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GlobalFoundries, Mubadala Seek to Raise $2.6 Billion in IPO

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(Bloomberg) -- Chipmaker GlobalFoundries Inc. and major shareholder Mubadala Investment Co. plan to raise as much as $2.6 billion in a U.S. initial public offering.

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The company is marketing 33 million shares while Abu Dhabi’s Mubadala plans to sell 22 million shares, according to a filing with the U.S. Securities and Exchange Commission on Tuesday. The shares are being offered at $42 to $47 each, the filing showed. At the top of that range, GlobalFoundries would have a market value of $25 billion based on the outstanding shares listed in its filing.

Funds managed by BlackRock Inc., Columbia Management Investment Advisers, Fidelity Management, an affiliate of Koch Industries Inc. and Qualcomm Inc. have indicated interest to buy a combined about $1.05 billion of the shares in the offering as cornerstone investors, the filing showed.

Silver Lake has separately agreed to purchase $75 million of stocks in a concurrent private placement priced at the IPO price.

The chipmaker was created by purchasing the manufacturing operations of Advanced Micro Devices Inc. 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 $30 billion, 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 pandemic lockdowns and insufficient supply have made chip factories more valuable to the economy. The company said revenue rose 13% in the first half of the year.

Contract chipmakers like GlobalFoundries fabricate semiconductors for large technology companies such as Apple Inc. and Amazon.com Inc. 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 offering is being led by Morgan Stanley, Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc. and Credit Suisse Group AG. The company plans to list on the Nasdaq under the symbol GFS.

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