Abu Dhabi releases tender for $6bn-plus microchip plant

05 January 2011

Facility will be the first of its kind in the Middle East

A subsidiary of the UAE’s Advanced Technology Investment Company (Atic) has invited firms to bid by 16 January for the contract to design and build its proposed $6bn-plus semiconductor factory at Abu Dhabi.

The request for proposal (RFP) came out in December and contractors are in the process of preparing bids at the moment,” says a source close to the project. “Bids are due in on 16 January, but a two-week extension may be granted.”  

Another source says two specialist technology engineering contractors – Germany’s M+W Group and the US’ CH2M Hill – are among the bidders for the project.

“Both companies have extensive experience on these types of projects,” says the source. “They will definitely be in the running.”

A spokesman from M+W Group declined to confirm or deny the story citing client confidentiality issues. CH2M Hill were not available to comment when contacted by MEED.

When contacted by MEED, Atic confirmed that 16 January was the deadline for bids and that both M+W Group and C2HM Hill are among the contractors bidding for the design and build contract to build the facility.

When completed the plant will be owned and operated by the Atic subsidiary Globalfoundries and will be located on a three-square-kilometre site next to Abu Dhabi International airport. It will be the first facility of its type in the Middle East.

The budget for the facility has been calculated at $6bn-7bn which is the estimated cost to build a fabricating facility of this nature.

Atic has said the plant will create about 1,500 jobs with the potential for about another 4,500, if a technology cluster is created around the facility. The company also said the resultant semiconductor industry in Abu Dhabi is expected to contribute $4bn a year to the emirate’s gross domestic product (GDP). 

The factory will start production in 2015 and will be the fourth production facility operated by Globalfoundries. The other factories are located in Germany and Singapore with a US facility in New York due to come on stream in 2012. 

When the New York plant becomes operational, the company will be producing more than 200,000 silicon wafers each month.

The firm has also signed an agreement with the microchip industry’s research arm, the Semiconductor Research Corporation. The deal will see a semiconductor research and development centre built on the campus of Khalifa University of Science, Technology and Research in Abu Dhabi.

Atic, a technology investment company owned by the Abu Dhabi government, bought a 65.8 per cent share in Globalfoundries for $2.1bn in March 2008 from the US’ Advanced Micro Devices (AMD). In December, Atic increased its share to 86 per cent with AMD retaining the remainder.

In 2009, Atic paid about $3.9bn for Singapore’s Chartered Semiconductor Manufacturing  and merged the company with Globalfoundries. 

As a private company, Globalfoundries does not report any financial details, but recent reports have said that it expects to post revenues of $3.5bn in 2010.

Headquartered at Silicon Valley in the US, Globalfoundries is the world’s third-largest microchip manufacturer by revenue behind two Taiwanese companies – Taiwan Semiconductor Manufacturing Company and United Microelectronics.

When it bought Globalfoundries, Atic pledged to invest a total of $10bn into the company. About $3.6bn was set aside for existing plants with the remainder to be spent on the Abu Dhabi facility.

The US-based technology research company Gartner has said that global revenues in the semiconductor industry were about $300.3bn in 2010 and will grow by about 4.6 per cent to $314.25bn in 2011.

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