Global Foundries Inc (GFS)

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GlobalFoundries forecasts hit as chip customers seek advanced processes, clear inventory
Reuters
February 13, 20248:23 AM MSTUpdated a day ago

A signage at U.S. chipmaker GlobalFoundries' new fabrication plant in Singapore, September 12, 2023. REUTERS/Edgar Su/File Photo Purchase Licensing Rights, opens new tab
Feb 13 (Reuters) - GlobalFoundries (GFS.O), opens new tab forecast its first quarter below market estimates on Tuesday, as some customers continue to clear excess chip inventory while others opt for more advanced manufacturing processes which are not provided by the contract chipmaker.
Customers in end markets such as communications infrastructure and data center have been working down existing chip inventory, weighing on demand for GlobalFoundries.
Shares of the company were down 4%.
Analysts said the company is at a disadvantage as customers such as Advanced Micro Devices (AMD.O), opens new tab and smartphone chip giant Qualcomm (QCOM.O), opens new tab migrate away from the relatively less advanced nodes, which GlobalFoundries utilizes, to single-digit nodes, which it does not support.
"Our communications infrastructure and data center segment continued to show weakness through 2023. Partly due to ... the accelerated node migration of data center and digital-centric customers to single-digit nanometers," said CEO Thomas Caulfield on a post earnings call.
Various chipmakers in their quarterly earnings have also signaled the beginning of a supply glut in the automotive sector.
But GlobalFoundries said it expects automotive revenue growth to continue in 2024 due to increased semiconductor content across the vehicle architecture.
GlobalFoundries expects its first-quarter revenue to be in the range of $1.50 billion to $1.54 billion, compared with analysts' average estimate of $1.76 billion, according to LSEG data.

https://www.reuters.com/technology/chipmaker-globalfoundries-forecasts-q1-results-below-estimates-shares-drop-2024-02-13/