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GlobalFoundries aims to double Japan revenue, chip away at TSMC's market lead

[TOKYO] GlobalFoundries, the world's second largest contract chipmaker, aims to double its revenue from Japan over the next few years by launching cheaper chips for newer uses that will help it claw market share from a dominant Taiwanese rival, a senior executive said.

The California-based private company, owned by Abu Dhabi's Advanced Technology Investment Co, will target clients in the automotive sector, in smartphone camera systems and the so-called internet of things to achieve its revenue goal, said Gregg Bartlett, senior vice president in charge of technology.

GlobalFoundries will be up in Japan against Taiwan Semiconductor Manufacturing Co, the world's biggest contract chipmaker, which is estimated to have the lion's share of the market.

Globally, TSMC had a 54.5 per cent share in 2016 of the contract chipmaker market, followed by GlobalFoundries with an 8.6 per cent share, according to research firm Gartner. In Japan, the California-based company's share is even lower.

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Japanese clients are also generally loathe to switch foundries with whom they have built long-term relationships.

Still, with cars increasingly being automated and data centres needing enhanced capacity, Bartlett was confident of growth for GlobalFoundries in Asia's second-biggest economy, telling Reuters in an interview on Wednesday that it was a "very important market" for the firm.

GlobalFoundries' Japan push comes as it is in the midst of boosting its global presence. Towards this end, it announced in February a $10 billion project in China, the world's largest semiconductor market, to build a factory in the city of Chengdu.

It is also aiming to go into production with the next-generation 7-nanometre process technology in the second quarter of 2018.