Company Reports

GlobalFoundries raised its 2026 Communication Infrastructure and Datacenters segment revenue growth outlook to 50s from high 30s and the Internet of Things segment to 10%-15% from midsingle digits, but this was overshadowed by a weaker outlook for smart mobile sales. The stock fell 5% on Wednesday.

At its investor day, GlobalFoundries announced a 10%-12% revenue CAGR target for 2025 to 2030 and 45% long-term non-IFRS gross margin target. Its revenue target CAGR for communication infrastructure and data centers is the highest at 30%-plus. GF announced its first-ever dividend at $0.12 per share.

GlobalFoundries is one of the top five contract semiconductor manufacturers, or foundries. It focuses on specialty products that perform narrower sets of tasks compared with the most advanced processors. These tasks range from storing small bits of data for very long periods to regulating electricity flows. GF has relinquished development of cutting-edge chips like smartphone and data center processors owing to financial, scale, and personnel constraints. Many of GF’s offerings are commoditized as they are fabricated on process technologies first debuted over a decade ago. Customers can obtain close substitutes at other chipmakers barring major shortages, which limits GF’s pricing power.

GlobalFoundries' shares jumped 9% after reporting March-quarter results at the high end of guidance, and management shared upbeat comments on the optical outlook. Midpoints of June-quarter guidance are $1.76 billion for revenue and 10.8% for operating margin, close to PitchBook consensus.

GlobalFoundries is one of the top five contract semiconductor manufacturers, or foundries. It focuses on specialty products that perform narrower sets of tasks compared with the most advanced processors. These tasks range from storing small bits of data for very long periods to regulating electricity flows. GF has relinquished development of cutting-edge chips like smartphone and data center processors owing to financial, scale, and personnel constraints. Many of GF’s offerings are commoditized as they are fabricated on process technologies first debuted over a decade ago. Customers can obtain close substitutes at other chipmakers barring major shortages, which limits GF’s pricing power.

Semiconductor Manufacturing International Corporation, Hua Hong Semiconductor, and GlobalFoundries reported December-quarter sales that exceeded management guidance. They noted mature node chips are recovering from a multiyear inventory clearance and outlined varying tailwinds from AI.

GlobalFoundries hosted a webinar outlining its strategy to seize opportunities in edge and physical artificial intelligence. GF targets a 10% revenue compound annual growth rate once physical AI revenue ramps up, but did not specify a time frame.

GlobalFoundries' September-quarter revenue and operating margin were USD 1,688 million and 11.6%, both flat sequentially and met management guidance. Midpoints of December-quarter guidance are USD 1.8 billion for revenue and 10.8% for operating profit.

GlobalFoundries shares cratered 9% after saying September quarter guidance is affected by high inventories in mobile and internet-of-things segments. GF's June-quarter revenue and operating margin were $1,688 million and 11.6%, up 6.5% and 208 basis points, respectively; both within guidance.

GlobalFoundries is one of the top five contract semiconductor manufacturers, or foundries. It focuses on specialty products that perform narrower sets of tasks compared with the most advanced processors. These tasks range from storing small bits of data for very long periods to regulating electricity flows. GF has relinquished development of cutting-edge chips like smartphone and data center processors owing to financial, scale, and personnel constraints. Many of GF’s offerings are commoditized as they are fabricated on process technologies first debuted over a decade ago. Customers can obtain close substitutes at other chipmakers barring major shortages, which limits GF’s pricing power.

GlobalFoundries is one of the top five contract semiconductor manufacturers, or foundries. It focuses on specialty products that perform narrower sets of tasks compared with the most advanced processors. These tasks range from storing small bits of data for very long periods to regulating electricity flows. GF has relinquished development of cutting-edge chips like smartphone and data center processors owing to financial, scale, and personnel constraints. Many of GF’s offerings are commoditized as they are fabricated on process technologies first debuted over a decade ago. Customers can obtain close substitutes at other chipmakers barring major shortages, which limits GF’s pricing power.

