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Global Foundries files for IPO

Any guesses on who these top GF customers are?

image (7).png
 
This is from the F-1. The order seems to match.

"In the first six months of 2021, our top ten customers, based on wafer shipment volume, included some of the largest semiconductor companies in the world: Qualcomm Inc. (“Qualcomm”), MediaTek Inc. (“MediaTek”), NXP Semiconductors N.V. (“NXP”), Qorvo, Inc. (“Qorvo”), Cirrus Logic, Inc. (“Cirrus Logic”), Advanced Micro Devices, Inc. (“AMD”), Skyworks Solutions, Inc. (“Skyworks”), Murata Manufacturing Co., Ltd. (“Murata”), Samsung Electronics Co., Ltd. (“Samsung”) and Broadcom Inc. (“Broadcom”)."
 
I find it surprising that GF is still losing money.
  1. The company's revenues for the first six months of 2021 were $3bn, up 13 per cent from the year-ago period, and reduced its losses from $534m to $301m. GlobalFoundries had $805m in cash on hand, and debt of $2.18bn.
 
What is the big surprise is they seem to be pricing their wafers below cost. The filing says the utilization rate was ~80% for last 3 years so its not underutilization. Either their yields are really poor, or their prices are too low versus the technology cost??

=========================

Our average shipment utilization rate across our 300mm fabs was 80%, 70% and 84% for the years ended December 31, 2018, 2019 and 2020, respectively.

1633457565761.png
 
ChrisGar said:
I find it surprising that GF is still losing money.
  1. The company's revenues for the first six months of 2021 were $3bn, up 13 per cent from the year-ago period, and reduced its losses from $534m to $301m. GlobalFoundries had $805m in cash on hand, and debt of $2.18bn.
Click to expand...
I was surprised at how bad the previous years were and the GM. I think Daniel was right, they appear to have massively cut capex. Depreciation is massively down for the year. I wonder how low they can really decrease it whilst still being a long term company. Even old machines need to be replaced once in a while. They need to either raise prices by 20% or cut depreciation in half agian to have a 10%+ op margin. Horrible financials
 
Andy1299 said:
I was surprised at how bad the previous years were and the GM. I think Daniel was right, they appear to have massively cut capex. Depreciation is massively down for the year. I wonder how low they can really decrease it whilst still being a long term company. Even old machines need to be replaced once in a while. They need to either raise prices by 20% or cut depreciation in half agian to have a 10%+ op margin. Horrible financials
Click to expand...
Andy, your depreciation comment is just an artifact of an accounting change starting 2021 and not in any way based on any form of reality. Further, its not at all related to capex cuts. In fact capex was up massively in 2021 vs 2020 due to build out of capacity for demand.

Hint: Doubling the estimated useful life of equipment automatically cuts depreciation cost run rates in half.
 
Bloomberg: How a Global Foundry Is Losing Money in a Chip Boom.
www.bloomberg.com

How a Global Foundry Is Losing Money in a Chip Boom

Companies should be raking in profits. That’s never going to happen if you lack the pricing power and factory utilization needed to make the most of the sunny weather.
www.bloomberg.com www.bloomberg.com

After reading GF's IPO filing at SEC, I'm wondering when their operations can start showing profit? If they can't make profit last year and this year while other top foundries are raising prices and can't produce enough chips, then when?

There are some structure weakness at GF we need to understand.
 
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