GlobalFoundries to Shut Chengdu Wafer Fab

Article By : Yvonne Geng

GlobalFoundries has abandoned its wafer fab planned in Chengdu. The company filed official notices of closure...

GlobalFoundries (GF) has finally given up on its wafer fab planned in Chengdu. The company filed official notices of closure, along with documents certifying the last 74 employees will be offered severance pay.

The fab was never brought online, but GF held on to the possibility of opening it. As recently as half a year ago, when asked if GlobalFoundries remained committed to the plant, GF executive vice president of finance Tim Breen insisted that “the Chengdu factory will not be sold, this is just a market rumor.”

In 2016, GF and Chongqing municipality signed a memorandum formed a joint venture to set up a local plant. Shortly afterward, GF reported a large financial loss. The project was put on hold, and then collapsed entirely.  After the project fell through, Chongqing’s neighboring city Chengdu moved in to cut a deal with GlobalFoundries in late-2016.

In Feb 2017, GlobalFoundries announced that it would invest $10 billion to build an entirely new fab in Chengdu. The plan was to build the largest 12-inch logic device fab in mainland China. In June 2018, however, GF announced a global layoff and Chengdu plant recruitment was suspended. A few months later in October, GF canceled the investment in the Chengdu plant.

By early 2019, the company cleared out the installed equipment, and encouraged employees to find new jobs on their own.

Of the 10 fabs GF had, only 8 are currently operating, scattered across Vermont, New York, and Singapore (though Fab 3E has been sold), Germany, and China (the one just suspended).  The geographical dispersement is said to make it difficult for GF fabs to share resources or coordinate with each other. The situation is a natural consequence of the way GF grew – by acquiring fabs, rather than building its own.  There was rampant speculation that Israeli wafer foundry Tower Semiconductor (until recently known as TowerJazz) might acquire the Chengdu Gexin factory to expand the 12-inch RF SOI process. But in the end, it just remained a rumor.

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