Abu Dhabi owned Global Foundries set to double capital expenditure to 120% of its revenues
Global Foundries, majority owned by Abu Dhabi, plans to double its capital expenditure to $5bn in 2011, as it expands its semiconductor business, the chief executive of its parent company said on Wednesday.
Ibrahim Ajami, CEO of Advanced Technology Investment Company (ATIC), which owns 86 percent of Global Foundries, also said that a contract for building a new semiconductor manufacturing facility in Abu Dhabi would be finalised by July this year.
Global Foundries, which spent $2bn in 2010, owns semiconductor units in Germany, New York and in Singapore, which is currently under expansion.
ATIC is wholly-owned by Abu Dhabi government's investment vehicle Mubadala Development Company.
"This year, Global Foundries will be spending $5 billion, which is 120 percent of its revenues. We are investing in our future," Ajami told Reuters in an interview at the Abu Dhabi Media Summit.
The firm earned revenues of $3.5 billion in 2010 and it is expected to reach $4 billion in 2011, he said.
Ground breaking for construction of the new $6 billion semiconductor facility in Abu Dhabi will start later this year with start-up production planned for 2015-16. But the facility will attain scale only in 2018-19.
Given the huge investment, the Abu Dhabi facility will have capacity of at least 100,000 silicon wafers per month.
"By creating a semi-conductors cluster in Abu Dhabi...this would contribute about 2 to 3 percent of Abu Dhabi's economy by 2030," said Ajami, referring to plans for other new technology projects.
The Abu Dhabi facility will be owned by Global Foundries, its ninth facility worldwide and it will also partly finance it. "The financing will be equity, debt and cash flows from operations," he said.
ATIC has so far spent $10 billion on acquisitions and expansion with funding from the Abu Dhabi government.