GLOBALFOUNDRIES (GFS) BofA Securities 2024 Global Technology Conference summary

State of the industry and company performance

• Semiconductor industry has experienced a prolonged inventory correction, with normalization expected by late 2024.

• Inventory levels are improving, but recovery is uneven across end markets.

• Company demonstrated resilience with beats on EPS and gross margin, and strong free cash flow despite revenue declines.

• Q1 is considered the bottom, with readiness for an upturn due to broad customer base and differentiated products.

End market trends and growth drivers

• Data center and home/industrial IoT segments have bottomed, with growth not required for overall company growth.

• Automotive segment is expected to see meaningful mid-single digit growth, driven by new design wins and applications.

• Smart mobile devices are projected to grow 3%-4%, especially in the premium segment, contributing to sequential revenue growth.

Pricing, customer agreements, and capacity

• Pricing expected to remain flat in 2024, supported by focus on single-source, differentiated technologies.

• Over 90% of design wins are single-source, reducing pricing pressure and fostering customer commitment.

• Long-term agreements (LTAs) have provided revenue certainty, with $30 billion committed and two-thirds still available.

• Underutilization payments are a small fraction of revenue, with renegotiations maintaining strong customer partnerships.