GlobalFoundries completed its initial public offering of 55 million shares at $47 a share, at the high end of its Oct. 19 range (see 2110190004), said the wafer company Monday. The stock trades on the Nasdaq under the ticker symbol GFS. With the IPO complete, Abu Dhabi investment group Mubadala owns 89.4% of GF’s voting shares.
The industry shipped more semiconductor units in Q3 than during any previous quarter on record, ramping up production to mitigate the global chips crunch, reported the Semiconductor Industry Association Monday. Global sales of $144.8 billion were up 27.6% year over year and 7.4% higher sequentially, said SIA. Year-over-year Q3 sales increased 33.5% in the Americas, and were up 32.3% in Europe, 27.2% in Asia Pacific, 24.5% in Japan and 24% in China, it said.
New draft text of the congressional budget reconciliation bill includes a tax credit to incentivize advanced semiconductor manufacturing to help “strengthen” U.S. supply chains, said the Semiconductor Industry Association Thursday. The incentive, included in the reconciliation package released Thursday by congressional Democrats, would create an investment tax credit of up to 25% for advanced manufacturing facilities and for eligible components. It would apply to plants that begin construction before 2027. The credit “would help keep America on top in this foundational technology and strengthen U.S. chip supply chains by boosting domestic semiconductor production and innovation,” said Qorvo CEO Bob Bruggeworth, who chairs SIA's board. The credit was originally part of the Facilitating American-Built Semiconductors (Fabs) Act introduced in June. SIA President John Neuffer said fully funding the Chips Act would "turbocharge American leadership in the game-changing technologies of today and tomorrow.”
Economic conditions for worldwide automotive demand “are likely to remain favorable during the rest of the year,” said Harald Wilhelm, Daimler chief financial officer, on a Q3 call Friday. “One must assume, however, that strained supply chains and bottlenecks for key components will continue to have a considerable impact on worldwide vehicle production in the fourth quarter.” The company continues to expect “a gradual normalization of the semi supply chain situation” in Q4, said Wilhelm. But he cautioned that “visibility” into “how the supply situation will actually develop further is still low, and suppliers are having problems making firm commitments.” Virtually all tech and automotive companies expect that the “overriding structural shortage” of semiconductors will “remain an issue for 2022, but should improve compared to 2021,” he said.
Ford’s Q4 financial metrics will be lower than “previously assumed in the back half of the quarter, and that's the result of chip constraints,” said Chief Financial Officer John Lawler on a Q3 earnings call Thursday. “We do expect free cash flow to increase with higher production, and the associated improvement in supplier payables.” Ford for 2022 “is likely to experience some industry crosswinds that could drive a range of outcomes,” he said. Vehicle production is expected to fall “significantly below our capacity” next year due to the chip shortage, said Lawler. “It's difficult to predict the interplay between semiconductor-related constraints, volume and pricing, and this will continue to remain dynamic.” Ford also will likely encounter many “inflationary costs” for raw materials and freight in 2022, he said, “but it's too early to size that right now.” Based on Ford's "current assessment," it predicts vehicle production will rise about 10% in 2022, "but that number is very dynamic and changes almost weekly," said Lawler. "We're doing everything we can to get our hands on as many chips as we can." The chip shortage "could extend into 2023," though at reduced "scope and severity," he said.
Automaker production shortfalls induced by the global chip shortage sent SiriusXM “new car trial stats” tumbling 21% in Q3 from the second quarter's “record high,” said CEO Jennifer Witz on a call Thursday. Used car trial stats fell 6% sequentially. “This means that in the fourth quarter, we'll see more than a million fewer conversion opportunities than we saw in the third quarter,” she said. “Most automakers and industry forecasters believe the timeline to recover from supply chain-related issues is sometime between mid-year 2022 and early 2023. Most expect recovery from these issues to be gradual next year, as opposed to a sharp bounceback.”
Suspensions and curtailments in vehicle production sparked by the global chip shortage sent General Motors' Q3 revenue plunging nearly 25% year over year to $26.8 billion, reported the automaker Wednesday. The stock closed 5.4% lower Wednesday at $54.26. “Adjusted automotive free cash flow was negative $4.4 billion during the quarter, due to higher work-in-process inventory related to vehicles produced without certain modules and working capital impacts from plant downtime and lower production levels as a result of the ongoing semiconductor shortage,” said Chief Financial Officer Paul Jacobson on a quarterly earnings call. GM expects “sequentially higher volumes” of vehicle production in Q4, “despite some ongoing volatility in the supply chain, which our teams continue to work to mitigate,” said the CFO. GM expects in Q4 to “clear the majority” of its unfinished-vehicle inventory, but anticipates that some of that inventory "will remain at year-end,” he said.
The order backlog at Nordic Semiconductor “keeps increasing,” said CEO Svenn-Tore Larsen on a Q3 earnings call Thursday. It ended the quarter with a $1.3 billion backlog, “basically four times the backlog the same time last year,” he said. The chipmaker now worries its backlog will “stretch into '23,” he said. “The challenge we have at Nordic is to focus on the customer situation. We need to ensure we can give the Tier-1s the opportunity to grow the same as we keep our longtail customers happy.” The challenge is “very difficult with this constrained supply situation, but that's what we work on every day,” he said.
GlobalFoundries expects to price its initial public offering at $42-$47 per share when it becomes effective, said the chipmaker’s amended F-1 registration statement Tuesday at the SEC. Of the 55-million-share IPO, GF is selling 33 million shares and its sole shareholder, Abu Dhabi investment group Mubadala is offering the rest. Mubadala will own 89.4% of GF’s voting power after the IPO is complete, said the filing. GF filed for the IPO Oct. 4, saying it plans to use the net proceeds for capital expenditures and other general corporate purposes, including possible acquisitions (see 2110050006).
Global silicon wafer shipments are expected to reach 16.04 billion square inches in 2024, with growth in area terms of more than 37% from 2019, reported Semi Monday. It’s projecting 2021 shipments will approach 14 billion square inches, for 13.9% year-over-year growth from 2020. The logic, foundry and memory sectors are contributing most to the 2021 silicon shipment expansion, it said. Strong “secular demand” for semiconductors across “multiple end markets” is driving the significant increase in wafer shipments, said analyst Inna Skvortsova. She cautioned that growth after 2022 “could be tempered by the slowing pace of the macroeconomic recovery and timing of the wafer manufacturing capacity additions needed to meet growing demand.”