The Globalfoundries Inc. semiconductor plant in Dresden, Germany Photo: VCG

 
Chipmaker GlobalFoundries revealed a jump in revenue in its filing for a stock market flotation, setting the stage for a blockbuster finish to a record year for IPOs in the US.

GlobalFoundries, which is owned by Abu Dhabi's sovereign wealth fund Mubadala Investment, has not set terms for its listing yet, but it could seek a valuation of about $25 billion, Reuters first reported in August. 

The IPO, one of the most hotly anticipated deals of the year, is expected to round out a record year for flotations, after several other big names such as Robinhood Markets, Coinbase Global and Roblox capitalized on the capital markets boom earlier in 2021.

Alongside electric-vehicle maker Rivian's stock market debut, GlobalFoundries is expected to headline an unusually crowded year-end IPO schedule, as companies look to make the most of sky-high investor appetite for listings of high-growth tech companies.

GlobalFoundries filed for an IPO on Monday of up to $1 billion, a placeholder figure that will likely change when terms of the share sale are set.

During the pandemic, the broader industry that includes automakers and electronics producers has been crimped by a global shortage of chips, which has caused manufacturing delays.

GlobalFoundries' revenue had been in decline since 2018, but over the past 12 months its growth rebounded as worldwide demand for chips skyrocketed.

"Although the supply-demand imbalance is expected to improve over the medium term, the semiconductor industry will require a significant increase in investment to keep up with demand," GlobalFoundries said in the filing.

The chipmaker has been consolidating its product lines and announced plans to expand into new factories in the US and Singapore. GlobalFoundries plans to build a second factory near its Malta, New York, headquarters, and spend $1 billion to boost output.

First-half net revenue was $3.04 billion, up nearly 13 percent from a year earlier. The net loss narrowed to $301 million from $534 million a year earlier.

GlobalFoundries was created when Mubadala bought Advanced Micro Devices' manufacturing facilities in 2009, and later merged it with Singapore's Chartered Semiconductor Manufacturing.

The company, which makes radio-frequency communications chips for 5G, automotive and other specialized semiconductors, counts Advanced Micro Devices and Broadcom among its customers.

GlobalFoundries was initially targeting a listing in late 2022 or early 2023 but moved up the timetable to capitalize on the current IPO boom, people familiar with the matter said.

Takeover target

GlobalFoundries' decision to file for an IPO is a clear sign that it is not eager to accept a potential merger with Intel or other potential buyers during the current chip boom.

The Wall Street Journal reported in July that Intel was weighing a buyout of GlobalFoundries. It stopped short of making a formal offer, Reuters reported in August.

GlobalFoundries was concerned such a tie-up would upset some of its key customers that are Intel's rivals, Reuters previously reported.

GlobalFoundries is the world's third-largest foundry by revenue behind Taiwan Semiconductor Manufacturing and Samsung Electronics, but it ranks second when factoring out Samsung's foundry business that makes chips for other elements of the South Korean firm.

The US-based chipmaker, which has invested about $23 billion to build five manufacturing facilities across three continents since the company was started in 2009, has about 10,000 patents, according to its filing.

GlobalFoundries plans to list on the Nasdaq under the symbol GFS.

Morgan Stanley, BofA Securities, J.P. Morgan, Citigroup and Credit Suisse are the lead underwriters for the IPO.