Just recently, Qualcomm agreed to purchase an additional $4.2 billion worth of semiconductor chips from the New York factory of Global Foundries, a semiconductor foundry company, which will bring its total purchase amount to $7.4 billion by 2028.
In fact, this additional purchase transaction expands the previous agreement between Qualcomm and GlobalFoundries worth 3.2 billion dollars. The two companies will jointly produce chips for 5G transceivers, WiFi, cars and the Internet of Things.
As we all know, lattice core plays a very important role in semiconductor ecosystem. Over the years, the company has always been a major supplier of AMD, producing advanced semiconductor chips for AMD. However, in 2018, the company abandoned its plan to develop 7nm technology to compete with Samsung and TSMC. This decision ultimately cost AMD quite a lot of business, but allowed it to focus on more diversified process technologies, which are targeted at areas that do not require cutting-edge silicon, including radio communications, imaging, optics, automotive, industry and the Internet of Things.
In fact, even today, GlobalFoundries is the world's third largest chip foundry in terms of revenue, second only to TSMC and Samsung Electronics. However, if Samsung's foundry business of producing chips for other businesses under the company is excluded, GlobalFoundries will rank second.
GlobalFoundries is majority owned by Abu Dhabi sovereign wealth fund Mubadala Investment Co. Last year, it was listed in the NASDAQ IPO (initial public offering) and raised $2.6 billion.
The editor also found that the latest cooperation was based on the long-term cooperation between Gridwick and Qualcomm. In 2021, Qualcomm's subsidiaries signed a long-term contract with them to manufacture parts in the Grizzly's factory in Dresden, Germany. After that, the two sides will expand their cooperation, including making use of the additional capacity of Lattice in the Crore wafer factory in France, and producing 8SW RF insulator silicon technology for medium frequency 5G communication in the Singapore factory.
In other words, Qualcomm was one of the first customers to sign a long-term agreement covering multiple regions and technologies in 2021. Thomas Caulfield, CEO of GlobalFoundries, said in a statement that for the company's factories in northern New York, having long-term customers like Qualcomm, together with financial support from the U.S. federal and state governments, will help expand the company's U.S. manufacturing business.
In retrospect, the United States Senate passed a comprehensive legislation last month to subsidize the semiconductor industry in the United States. Its content is to provide about US $52 billion in government subsidies for semiconductor production, and provide investment tax credits for chip factories with an estimated value of up to US $24 billion. At the same time, the EU has also relaxed the financing rules for innovative semiconductor factories to boost its chip industry and reduce its dependence on American and Asian suppliers.
To this end, Intel and Geochip have announced their expansion plans in the European and American markets to make full use of these subsidies. Lattice has cooperated with Italian French Semiconductor to build a semiconductor factory in France with an investment of 5.7 billion dollars.
In general, the above two agreements between Qualcomm and Geochip will last until 2028, which is a long-term agreement for both parties. It can ensure that chip procurement will be stable in the next few years, and that there will be no shortage, price increase or instability like in the past two years when production capacity is tight. From the perspective of the supply chain, it reflects a certain positive significance.
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