When Apple Inc. reported its most recent quarterly earnings, it said that revenue was $6 billion less than it could have been because it couldn’t get all the chips it needed and that the current quarter would be even worse. In doing so, it was revealing not only that the global semiconductor shortage was affecting one of the world’s most valuable companies, but also how it did so.
Apple’s devices famously use cutting-edge chips that the company designs for its own needs. Those weren’t the problem, according to Chief Executive Officer Tim Cook—it was the simpler chips that carry out mundane functions such as managing power and data. “On legacy nodes, we compete with many different companies for supply, and it’s difficult to forecast when those things will balance,” he told investors on Oct. 28.
The semiconductor industry is forever focused on making even more impossibly advanced chips, but the global chip shortage is most acute when it comes to chips made through processes that haven’t been cutting-edge for years. As a result, chipmakers who can’t compete with the most sophisticated players in the industry have been sharing in the boom in orders over the last 18 months.
This is good news for GlobalFoundries, the New York-based chipmaker owned almost entirely by the investment arm of the government of Abu Dhabi. GlobalFoundries, or GloFo as it’s sometimes called, raised $2.6 billion when it went public the day before Cook’s comments, quietly completing the third-largest initial public offering on a U.S. exchange this year, according to data compiled by Bloomberg. By Nov. 2 its share price had jumped more than 20%.
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