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Earnings Results: GlobalFoundries’ first public results top Street view as chip shortage continues

GlobalFoundries Inc. topped Wall Street expectations in its first earnings report as a public company Tuesday while the third-party silicon-wafer foundry warned that the gap between short supply and high demand is far from being closed.

High demand is showing no signs of changing or “frothiness,” Thomas Caulfield, GlobalFoundries’
chief executive, told analysts on the conference call.

“We sit in a unique position as a foundry, where we get to see what goes on in a lot of the end markets we serve,” Caulfield said. “We are still dealing with shortages of what we can supply to our key customers in 2022.”

The Malta, N.Y.-based company — known as a fabrication plant, or “fab,” in industry parlance — makes silicon wafers for the majority of chip makers who do not have their own fabs. Since the COVID-19 pandemic, customer waiting lists at third-party fabs like GlobalFoundries have been backlogged for several months owing to the global chip shortage.

The company reported a 45% gain in smart mobile device revenue to $849 million from the year-ago period. Similarly, communications infrastructure and data-center sales rose 34% to $285 million, home and industrial “Internet of Things” sales rose 37% to $218 million, automotive sales jumped 368% to $103 million, while PC sales declined 40% to $113 million from the year-ago period.

As far as supply-chain difficulties that have not only dogged the semiconductor sector but global manufacturing at large, Caulfield said there’s still a ways to go.

“Over the course of this year, we’ve closed the gap, that really started with a significant gap between supply and demand,” Caulfield told analysts. “I think we’ve made, as an industry, record shipments in all manufacturing, we’ve closed that gap, but nowhere near where it needs to be closed.”

The company reported third-quarter net income of $5 million, or a penny a share, versus a loss of $293 million, or 58 cents a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were 7 cents a share.

GlobalFoundries CEO on IPO: ‘We have to accelerate our capacity’

Revenue rose to $1.7 billion to $1.09 billion in the year-ago quarter, GlobalFoundries reported, while analysts surveyed by FactSet had forecast a loss of a penny a share on revenue of $1.7 billion.

For more: Five things to know about GlobalFoundries

For the fourth quarter, GlobalFoundries forecast adjusted earnings of 9 cents to 13 cents a share on revenue of $1.8 billion to $1.83 billion for the fourth quarter, while analysts had estimated earnings of 9 cents a share on revenue of $1.8 billion.

Shares fluctuated between gains and losses after hours, before closing the extended session up 1%. Shares closed the regular session down 1.8% at $69.24. Shares are 47% above their $47 IPO price from when the company went public a month ago.

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