U.S.-headquartered semiconductor manufacturer GlobalFoundries will build a new fabrication plant in Singapore to meet the global demand for chips.

The semiconductor shortage will persist through 2021, and is expected to recover to normal levels by the second quarter of 2022, according to Gartner report.

“The semiconductor shortage will severely disrupt the supply chain and will constrain the production of many electronic equipment types in 2021. Foundries are increasing wafer prices, and in turn, chip companies are increasing device prices,” said Kanishka Chauhan, principal research analyst at Gartner.

GlobalFoundries will develop the new facility in partnership with the Singapore Economic Development Board and with co-investments from committed customers, GlobalFoundries said. More than $4 billion will be invested into the development.

“Our new facility in Singapore will support fast-growing end-markets in the automotive, 5G mobility and secure device segments with long-term customer agreements already in place,” GlobalFoundries CEO Tom Caulfield said.

GlobalFoundries manufactures semiconductors designed by companies like AMD, Qualcomm and Broadcom.

GlobalFoundries posted a QoQ drop of 16 percent in its revenue to US$1.3 billion for 1Q21, according to TrendForce. GlobalFoundries had handed over its Fab3E (an 8-inch wafer fab) in Singapore to VIS.

Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s biggest foundry by market share and revenue, according to TrendForce. It has about 56 percent market share, followed by Samsung (18 percent), UMC (7 percent) and GlobalFoundries (7 percent).

The quarterly revenue of the top 10 foundries rose by 1 percent QoQ to a record high of US$22.75 billion in 1Q21, according to TrendForce.