MALTA -- Executives at GlobalFoundries announced on Wednesday they have successfully combined their operations with a Singapore-based computer chip maker, a move they said will help GlobalFoundries move up in the semiconductor world.
The Advanced Technology Investment Co., an investment corporation owned by the government of Abu Dhabi and a majority stakeholder in GlobalFoundries, announced in September plans to acquire Chartered Semiconductor Manufacturing so the companies could expand their reach and support one another.
Chartered shareholders approved the acquisition in November, and Singapore regulatory officials signed off on the merger in December, allowing Chartered and GlobalFoundries to move toward full integration.
The companies will now operate under the GlobalFoundries banner and will be led by Doug Grose, who will serve as chief executive officer.
In a news release announcing the completed integration on Wednesday, Grose said the companies combined customer base and assets will help GlobalFoundries establish itself as a leading player in the worldwide foundry industry.
Foundries, as they're called in the industry, support smaller computer chip designers that lack the ability or capital to develop the costly production facilities needed to make their products.
GlobalFoundries will have a total of eight such production facilities after the merger, including locations in Singapore, Germany and the new factory being built at the Luther Forest Technology Campus in Malta and Stillwater.
The company broke ground on the New York factory, now referred to by the company as Fab 8, in July 2009. It is expected to become operational in 2012.
GlobalFoundries stands to pick up more than 150 of Chartered's clients through the companies' merger, officials said.
Computer chip designers included on the company's roster now include Texas Instruments, Advanced Micro Devices, Qualcomm, STMicro and IBM.
Company officials suggested the merger, which cost ATIC nearly $4 billion in cash, shares and debt, would provide computer chip designers their first real alternative foundry option.
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The Taiwan Semiconductor Manufacturing Co. and the United Microelectronics Corp., both based in Taiwan, have long dominated the market.
"This new company has an incredible opportunity in front of us to not just offer an alternative, but become the preferred supplier for many of the world's top chip design companies," Chia Song Hwee, GlobalFoundries chief operating officer, said in a prepared statement.
The news comes as semiconductor sales continue their steady rebound after deflating during the recession.
The Semiconductor Industry Association reported earlier this month that worldwide sales climbed nearly 4 percent between October and November. The November mark was up 8.5 percent from the same month in 2008, according to the group.
For the first 11 months of 2009, however, sales were still down about 13 percent compared with 2009.
GlobalFoundries' stock is not publicly traded because the company is jointly owned by ATIC, of Abu Dhabi, and AMD.
But officials said in the release that GlobalFoundries and Chartered jointly produced more than $2 billion in revenues in 2009.
Grose, GlobalFoundries' CEO, also told The Wall Street Journal on Wednesday that he expected the company to see a double-digit rise in profits this year.
"We obviously have to grow and take market share and also have to bring in new customers who weren't part of Chartered or Globalfoundries," Grose told the newspaper.
AMD stock gained 50 cents per share in Wednesday trading, a 5.78 percent increase on the day, to close at $9.15. The Dow Jones industrial average rose 53.51 points to close at 10,680.77, a 0.5 percent increase, while the Nasdaq composite rose 25.59 points to close at 2,307.90, a 1.12 percent gain.