm factories, enabling the pure-play to cover all technology nodes.

But equally important is that Globalfoundries now has a presence in Asia, Europe and in North America, where the company recently broke ground on a new factory.

As iSuppli points out, GlobalFoundries will be able to tap Chartered's bulk silicon manufacturing technology, as well. That said, pre-spinoff AMD roadmaps called for a 45-nm bulk silicon ramp from the early second quarter through the early fourth quarter, and the Chartered acquisition also won't close until the fourth quarter.

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