GlobalFoundries is increasing investment in the US by $3 billion over the next decade to a total of $16 billion. The investment will be used to expand manufacturing and packaging facilities in the states of New York and Vermont, and on various research and development projects.

Globalfoundries' revenue for the first quarter of 2025 was $1.59 billion, down 13% sequentially. Gross margin rose 214 basis points from the prior quarter to 22.4%. Though figures are slightly above the midpoint of guidance, shares were down 3% on the report.

GlobalFoundries is one of the top five contract semiconductor manufacturers, or foundries. It focuses on specialty products that perform narrower sets of tasks compared with the most advanced processors. These tasks range from storing small bits of data for very long periods to regulating electricity flows. GF has relinquished development of cutting-edge chips like smartphone and data center processors owing to financial, scale, and personnel constraints. Many of GF’s offerings are commoditized as they are fabricated on process technologies first debuted over a decade ago. Customers can obtain close substitutes at other chipmakers barring major shortages, which limits GF’s pricing power.

GlobalFoundries' fourth-quarter 2024 revenue was no surprise at $1.83 billion, up 5% sequentially. Gross margin rose 73 basis points from the prior quarter to 24.5%, less than we expected amid a temporary shift away from more-profitable smart mobile products.

We view the latest US export controls by the Commerce Department as having minimal impact on the foundries under our coverage. As such, we leave our fair value estimates on TSMC, UMC, GlobalFoundries, SMIC, and Hua Hong Semiconductor unchanged at TWD 1,380, TWD 70.00, USD 42.00, HKD 14.00, and HKD 16.50 per share, respectively. TSMC and UMC remain our top picks for the sector.

Globalfoundries, or GF, reported third-quarter numbers and fourth-quarter guidance that surpassed PitchBook consensus figures, and shares surged 15% after the results. Meanwhile, we retain our fair value estimate of USD 42 as the upbeat guidance was within our expectation and management comments on 2025 are in line with our view of improving automotive and industrial demand. GF looks fairly valued with the potential for a 2025 recovery weighed against risks of price pressure from new Chinese capacity.

GlobalFoundries is vying for third place among contract semiconductor manufacturers, or foundries. It focuses on specialty products that perform narrower sets of tasks compared with the most advanced processors. These tasks range from storing small bits of data for very long periods to regulating electricity flows. GF has relinquished development of cutting-edge chips like smartphone and data center processors owing to financial, scale, and personnel constraints. Many of GF’s offerings are commoditized as they are fabricated on process technologies first debuted over a decade ago. Customers can obtain close substitutes at other chipmakers barring major shortages, which limits GF’s pricing power.

Mature-process foundries Globalfoundries, Hua Hong, Semiconductor Manufacturing International Corporation reported upbeat second quarter of 2024 earnings in the past week. Our Fair Value Estimates on GF and Hua Hong are unchanged at $42 and HKD 16.50 respectively, and on SMIC raised to HKD 14 from HKD 10.80. We find GF and Hua Hong to be fairly valued as their 2025 recoveries have been priced in and there is little change to our long-term view. SMIC remains overvalued after our fair value estimate hike, as we have little confidence in its long-term profitability given its heavy capital spending in the next few years. All three foundries have little to benefit from artificial intelligence until late 2025, in our view. We prefer Taiwanese foundries TSMC for its dominance in cutting-edge nodes and UMC for its disciplined approach balancing utilization and profitability.

Globalfoundries announced it will repurchase $200 million of shares at $50.75 per share from its largest shareholder, Mubadala Technology Investment Company, as part of the latter’s $950 million offering. We maintain our fair value estimate at $42 as Globalfoundries will not receive any proceeds from the offering and the size of the repurchase is not significant. The deal is not favorable to Globalfoundries and potential subscribers since we view Globalfoundries as overvalued for its lower profitability than peers. Shares are down 5% after hours upon the news. We think the offering could be the second phase of a multiyear exit plan for Mubadala following its IPO. We anticipate Mubadala to offer small batches of shares regularly, especially near the peaks of upcoming semiconductor cycles.