Chipmaker GlobalFoundries prices US IPO at upper end to raise US$2.6b

Oct 28, 2021

REUTERS [NEW YORK] Chipmaker GlobalFoundries said on Wednesday (Oct 27) it sold shares in its initial public offering (IPO) at US$47 a piece, at the higher end of its targeted price range, to raise about US$2.6 billion.

The IPO gives GlobalFoundries a valuation of about US$26 billion, making it one of the biggest stock market flotations of the year in the United States.

Abu Dhabi's sovereign wealth fund Mubadala Investment, which holds a majority stake in GlobalFoundries, sold 22 million shares in the IPO.

Funds associated with BlackRock, Fidelity Management & Research Company LLC, some affiliates of Koch Strategic Platforms LLC, Columbia Management Investment Advisers LLC and Qualcomm invested more than US$1 billion in the IPO.

The IPO comes at a time when demand for chips has sky-rocketed due to a global shortage that forced automakers and other electronics firms to cut production.

Strong demand for chips boosted revenue at GlobalFoundries over the past 12 months and helped it cut back losses.

One of the marquee listings of 2021, which included Coinbase Global, Robinhood Markets and Coupang, GlobalFoundries and electric-vehicle maker Rivian are headlining a particularly busy year-end for US IPOs.

The company was created when Mubadala bought Advanced Micro Devices's manufacturing facilities in 2009 and later merged it with Singapore's Chartered Semiconductor Manufacturing.

GlobalFoundries, which makes radio-frequency communications chips for 5G, automotive and other specialised semiconductors, counts AMD and Broadcom among its customers.

GlobalFoundries is the world's third-largest foundry by revenue behind Taiwan Semiconductor Manufacturing Co and Samsung Electronics, but ranks second when factoring out Samsung's foundry business that makes chips for other elements of the South Korean firm.

GlobalFoundries will list its shares on Nasdaq on Thursday under the ticker "GFS".

Morgan Stanley, BofA Securities, JPMorgan, Citigroup and Credit Suisse are the lead underwriters for the IPO.