Home Technology Chipmaker GlobalFoundries Valued At $26 Billion In Lackluster Nasdaq Debut

Chipmaker GlobalFoundries Valued At $26 Billion In Lackluster Nasdaq Debut

0
Chipmaker GlobalFoundries Valued At $26 Billion In Lackluster Nasdaq Debut

Shares of GlobalFoundries Inc, which is owned by Abu Dhabi’s sovereign wealth fund Mubadala Funding Co, opened flat on the Nasdaq on Thursday, giving the chipmaker a market capitalization of about $26 billion.

GlobalFoundries completed its first day of buying and selling at $46.40, barely decrease than the $47 per share it priced within the preliminary public providing (IPO). The chip maker raised $2.6 billion within the third-largest IPO in the USA thus far this yr, trailing South Korean e-commerce big Coupang Inc and journey hailing firm Didi International Inc .

GlobalFoundries, which disclosed income development of 13% for the six months ended June 30, has benefited from surging demand for chips, resulting from a world scarcity that has pressured automakers and different electronics companies to chop manufacturing.

However the firm’s gross margins stay markedly decrease than different chipmakers at 10.8% within the six months ended June 30, effectively under the margins of 40% or extra loved by Taiwan Semiconductor Manufacturing Co or Intel Corp.

In an interview with Reuters, Chief Government Thomas Caulfield stated margins have already risen to 17% within the third quarter and are more likely to rise extra as the corporate invests $6.5 billion – a few of which comes from Thursday’s IPO – in its factories.

He stated these investments will assist GlobalFoundries benefit from brisk demand and that margins will preserve bettering “sooner or later quarters as we proceed to construct our capability with these investments.”

Caulfield stated demand is more likely to stay excessive for years, with acute shortages lasting into subsequent yr. “I believe it begins to get higher in 2023,” he stated.

Caulfield declined to touch upon reported takeover curiosity from Intel earlier this yr, saying the corporate is specializing in being “a standalone enterprise” with a give attention to growing radio-frequency (RF) and low-power applied sciences.

Regardless of the lukewarm inventory market reception for GlobalFoundries on Thursday, the IPO market in the USA has by no means been stronger. Quite a few different huge names corresponding to Coinbase International Inc, Robinhood Markets Inc and gaming platform Roblox have already gone public this yr.

Electrical-vehicle maker Rivian can be anticipated to listing its shares within the coming weeks.

U.S. IPOs, together with these of special-purpose acquisition firms (SPACs), have raised an all-time document of over $250 billion thus far this yr, in response to information from Dealogic.

RIDING ON CHIP DEMAND

GlobalFoundries was created when Mubadala purchased Superior Micro Gadgets Inc’s manufacturing amenities in 2009 and later merged it with Singapore’s Chartered Semiconductor Manufacturing Ltd.

The corporate, which makes radio-frequency communications chips for 5G, automotive, and different specialised semiconductors, counts AMD and Broadcom Inc amongst its prospects.

GlobalFoundries is the world’s third-largest foundry by income behind Taiwan Semiconductor Manufacturing Co Ltd and Samsung Electronics Co Ltd, however ranks second when stripping out Samsung’s foundry enterprise that makes chips for different parts of the South Korean agency.

Mubadala, which has a majority stake in GlobalFoundries, will maintain 89.4% of the corporate’s shares and voting energy after the providing.

Funds affiliated with Silver Lake have purchased practically $75 million value of shares as a part of a so-called personal placement held alongside the IPO.

Morgan Stanley, BofA Securities, J.P. Morgan, Citigroup and Credit score Suisse have been the lead underwriters for the IPO.

Learn all of the Newest Information, Breaking Information and Coronavirus Information right here. Observe us on Fb, Twitter and Telegram.


LEAVE A REPLY

Please enter your comment!
Please enter your name here