GLOBALFOUNDRIES (GFS) J.P. Morgan 54th Annual Global Technology, Media and Communications Conference summary

Key industry trends and business positioning

• Focus on mega trends such as data center growth, physical AI, and global supply chain security to drive momentum over the next 5–10 years.

• Strong positioning in silicon photonics and silicon germanium for data center applications, with increasing opportunities in co-packaged optics and power delivery.

• Emphasis on diversification across end markets, including automotive, IoT, and communications infrastructure.

• Unique global manufacturing footprint across three continents, supporting supply chain resilience.

• Strategic investments in advanced packaging and custom silicon, leveraging recent MIPS acquisition.

Financial performance and guidance

• Achieved 3% year-over-year revenue growth and 510 basis points gross margin expansion in Q1, with Q2 guidance at 4% revenue growth and 28.5% margin.

• Long-term model targets 40% gross margin by 2028 and 45% longer term, with 10–12% revenue CAGR and $4 earnings power by 2028.

• Operating margin targets set at 25% near-term and 35% long-term, with OpEx expected to grow at half the rate of revenue.

• Stress testing applied across all model elements, focusing on cost control, productivity, and design win momentum.

Growth drivers and market diversification

• Communications infrastructure and data center revenue grew 32% year-over-year in Q1, with high 30% growth expected in 2026.

• Automotive revenue increased 14x over five years, driven by higher semiconductor content and market share gains.

• IoT expected to grow at mid-teens rate, with 200 design wins in the segment last year.

• Smart mobile is modeled as a flat revenue base, reducing dependency on this segment.