GlobalFoundries Advancing Semiconductor Leadership in America - GLOBALFOUNDRIES INC

Explicit Guidance:

• Revenue: Anticipated revenue contribution of ~$50 million in 2027 from the new program, with growth trajectory expected to follow fab ramp.
• Margins:
  • Gross Margin: Expected annual accretion of 30–50 basis points (bps) in 2027, growing to 100–200 bps long-term.
  • Operating Margin: Expected annual accretion of 100–200 bps by 2026 and 2037, growing to 200–300 bps long-term.
  • Margin drivers attributed to construction management fee recognition and economies of scale.
• Earnings Per Share (EPS): Expected annual accretion of $0.10–$0.15 in 2027, growing to $0.50–$0.75 long-term.
• Free Cash Flow (FCF): Projected cumulative FCF generation of approximately $3 billion over the next 10 years.
• Capex: No direct capital expenditure (Capex) incurred by GF for the new fabs; funding provided via U.S.-Japan Government SPV (up to $21 billion).
• Tax Rate / Share Count: No specific guidance provided.

Business-Segment Outlook:

• Technology Platforms: Primary focus on FTX (Edge AI/Physical AI for automotive, industrial, and data centers), BCD (power management for AI data centers), and UX (industrial/connected infrastructure).
• Capacity Additions: Two new 300mm phases planned adjacent to Fab 8 in Malta, NY.
  • Phase 1: Adds ~900,000 300mm wafers/year capacity; "shovel-ready" with core infrastructure in place.
  • Phase 2: Adds ~900,000 300mm wafers/year capacity; contingent on a "go-no-go" decision by stakeholders before end of 2028.
• Total U.S. Capacity Impact: Projected to increase total U.S. wafer capacity by ~10%.
• Timeline:
  • Groundbreaking: Expected in the current quarter.
  • Equipment Ready: 2028.
  • First Wafer: 2029.
  • Operating Fees: Start in 2027; Operations/Management fees ramp from 2029.
  • Project Term: Minimum 20-year duration.
• Future Tech: Potential addition of new technologies based on market conditions and customer requirements over time.

Market and Competitive Outlook:

• Demand Drivers: Anticipated "explosion of applications" driven by AI data centers, physical AI, autonomous vehicles, intelligent factories, next-gen communications, and smart devices.
• Supply Dynamics: Strong demand for differentiated semiconductors coupled with limited domestic U.S. supply capacity for these specific technologies.
• Competitive Positioning: GF positioned as one of the few at-scale foundries with meaningful U.S. capacity and expansion capability; selected as the partner due to unique combination of differentiated technology, operational excellence, and execution track record.

Macro / Industry Outlook:

• Economic & Strategic Impact: Project expected to create ~27,000 construction/ecosystem jobs and >1,000 high-skilled manufacturing jobs in NY's capital region.
• Government Partnerships:
  • U.S. & Japan: $21 billion investment via U.S.-Japan Strategic Investments Agreement to reduce reliance on overseas supply and enhance supply security.
  • U.S. CHIPS Program: $955 million of previously awarded CHIPS funding repurposed toward R&D and Capex starting 2027.
  • Department of Commerce (DOC): U.S. government to receive ~4% equity stake in GF; no further equity participation expected.
• Regulatory/Tax: No specific regulatory changes or tax rate guidance mentioned beyond CHIPS repurposing.

Strategic Initiatives:

• Malta, NY Expansion: First-of-its-kind public-private framework where government partners fund/own infrastructure (SPV) while GF provides technology, construction management, and operations.
• Financial Model: Revenue streams include Technology Fees (2027+), Construction Management Fees, Operations Management Fees (2029+), Cost Reimbursements, and EBITDA Sharing.
• Other Investments: Accelerating investments in Silicon Germanium (SiGe), Silicon Photonics, and Interposer technologies to support AI data center demand.
• Long-term Goal: Accelerates GF's trajectory toward strategic goals without diluting existing capacity for other demand upside.

Risks and Headwinds to Outlook:

• Conditions Precedent: Financial metrics and accretion figures are subject to signing of definitive agreements.
• Phase 2 Timing: Second fab construction contingent on a "go-no-go" decision to be made before end of 2028.
• Standard Forward-Looking Risks: Actual results may differ materially due to general market, operational, or macroeconomic factors (standard disclaimer referenced).

Management Tone on the Future:

• Confidence: Highly confident and enthusiastic ("extraordinary moment," "first-of-its-kind," "proven ability to execute").
• Strategic Alignment: Views the initiative as "accretive" to the long-term model and a "win-win" that accelerates growth without capital risk.
• Execution Belief: Emphasizes a "proven track record" of delivering large-scale projects on schedule (referencing Malta greenfield and Singapore brownfield expansions).
• Outlook: Anticipates strong, sustained demand for differentiated technologies and meaningful momentum from 2027 onward.

Miscellaneous:

• Revenue Timing: No specific quarterly or Y/Y growth guidance for overall company revenue provided, other than the specific $50M contribution from the new program in 2027.
• Stakeholder Endorsement: Mentioned advanced discussions with additional customers beyond current partners (Renesas, Tokyo Electron, Apple, Cirrus Logic, GM).
• Reporting: Next detailed update expected at the November earnings call.