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Abu Dhabi chip co struggles to be profitable

Posted: 11 May 2012 ?? ?Print Version ?Bookmark and Share

Keywords:wafer supply? semiconductor unit? 28nm chips?

Advanced Technology Investment Co. (ATIC), the semiconductor unit of the Abu Dhabi government's Mubadala investment fund, has been in the red for two straight years. The company now has accumulated a deficit that stood at about $1.12 billion at the end of 2011, according to a report by the Reuters news service that cited a regulatory filing.

In the filing, Mubadala said there can be no assurance that ATIC will be profitable in 2012 or subsequent years, according to the Reuters report.

ATIC is the parent company of Globalfoundries Inc. The firm became the sole owner of the former chip manufacturing unit of Advanced Micro Devices Inc. (AMD) last year, when AMD gave up its remaining stake in Globalfoundries in exchange for the right to have 28nm products built by other foundries. Previously a clause in the wafer supply agreement between AMD and Globalfoundries required that AMD have certain 28nm chips built by Globalfoundries.

In addition to Globalfoundries, ATIC is also one of several investors in Calxeda, a developer of low power server chips.

Globalfoundries, which does not report financial results, agreed to amend the wafer supply agreement with AMD after a tumultuous period in the relationship between the two companies. AMD said last year that low yields on 32nm products built by Globalfoundries hurt AMD's sales.

Many observers interpreted the new supply agreement with AMD as a blow to Globalfoundries. However, AMD has said that, despite the amended wafer supply agreement, it expects to spend more on wafers with Globalfoundries in 2012 than it did in 2011. Others have speculated that the decoupling from AMD will enable Globalfoundries to land deals with customers who were previously wary of doing business with a foundry partially owned by a competitor.

Globalfoundries plans to significantly increase its production capacity later this year when its Fab 8 in upstate New York ramps to volume production. U.S. President Barack Obama was to have visited Fab 8 Tuesday (May 8), but the visit was moved to the nearby CNSE NanoTech Complex at the State University of New York in Albany for what the White House termed "logistical reasons."

- Dylan McGrath
??EE Times

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