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GLOBALFOUNDRIES INC.

(GFS)
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GlobalFoundries forecasts upbeat sales on booming chip demand

11/30/2021 | 04:16pm EST

Nov 30 (Reuters) - GlobalFoundries forecast upbeat current-quarter sales on Tuesday, in its first earnings update after going public in October, banking on a spike in chip demand as companies scramble to secure supplies amid a global semiconductor crunch.

The Malta, New York-based company makes silicon wafers for chip designers such as Advanced Micro Devices, Broadcom Inc and Qualcomm Inc, which do not have their own fabrication plants, called fabs.

Although the pandemic has fueled demand for laptops, mobile phones and cars, it has also exacerbated a worldwide shortage of semiconductor chips, forcing automakers and electronic firms to curtail production and delay rollouts of new products.

The current shortage centers around less-advanced chips used in making integrated circuits (ICs) and microcontrollers and comes as foundries such as Taiwan Semiconductor Manufacturing Co Ltd shift their focus on making higher-margin, cutting-edge chips used in smart phones and laptops.

That, in turn, has helped GlobalFoundries, which is the world's third-largest foundry by revenue, to stay competitive in that segment of the market.

The company forecast fourth-quarter revenue of between $1.8 billion and $1.83 billion, the low end of which was in line analyts' estimates, according to Refinitiv data.

GlobalFoundries posted revenue of $1.7 billion and a profit of 7 cents per share for the third quarter ended Sept. 30, both of which beat Wall Street's estimates.

Chief Executive Officer Tom Caulfield said higher wafer output primarily drove revenue growth.

Still, the company's gross margins remained markedly low at about 18% in the latest quarter, compared with foundry rivals TSMC and Intel, whose gross margins came in well above 50%.

Shares of the company rose 1.4% in extended trading. They have risen nearly 50% since going public, valuing the company at more than $37 billion. (Reporting by Eva Mathews in Bengaluru; Editing by Amy Caren Daniel and Anil D'Silva)


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
ADVANCED MICRO DEVICES, INC. -2.53% 118.81 Delayed Quote.-15.30%
BROADCOM INC. -2.65% 533.23 Delayed Quote.-19.86%
GLOBALFOUNDRIES INC. -4.26% 51.25 Delayed Quote.-21.12%
QUALCOMM, INC. -0.94% 164.93 Delayed Quote.-8.95%
S&P 500 -1.89% 4397.94 Delayed Quote.-5.95%
TAIWAN SEMICONDUCTOR CO., LTD. -4.04% 68.8 End-of-day quote.-12.47%
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED -1.54% 641 End-of-day quote.4.23%
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Analyst Recommendations on GLOBALFOUNDRIES INC.
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Financials (USD)
Sales 2021 6 551 M - -
Net income 2021 -302 M - -
Net cash 2021 166 M - -
P/E ratio 2021 -88,6x
Yield 2021 -
Capitalization 27 403 M 27 403 M -
EV / Sales 2021 4,16x
EV / Sales 2022 3,74x
Nbr of Employees 15 000
Free-Float -
Chart GLOBALFOUNDRIES INC.
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GLOBALFOUNDRIES Inc. Technical Analysis Chart | GFS | KYG393871085 | MarketScreener
Technical analysis trends GLOBALFOUNDRIES INC.
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Income Statement Evolution
Consensus
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Mean consensus BUY
Number of Analysts 15
Last Close Price 51,25 $
Average target price 78,43 $
Spread / Average Target 53,0%
EPS Revisions
Managers and Directors
Thomas Caulfield Chief Executive Officer & Director
David W. Reeder Chief Financial Officer
Ahmed Yahia Al-Idrissi Chairman
Gregory Bartlett SVP-Technology, Engineering & Quality
Elissa E. Murphy Independent Director
Sector and Competitors