GlobalFoundries Advancing Semiconductor Leadership in America - GLOBALFOUNDRIES INC

Financial Performance:

• GF will not incur direct capital investment for two new 300mm fabs in Malta, NY; funding of up to $21B is provided by Japan and the U.S. via a Special Purpose Vehicle (SPV).
• Revenue impact expected to start at ~$50M in 2027, escalating as operations ramp through 2029.
• Projected gross margin accretion of 30-50 basis points in 2027, growing to 100-200 basis points long-term.
• Projected operating margin accretion of 100-200 basis points in 2026, growing to 200-300 basis points long-term.
• Anticipated earnings per share (EPS) accretion of $0.10-$0.15 in 2027, rising to $0.50-$0.75 long-term.
• Expected to generate approximately $3B in cumulative free cash flow over the next decade.
• U.S. CHIPS Program Office agreed to repurpose $955M of previously awarded funds toward GF's R&D and CapEx starting in 2027.

Guidance and Future Outlook:

• Construction on the first phase begins this quarter, with site ready for equipment in 2028 and first wafers out in 2029.
• Total project timeline is a minimum of 20 years; a "go/no-go" decision for the second fab will occur before the end of 2028.
• Each of the two phases will add ~900,000 300mm wafers of annual capacity, increasing total U.S. wafer capacity by ~10%.
• Strategic goal to accelerate domestic supply for AI, edge computing, power management, and industrial sectors without displacing current growth plans.
• GF expects to achieve target profit-per-wafer levels without incurring associated fixed costs of ownership.

Business Segments and Product Lines:

• Fabs will utilize GF's differentiated FTX, BCD, and UX platforms.
• FTX technology targets edge AI, physical AI compute, automotive, industrial, and data center applications.
• BCD (BiCMOS and Power) addresses high demand in power management, specifically for powering next-gen AI data centers.
• UX platform serves broad industrial and connected infrastructure markets.
• Future technology additions to the fab build-out are planned based on market conditions and customer requirements.

Market and Competitive Landscape:

• Drive fueled by secular trends in AI data center scaling, autonomous vehicles, intelligent factories, and the physical internet of things.
• U.S. domestic capacity for critical technologies remains limited, creating a supply gap GF is positioned to fill.
• New facilities expected to make Malta, NY, one of the largest semiconductor clusters in the U.S., creating 27,000 construction/ecosystem jobs and 1,000+ high-skilled manufacturing roles.
• Project supported by strategic alignment between U.S. and Japan governments to reduce geographic concentration risk and trade exposure.
• Customer base includes established partners like Renesas, Tokyo Electron, Apple, Cirrus Logic, and General Motors, with advanced discussions ongoing with additional clients.

Risks and Challenges:

• Forward-looking statements regarding financial accretion, margins, and timelines are subject to definitive agreements and execution risks.
• The initiative relies on the continued cooperation and funding commitment of U.S. and Japanese government stakeholders.
• Construction and ramp timelines (2028-2029) are contingent on permitting, environmental approvals, and supply chain logistics.
• No further U.S. government equity participation is expected beyond the current ~4% stake held by the Department of Commerce.

Management Commentary and Tone:

• Management characterized the announcement as "one of the most consequential in company history" and a "first-of-its-kind" framework.
• CEO Tim Breen emphasized GF's proven track record in greenfield (Malta) and brownfield (Singapore) expansion as key differentiators for selection.
• CFO Sam Franklin highlighted the capital efficiency of the model, noting GF avoids market, utilization, and capital risk while monetizing technology and management expertise.
• Tone was highly confident and optimistic, framing the initiative as a "win-win" that accelerates GF's long-term trajectory.

Analyst Questions and Answers:

• Note: The provided transcript contains the opening remarks and closing summary but does not include the specific transcript of the analyst Q&A session.
• Management confirmed the $955M CHIPS fund repurposing will specifically support R&D and capital expenditures starting in 2027.
• Confirmed the U.S. Department of Commerce will hold an equity stake of approximately 4% in GF.

Other Key Points:

• The SPV will own the infrastructure and tooling; GF acts as construction manager, operations manager, and technology provider.
• Compensation structure includes technology fees (starting 2027), construction management fees (during build-out), operating management fees (post-2029), cost reimbursements, and an EBITDA sharing mechanism.
• The project leverages GF's existing Malta campus infrastructure, workforce, and "trusted foundry" status for the U.S. Department of Defense.
• GF continues parallel investments in silicon germanium, silicon photonics, and interposer technologies to support AI supply security.