GlobalFoundries, Mubadala raise $2.6bn in top-of-range IPO

Chipmaker GlobalFoundries and major shareholder Mubadala Investment Co. raised almost $2.6bn in an initial public offering, pricing its shares at the top of a marketed range.

The company and Mubadala sold 55 million shares Wednesday for $47 each after marketing them for $42 to $47, the company said.

At $47 a share, GlobalFoundries has a market value of more than $25bn based on the outstanding shares listed in its filings with the US Securities and Exchange Commission.

The listing is the third biggest on a US exchange this year, topped only by South Korean e-commerce firm Coupang’s $4.55bn IPO and Chinese ride-hailing company DiDi Global’s $4.44bn raise, according to data compiled by Bloomberg.

GlobalFoundries planned to sell 33 million shares while Abu Dhabi’s Mubadala was to sell 22 million shares, according to its filings with the US Securities and Exchange Commission. Mubadala will control more than 89 per cent of the company’s shares after the IPO.

Funds managed by BlackRock, Columbia Management Investment Advisers, Fidelity Management, an affiliate of Koch Industries and Qualcomm also indicated interest buying a combined $1.05bn of the shares in the offering as cornerstone investors, the filings show. Silver Lake separately agreed to purchase $75m of stock in a concurrent private placement at the IPO price.

The chipmaker was created by purchasing the manufacturing operations of Advanced Micro Devices in 2009 and later combining it with Singapore’s Chartered Semiconductor. Mubadala was planning for the business to be valued in a listing at around $30bn, Bloomberg News reported in July.

Chip Shortage

GlobalFoundries is appealing to public-market investors as interest in the semiconductor industry hits an all-time high. Shortages caused by a surge in demand for electronics during coronavirus pandemic lockdowns and insufficient supply have made chip factories more valuable to the economy.

For the first half of the year, GlobalFoundries had a net loss of $301m on revenue of about $3bn, compared with a loss of $534m on $2.7bn in revenue a year earlier, according to the filings.

Contract chipmakers like GlobalFoundries fabricate semiconductors for large technology companies such as Apple and Amazon.com. Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. currently dominate the market, and Intel Corp. has ambitions to become a bigger force in that area too.

GlobalFoundries previously gave up on the kind of leading-edge production that would match the capabilities of Taiwan Semiconductor or Samsung. Instead, it’s serving the market for less advanced chips, which are increasingly critical to carmakers and other industries.

The IPO is being led by Morgan Stanley, Bank of America Corp., JPMorgan Chase & Co., Citigroup and Credit Suisse Group. The company’s shares are expected to begin trading Thursday on the Nasdaq under the symbol GFS.