GLOBALFOUNDRIES (GFS) TD Cowen's 54th Annual Technology, Media & Telecom Conference summary

Margin targets and growth strategy

• Targets 40% gross margin by 2028 and 45% by 2030, driven by business mix, technology investments, and manufacturing efficiencies.

• Mix shift toward communications infrastructure, data center, automotive, and IoT expected to add significant margin points.

• Non-wafer revenue, including RISC-V and IP licensing, is growing and expected to reach 12%-14% of revenue long-term.

• Manufacturing productivity and scale, including digital and AI-driven efficiencies, are key levers for margin improvement.

• Advanced packaging, custom silicon, and co-packaged optics are long-term incremental margin drivers.

Capital expenditure and technology investments

• CapEx increased to 15%-20% of revenue, up from 7%-10%, to support demand in silicon photonics, FDX, and silicon germanium.

• Investments focus on expanding within existing facilities, leveraging government support and customer partnerships.

• Silicon photonics is a major CapEx focus, but other technologies like FDX and silicon germanium also drive investment.

Communications infrastructure and data center outlook

• Communications infrastructure and data center revenue is growing rapidly, with expectations for high 30s% growth this year.

• Data center growth driven by optical networking, power applications, and strong positions in pluggable optics and co-packaged optics.

• Targeting $1 billion run rate in pluggable optics by 2028 and $2 billion in silicon photonics revenue by 2029.

• GaN and BCD technologies are being developed for efficient data center power solutions.