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

Financial targets and margin outlook

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

• Expecting to exit 2026 at 30% gross margin, with a 10-point improvement to 2028 from mix, non-wafer revenue, manufacturing productivity, and scale.

• Communications infrastructure and data center segments are key growth drivers, with high-30s% growth expected for the year.

• Automotive and IoT segments are also contributing to margin expansion and diversification.

• Non-wafer revenue, including RISC-V and IP licensing, is expected to rise to 12–14% of total revenue, supporting margin growth.

Capital expenditure and technology investments

• CapEx for the year is projected at $1.3–$1.4 billion, or 15–20% of revenue, up from previous years due to strong demand and technology investments.

• Investments are focused on silicon photonics, FDX solutions, and silicon germanium, with efficient expansion within existing facilities.

• CapEx strategy is supported by demand visibility, government support, and customer partnerships.

Silicon photonics and data center growth

• Communications infrastructure and data center revenue is increasingly driven by silicon photonics and silicon germanium solutions.

• Pluggable optics are a key near-term growth area, with a $1 billion run rate targeted by 2028.

• Co-packaged optics (CPO) expected to drive the next phase, aiming for $2 billion in silicon photonics revenue by 2029.

• Strong customer momentum and technical leadership in CPO, with two tape-outs in Q1 and alignment with OCI MSA standards.