GlobalFoundries Shifts Strategy; Layoffs Likely In Malta

Aug 28, 2018

In a likely blow to New York’s Capital Region, GlobalFoundries has announced a new round of layoffs.

Layoffs are nothing new at GlobalFoundries: there have been periodic job cuts at the company's plants - in June, the company announced it was trimming its worldwide workforce of 18,000 employees by eight percent.

The latest round of layoffs, announced Monday, impacts GlobalFoundries' Fab 8 computer chip factory in the Saratoga County town of Malta which employs about 3,400.

James Wang is an analyst at New York City-based ARK Invest.    "Semi-conductor manufacturing is getting harder and harder and the move to 7 nanometer or 10 nanometer as in Intel's nomenclature has been much more difficult than people have anticipated. Intel has traditionally has been the leader in industry and they've struggled, they've been late over two, four years, to get to this manufacturing ability, and the only company in the world that has actually managed to do it is actually Taiwan's TSMC."

GlobalFoundries, headquartered in California, says it is shifting resources to improve and extend existing techniques, opting to concentrate its resources on its 14 nanometer chip making process.  Wang says "GlobalFoundries has been bankrolled by Middle Eastern companies, investment companies essentially, and I think they found that financial equation hard to tolerate. They invested in GlobalFoundries to make a profit rather than endure, you know, a decade plus of losses. So, they've essentially switched strategies so that they will now focus on more profitable existing lines of manufacturing, rather than this faraway, well, future technology that may be profitable but that's very expensive."

Saratoga County Chamber of Commerce President Todd Shimkus tells SPECTRUM News GlobalFoundries called Monday to tell the organization about the job cuts.  "Certainly we feel tremendously bad for the employees that are gonna be let go, that's traumatic. But we've got a very strong economy here, there's lots of job openings and places where good people can find good opportunities and I think we're gonna do everything we can as a community to help those folks."

There is no official word as to how many jobs in Malta will be cut, but published reports have said hundreds of people will be affected.

The Burlington Free Press reports a GlobalFoundries spokesperson says the impact will be “minimal” at the Fab 9 factory in Essex Junction, Vermont.

Assistant Dutchess County Executive Ron Hicks paints a different picture for GlobalFoundries' plant in the Hudson Valley.   "Their shift in strategy primarily impacts operations in the Capital Region. GlobalFoundries Fab 10 in East Fishkill manufactures technology down to the 14 nanometer mode node, which GlobalFoundries has announced they intend to focus on moving forward. So while we're saddened by the new that's happening in the Capital Region, that locally we look forward to GlobalFoundries investing in the 14 nanometer mode node, and also their efforts to expand their 300m customer base with the deployment of 5G technology."

According to the technology analysis website anandtech.com, GlobalFoundries will continue to work with the IBM Research Alliance in Albany until the end of the year.

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