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GlobalFoundries Q3 Outlook Disappoints Amid Weak Smartphone Demand

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GlobalFoundries, the world’s third-largest contract chipmaker, projected third-quarter revenue and profit below Wall Street expectations as the recovery in consumer electronics demand, particularly smartphones, remains sluggish. Shares fell 6% in premarket trading, adding to a roughly 15% decline this year.

U.S. tariffs and broader economic uncertainty have dampened smartphone sales, with IDC data showing global growth slowing to just 1% in the June quarter. CEO Tim Breen, who took over in February, said the company is awaiting a “return to meaningful growth” in consumer-driven markets.

For Q3, GlobalFoundries expects net revenue of $1.68 billion (±$25 million), versus analysts’ estimates of $1.79 billion. Adjusted EPS is forecast at $0.38 (±$0.05), below the $0.41 consensus.

Despite the weak outlook, the company beat expectations in Q2 thanks to cost controls and strength in automotive and datacenter segments. Revenue for the quarter rose 3.7% to $1.69 billion, slightly above forecasts, while adjusted EPS reached $0.42 against the $0.35 estimate.

GlobalFoundries is expanding in automotive with a chipmaking deal with Continental and the July acquisition of chip architecture supplier MIPS to strengthen industrial and AI processor offerings. In June, it raised its total investment plans to $16 billion, including $1 billion more for capital spending and $3 billion for R&D in emerging chip technologies for EVs and AI servers.

GlobalFoundries Projects Weak First Quarter Amid Tariff Concerns and Smartphone Market Weakness

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GlobalFoundries, the contract chipmaker based in Malta, New York, issued a bleak forecast for its first-quarter revenue and profit, citing the potential impact of U.S. President Donald Trump’s tariffs on automakers and a struggling smartphone market in 2025. Despite the outlook, the company’s shares reversed earlier losses, rising nearly 4% in morning trading.

For the first quarter, GlobalFoundries expects revenue to range between $1.55 billion and $1.60 billion, below the Wall Street estimate of $1.66 billion, according to data compiled by LSEG. The company also projects adjusted earnings per share to fall between 24 cents and 34 cents, with the midpoint of this range under analysts’ expectations of 32 cents per share.

The automotive sector, which is GlobalFoundries’ third-largest revenue contributor, is especially vulnerable to the effects of tariffs on steel and aluminum imports in the United States. In 2023, the company signed a long-term agreement with General Motors to produce chips exclusively for the carmaker at its Malta facility.

Additionally, GlobalFoundries is facing challenges in its largest segment, smartphones. The global smartphone market is expected to face a turbulent 2025, according to research firm Canalys, further adding pressure on the company’s performance.

For the fourth quarter, GlobalFoundries posted revenue of $1.83 billion, meeting analysts’ estimates. The company also reported a profit of 46 cents per share, excluding items, which was slightly above the expected 44 cents.

Earlier this month, the company announced the appointment of Tim Breen as its new CEO, succeeding Thomas Caulfield.

GlobalFoundries Appoints Tim Breen as New CEO

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GlobalFoundries, the world’s third-largest contract chipmaker, announced on Wednesday that Tim Breen will be its new CEO. Breen, who joined the company in 2018 and has served as its Chief Operating Officer since 2023, succeeds Thomas Caulfield, who will transition to the role of executive chairman.

Shares of GlobalFoundries remained mostly unchanged following the announcement. Before his tenure at GlobalFoundries, Breen held a senior executive position at Mubadala Investment Company, Abu Dhabi’s sovereign wealth fund and GlobalFoundries’ largest stakeholder.

In addition to Breen’s appointment, GlobalFoundries also announced that Niels Anderskouv, a former executive at Texas Instruments, will be the company’s new president. Anderskouv will replace Breen as Chief Operating Officer and will oversee manufacturing and product strategy.

Caulfield, who led the company through its 2021 IPO and had been CEO since 2018, praised Breen and Anderskouv for their leadership and vision, stating that together they are well-positioned to drive GlobalFoundries forward.

The company, which stepped back from the high-cost race to produce the most advanced chips—opting instead to focus on specialized markets such as radio-frequency chips and automotive semiconductors—has seen increased demand for its products, especially due to a recovery in the smartphone market. Despite this growth, GlobalFoundries continues to face challenges in the industrial and automotive sectors.

In 2024, GlobalFoundries also benefited from government support, receiving approximately $1.5 billion in subsidies aimed at boosting U.S. chip manufacturing.