Chipmaker GlobalFoundries saw sales jump in its IPO application, paving the way for a blockbuster deal in a record year for initial public offerings (IPO) in the US.
GlobalFoundries, which is owned by Abu Dhabi’s sovereign wealth fund Mubadala Investment Company, has not yet set any terms for its listing but could aim for a valuation of around $ 25 billion, Reuters first reported in August.
The IPO, one of the hottest-anticipated deals of the year, is expected to round out a record year for IPOs after several other big names including Robinhood Markets Inc, Coinbase Global Inc and Roblox Corp benefited from the capital markets boom earlier in 2021.
In addition to electric vehicle maker Rivian’s IPO debut, GlobalFoundries is expected to lead an unusually busy year-end IPO schedule as companies seek to capitalize on investor appetites for IPOs by high-growth tech companies.
GlobalFoundries filed for an initial public offering of up to $ 1 billion on Monday, a wildcard number that is likely to change as the terms of the stock sale are set.
During the pandemic, the broader industry, which includes automakers and electronics manufacturers, was weakened by a global shortage of chips, causing production delays.
GlobalFoundries’ sales have been declining since 2018, but growth has rebounded over the past 12 months as global demand for chips skyrocketed.
“Although the imbalance between supply and demand is expected to improve in the medium term, the semiconductor industry will need a significant increase in investment to keep pace with demand,” said GlobalFoundries in the filing.
The chip maker is consolidating its product lines and announced that it will expand into new factories in the US and Singapore. GlobalFoundries plans to build a second factory near its headquarters in Malta, New York, and spend $ 1 billion to increase production.
The company’s net revenue for the six months ended June 30 was $ 3.04 billion, nearly 13 percent more than a year earlier. Net loss decreased to $ 301 million over the same period from $ 534 million a year ago.
GlobalFoundries was founded when Mubadala bought the manufacturing facilities of Advanced Micro Devices Inc. in 2009 and later merged Singapore’s Chartered Semiconductor Manufacturing Ltd. merged.
The company, which manufactures radio frequency communications chips for 5G, automotive and other specialized semiconductors, has Advanced Micro Devices and Broadcom Inc among its customers.
GlobalFoundries had originally targeted a listing in late 2022 or early 2023 but postponed the schedule to capitalize on the current IPO boom, people familiar with the matter said.
GlobalFoundries’ decision to go public is a clear sign that it is unwilling to accept a possible merger with Intel Corp or other potential buyers during the current chip boom.
The Wall Street Journal reported in July that Intel Corp. is considering a takeover of GlobalFoundries. It fell short of making a formal offer, Reuters reported in August.
GlobalFoundries feared that such a connection would anger some of its key customers, who are competitors of Intel, Reuters previously reported.
GlobalFoundries is the third largest foundry in the world by sales behind Taiwan Semiconductor Manufacturing Co Ltd and Samsung Electronics Co Ltd, but ranks second if you ignore Samsung’s foundry business, which makes chips for other elements of the South Korean company.
The US-based chip maker, which has invested approximately $ 23 billion in building five manufacturing facilities on three continents since it was founded in 2009, holds approximately 10,000 patents, according to its filing.
GlobalFoundries plans to list on the Nasdaq under the symbol “GFS”.
Morgan Stanley, BofA Securities, JP Morgan, Citigroup and Credit Suisse are the lead underwriters of the IPO.