The IPO of GlobalFoundries is perfectly timed

IT LOOKS LIKEVLSIIPOIPO the perfect time to be a chipmaker. The market for semiconductors continues to grow rapidly. By the end of the decade it will exceed $1trn globally, up from $500bn this year, forecasts Research, a firm of analysts. Demand keeps outstripping supply; the chip shortage is now expected to last well into 2023, paralysing factories of everything that needs processors—which in this day and age is basically everything. Western governments have earmarked billions to build chipmaking capacity within their borders in order to become less dependent on Asian suppliers. America alone is planning to spend $52bn over the next five years.In this context the initial public offering () of GlobalFoundries, a contract manufacturer which makes chips for other firms, seems a safe bet. The firm, which unveiled its prospectus on October 4th and is expected to list soon, is the world’s fourth-biggest chip foundry by revenues. The typical characteristics of an —a lowish offering price and a small proportion of shares available to public investors, both of which have yet to be decided—should ensure a healthy “pop” in the share price in the early days of trading. But GloFo, as semiconductor aficionados endearingly call the firm, is also an example of how tough the chip business has become, notwithstanding the favourable climate.