Analysis: Outpaced by TSMC, GloFo cuts its cloth
Globalfoundries' lack of business success at leading-edge of FinFET foundry work means it can no longer afford to pursue a twin FinFET and FDSOI development strategy any longer and is stopping all 7nm development. Putting it simply Globalfoundries has been outpaced by TSMC and as a result has had to take a long hard look at itself in the mirror. It has decided to cut its cloth according to its means but will its decision to go "differentiated" ultimately bring a reward?
Besides stopping development at the leading edge it has also done what may seem illogical and said it intends to invent the fab-lite foundry. That is the implication of dividing Globalfoundries' business between a foundry part and an ASIC development business that is free to go other foundries at 7nm and beyond. What we do not yet know is how significant a business that will be as a proportion of the whole. It seems unusual and may receive double-takes from potential customers before its receives their business.
If we also step back and look, is this radical rethink the beginning of end of Globalfoundries? Or the end of the beginning for a company that could go on to prosper?
Undoubtedly what we are seeing is a familiar process of re-alignment imposed on a chip manufacturing company because of the exponentially increasing cost of R&D at the leading edge – and certainly below 10nm – and the exceptional success of Taiwan Semiconductor Manufacturing Co. (Hsinchu, Taiwan) at meeting that demand in a timely manner.