GlobalFoundries is NOT for sale!

[Daniel Nenni]

Probably the best news this week:

GlobalFoundries and its Fab 8 computer chip factory in Saratoga County are not for sale, despite news reports and speculation that its Abu Dhabi parent company was looking to sell off all or a portion of the semiconductor company to raise cash. The denial of a potential sale was made by Khaldoon Khalifa Al Mubarak, the U.S.-educated CEO of Mubadala Development Co., the Abu Dhabi investment fund that owns GlobalFoundries.

Abu Dhabi fund chief says GlobalFoundries not for sale - Times Union

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Abu Dhabi's state-owned fund Mubadala has no plans to sell contract chipmaker Globalfoundries or United Arab Emirates satellite operator Yahsat, its chief executive Khaldoon Khalifa al-Mubarak told Reuters on Monday.

"We are not in a distressed situation," Mubarak said on the sidelines of a business conference. "We'll keep those businesses."

Abu Dhabi's Mubadala says no plans to sell Globalfoundries, Yahsat
| Reuters

So we can put this rumor to rest now, right?

Because the pure-play foundry business needs another leading edge competitor and that is GlobalFoundries...

D.A.N.

 

[hist78]

The original Reuters news report is at:
Abu Dhabi's Mubadala says no plans to sell Globalfoundries, Yahsat
| Reuters

I think the Times Union article stretched the Reuters report a little bit. The Times Union's article said neither the Globalfoundries nor the Fab 8 in Saratoga County, NY are for sale. Actually Reuters' reporting didn't talk about Fab 8 at all.

 

[Daniel Nenni]

When the First story broke that GF was for sale I looked into it and was told by a confidential source that while it was true that they did a "sale feasibility study" the decision was not to sell. To me this confirms it but of course anything could happen in this crazy M&A cycle we are in right now.

 

[Brianhayes]

"We are not in a distressed situation," Mubarak said on the sidelines of a business conference. "We'll keep those businesses."
So we can put this rumor to rest now, right?
D.A.N.

For me the translation of this spin is, "We haven't found a buyer although we can't conceal that we are under pressure for other uses of our money".

I don't see how they can have the volumes they need to be profitable, though admittedly I can find no financials reported since 2010, when negative cash flow was $1.3bn and they certainly could not fund the Capex needed to stay in the game. Since then Abu Dhabi has spent $x? billions and are now saying, "We are not in a distressed situation" without, of course, publication of the financials. I can't see them staying with TSMC if oil money dries up. Most if not all of the big names are tied into Samsung or TSMC and I don't see any capacity shortage in this recession.

It's tough but Morris Chang told his analysts that they could expect him to beat the semi market by a "premium" of 5-7% because, "We are everybody's foundry and we participate with the successful companies." If he is right, which I believe him to be, he is draining the waterhole.