GlobalFoundries Q1 Performance Shows Smartphone Slowdown And Tariff Impact
GlobalFoundries Inc. (NASDAQ:GFS) reported fiscal first-quarter 2025 results on Tuesday. The company’s quarterly revenue growth of 2% year-on-year to $1.585 billion aligns with the analyst consensus estimate.
The contract chipmaker’s adjusted EPS of 34 cents beat the analyst consensus estimate of 28 cents.
Smart mobile device revenue declined 14% from a year ago to $586 million.
Also Read: GlobalFoundries Explores Merger With Taiwan’s UMC To Strengthen US Semiconductor Industry
Communications infrastructure & data center revenue grew 45% Y/Y to $174 million. Home and industrial IOT revenue increased 6% Y/Y to $328 million. Automotive revenue rose 16% Y/Y to $309 million. Non-wafer revenue grew 8% Y/Y to $188 million.
Margins: The adjusted gross margin declined by 220 bps to 23.9%. The adjusted operating margin increased by 130 bps to 13.4%. The adjusted EBITDA margin declined by 200 bps Y/Y to 35.2%.
As of March 31, 2025, GlobalFoundries generated $331 million in operating cash flow and held $3.7 billion in cash and equivalents.
CEO Tim Breen attributed the quarterly results to design wins and growth in the Automotive, Communications Infrastructure, Datacenter, and Home and Industrial IoT end markets.
Outlook: GlobalFoundries expects second-quarter revenue of $1.425 billion—$1.925 billion versus the $1.670 billion estimate. The company expects adjusted EPS of $0.31-$0.41 versus the $0.35 estimate. The optimistic guidance signifies stable demand despite choppy auto production and a soft smartphone market, Reuters reported Tuesday.
The Trump administration’s global tariff plans threatened the semiconductor industry. Tariffs on automakers, GlobalFoundries’ third-largest end-market, have already kicked in.
Outgoing CEO Thomas Caulfield mentioned tariffs on foreign-made chips could help U.S. manufacturers like GlobalFoundries by redirecting customers toward chips made in U.S. factories.
Policy uncertainty is also clouding the chip industry, which is bracing for potential changes to the Biden administration’s CHIPS Act.
Price Action: GFS stock is down 3.57% to $34.60 at the last check on Tuesday.
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