GlobalFoundries Faces Heightened Competition From East Asia

GlobalFoundries is vying for third place among contract semiconductor manufacturers, or foundries. It focuses on specialty products that perform narrower sets of tasks compared with the most advanced processors. These tasks range from storing small bits of data for very long periods to regulating electricity flows. GF has relinquished development of cutting-edge chips like smartphone and data center processors owing to financial, scale, and personnel constraints. Many of GF’s offerings are commoditized as they are fabricated on process technologies first debuted over a decade ago. Customers can obtain close substitutes at other chipmakers barring major shortages, which limits GF’s pricing power.