GlobalFoundries to make key AI chip component for TSMC in $2 billion deal

GlobalFoundries to Supply Key AI Chip Components to TSMC in $2B US Deal

GlobalFoundries and TSMC Strike Major Silicon Interposer Agreement

Deal Overview and Strategic Importance

Oct 8 (Reuters) - GlobalFoundries on Thursday said it has reached a $2 billion agreement to make a key component used to link AI processors and memory chips for TSMC at its New York facility.

What Are Silicon Interposers?

Known as a silicon interposer, the component sits beneath processors and memory chips inside advanced AI packages and enables them to communicate at high speeds.

Key Details of the Five-Year Agreement

• Under the five-year agreement, GlobalFoundries will expand manufacturing capacity at its Malta, New York, facility to produce the components for TSMC
• The Malta facility is expected to become the first US-based source of silicon interposers used in advanced chip-packaging technologies, the company said
• Shares of GlobalFoundries were up about 4% in premarket trading

Future Outlook and Industry Impact

• The deal provides a framework for future capacity expansion as demand for advanced packaging grows, with volume production expected to begin ramping up in the first half of 2028
• Advanced packaging has become a major constraint on AI chip production, as demand for the technology exceeds available manufacturing capacity

Reporting Credits

(Reporting by Prathik Jayaprakash in Bengaluru; Editing by Jonathan Ananda)