GlobalFoundries (GFS.O) on Tuesday projected second-quarter revenue and profit slightly above Wall Street expectations, indicating stable demand despite industry-wide pressures from tariffs, smartphone weakness, and policy uncertainty.
The U.S.-based contract chipmaker expects Q2 revenue of $1.68 billion (±$25 million) and adjusted earnings of 36 cents per share (±5 cents). Analysts polled by LSEG had anticipated $1.67 billion in revenue and 35 cents per share in profit. The positive forecast comes after the company posted Q1 revenue of $1.59 billion, slightly ahead of estimates, and adjusted earnings of 34 cents, beating forecasts of 28 cents.
While smartphone demand, its largest revenue stream, remains under pressure, GlobalFoundries said its automotive chip segment showed year-over-year growth in Q1. This resilience comes amid U.S. President Donald Trump’s global tariff strategy, which has already imposed levies on foreign-made autos – the company’s third-largest market.
Interestingly, CEO Thomas Caulfield noted that U.S. tariffs on foreign-made chips could benefit domestic manufacturers like GlobalFoundries by prompting customers to shift production to U.S.-based fabs. However, broader uncertainty around the CHIPS Act, which includes $52.7 billion in U.S. subsidies for domestic chip production, continues to cloud the industry’s long-term outlook.
Meanwhile, speculation of a potential merger with Taiwanese United Microelectronics Corp (UMC) resurfaced in March, although UMC denied any ongoing talks in April.
Despite the policy fog and shaky smartphone sector, GlobalFoundries appears cautiously optimistic heading into Q2 – signaling potential resilience among U.S.-based chipmakers navigating a turbulent geopolitical landscape.