GLOBALFOUNDRIES (GFS) investor relations material

Strategic vision and industry trends

• Identifies three mega trends: AI-driven data center growth, proliferation of physical AI, and the need for resilient global semiconductor supply chains.

• AI workloads and sovereign AI are driving unprecedented data center CapEx, with hyperscalers expected to spend over $700 billion in 2026, more than double 2025 levels.

• Physical AI is forecast to rapidly expand, with tens of billions of devices expected within a decade, requiring advanced sensing, processing, and communication capabilities.

• Geopolitical shifts and supply chain security are reshaping manufacturing strategies, with a focus on multi-site, cross-qualified fabs in the U.S., Europe, and Asia.

• Customer partnerships and government support are accelerating reshoring and capacity expansion, with $3 billion in design wins in 2025 from U.S. reshoring alone.

Technology portfolio and innovation

• Silicon photonics, advanced packaging, and power delivery are core to the data center and communications infrastructure strategy, with a $2 billion revenue target for photonics by 2030.

• Industry-leading BCD and GaN processes enable high-efficiency power conversion for automotive, data center, and IoT applications.

• Integration of MIPS and ARC IP expands custom silicon and RISC-V offerings, targeting a $1 billion run rate in custom silicon and IP by 2030.

• Strategic acquisitions (AMF, InfiniLink, Tagore, MIPS, ARC) enhance capabilities in photonics, power, and IP, supporting both data center AI and physical AI markets.

• Investments in R&D, partnerships with startups, and a global ecosystem of design and manufacturing partners drive innovation and time-to-market advantages.

Financial guidance and growth targets

• Targets 10–12% revenue CAGR through 2028, with diversified growth across automotive, IoT, communications infrastructure, and data center markets.

• Automotive revenue grew 14x in five years, now 23% of total, with continued low double-digit growth expected due to content expansion and share gains.

• IoT is projected to grow at mid-teens rates, driven by physical AI, industrial, and medical applications, with over 200 design wins in 2025.

• Communications infrastructure and data center revenue grew 29% in 2025, with a 30%+ growth target and high-margin product mix.

• Gross margin is targeted to reach 40% by 2028 and 45% longer term, with operating margin expected at 25% by 2028 and 35% longer term, supported by mix shift, technology services, and disciplined CapEx (~20% of revenue).