May 31, 2017 / 11:55 AM / 3 years ago

GlobalFoundries aims to double Japan revenue, attack TSMC's market lead

(Company clarifies timeline for production with 7nm process technology; updates with new name of company owner)

TOKYO (Reuters) - GlobalFoundries, the world’s second largest contract chipmaker, aims to double its revenue from Japan over the next few years by launching cheaper chips for newer uses that will help it claw market share from a dominant Taiwanese rival, a senior executive said.

The California-based private company, owned by Abu Dhabi investment fund Mubadala, will target clients in the automotive sector, in smartphone camera systems and the so-called internet of things to achieve its revenue goal, Gregg Bartlett, senior vice president, said.

GlobalFoundries will be up in Japan against Taiwan Semiconductor Manufacturing Co, the world’s biggest contract chipmaker, which is estimated to have the lion’s share of the market.

Globally, TSMC had a 54.5 percent share in 2016 of the contract chipmaker market, followed by GlobalFoundries with an 8.6 percent share, according to research firm Gartner. In Japan, the California-based company’s share is even lower.

Japanese clients are also generally loathe to switch foundries with whom they have built long-term relationships.

Still, with cars increasingly being automated and data centers needing enhanced capacity, Bartlett was confident of growth for GlobalFoundries in Asia’s second-biggest economy, telling Reuters in an interview on Wednesday that it was a “very important market” for the firm.

GlobalFoundries’ Japan push comes as it is in the midst of boosting its global presence. Toward this end, it announced in February a $10 billion project in China, the world’s largest semiconductor market, to build a factory in the city of Chengdu.

It is also aiming to have first production “tape out” with the next-generation 7-nanometer process technology in the second quarter 2018 and is expecting production to start in 2019, a spokeswoman said.

Reporting by Makiko Yamazaki and Kentaro Hamada; Editing by Muralikumar Anantharaman

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