GlobalFoundries intends to choose Morgan Stanley as the IPO underwriter

Since the beginning of this year, news about GlobalFoundries’ plans to go public has been circulating, but GlobalFoundries officials have basically made no comments on this matter.

According to Bloomberg, GlobalFoundries is likely to choose to cooperate with Morgan Stanley as the listed underwriter and is currently negotiating to reach a relevant agreement. Once GlobalFoundries conducts an IPO, its valuation will reach $30 billion. The valuation of $30 billion is also higher than the previously reported $20 billion, and the time is more than a month apart. The increase in the valuation is a bit surprising. However, some sources pointed out that the negotiations between GlobalFoundries and Morgan Stanley have not yet reached a conclusion, there are still variables, and Morgan Stanley also said that it is not ready to comment on this matter.

“Industrie: Werk GLOBALFOUNDRIES Dresden, Deutschland” by MWM Energy is licensed under CC BY-NC-ND 2.0

Due to the outbreak of the coronavirus epidemic, which has led to changes in work, entertainment, and education, the global demand for semiconductors has reached unprecedented heights. The high demand for consumer electronics is also driving the research and development of advanced processes of 14nm or below, and the expansion of production capacity.

However, unlike Taiwan Semiconductor Manufacturing Co. Ltd and Samsung, since GlobalFoundries decided to cancel the research and development of the 7nm process node in 2018, it has not promoted the application of cutting-edge processes and has been stuck at the 12nm process node, while focusing on various special processes. In addition, GlobalFoundries raised $1.4 billion this year to increase production capacity. GlobalFoundries is expected to increase its production capacity by 13% this year and 20% next year.

If GlobalFoundries is finally listed, it is necessary to explain to investors the application requirements of the current mature process node and inform the latest development plan. Otherwise, the rising high valuation is difficult to be convincing enough.