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Chipmaker GlobalFoundries prices IPO at upper end to raise $2.6bn

One of the biggest U.S. market flotations this year comes amid chip shortage

GlobalFoundries the world's No. 3 chip foundry by revenue, raised $2.6 billion in its IPO on Oct. 27 in one of the biggest stock market flotations of the year in the U.S. (Source photos by AP) 

Chipmaker GlobalFoundries said on Wednesday it sold shares in its initial public offering at $47 a piece, at the higher end of its targeted price range, to raise about $2.6 billion.

The IPO gives GlobalFoundries a valuation of about $26 billion, making it one of the biggest stock market flotations of the year in the United States.

Abu Dhabi's sovereign wealth fund Mubadala Investment Co, which holds a majority stake in GlobalFoundries, sold 22 million shares in the IPO.

Funds associated with BlackRock, Fidelity Management & Research Company, some affiliates of Koch Strategic Platforms, Columbia Management Investment Advisers and Qualcomm invested more than $1 billion in the IPO.

The IPO comes at a time when demand for chips has sky-rocketed due to a global shortage that forced automakers and other electronics firms to cut production.

Strong demand for chips boosted revenue at GlobalFoundries over the past 12 months and helped it cut back losses.

One of the marquee listings of 2021, which included Coinbase Global, Robinhood Markets and Coupang, GlobalFoundries and electric-vehicle maker Rivian are headlining a particularly busy year-end for U.S. IPOs.

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

GlobalFoundries, which makes radio-frequency communications chips for 5G, automotive, and other specialized semiconductors, counts AMD and Broadcom among its customers.

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

GlobalFoundries will list its shares on Nasdaq on Thursday under the ticker 'GFS'.

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


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