GLOBALFOUNDRIES (NasdaqGS:GFS) 2025 Conference December 02, 2025 02:15 PM ET Company ParticipantsTim Breen - CEOSam Franklin - CFOConference Call ParticipantsTim Arcuri - Semiconductor and Semi-Equipment AnalystTim BreenUnless I had a name that wasn't the right.Tim ArcuriWe have the right. We have the right company name. But we'll get that fixed. Okay. We're gonna get started. So I'm Tim Arcuri. I'm the semi and semi-equipment analyst here at UBS. Very pleased to have Tim Breen, who's the CEO of GlobalFound ...

Core Viewpoint - Hua Hong Semiconductor (01347) shows strong revenue growth and positive outlook for future performance, driven by recovery in semiconductor demand and stable capacity release from its second 12-inch production line [1] Group 1: Financial Performance - Hua Hong Semiconductor reported Q2 revenue of $566 million, representing an 18% year-over-year increase and a 5% quarter-over-quarter increase, aligning with market expectations [1] - The company has maintained approximately 18% year-over-year revenue growth over the past three quarters, with expectations for gross margin improvement in Q1, Q2, and Q3 of this year [1] Group 2: Future Guidance - Goldman Sachs projects a 10% to 13% quarter-over-quarter revenue growth for Q3, with expected gross margins between 10% and 12%, which is higher than previous quarter's gross margin of 10.9% [1] - The guidance reflects the company's optimistic outlook on continued recovery in demand and the positive impact of its 12-inch capacity expansion on long-term growth [1]

Core Viewpoint - Hua Hong Semiconductor's stock has seen a rise of over 3%, with a current price of HKD 43.7 and a trading volume of HKD 1.19 billion, reflecting positive market sentiment towards the company's performance and outlook [1]. Financial Performance - In Q2, Hua Hong Semiconductor reported revenue of USD 566 million, representing an 18% year-over-year increase and a 5% quarter-over-quarter increase, aligning with market expectations [1]. - The company has maintained an approximate 18% year-over-year revenue growth over the past three quarters, indicating consistent performance [1]. Profitability and Margins - The gross margin is expected to improve steadily in Q1, Q2, and Q3 of this year, despite rising depreciation pressures [1]. - Goldman Sachs projects Q3 revenue guidance to grow by 10% to 13% quarter-over-quarter, with expected gross margins between 10% and 12%, which is higher than previous expectations [1]. Capacity Expansion and Market Outlook - The recovery in downstream semiconductor demand and the stable release of capacity from Hua Hong's second 12-inch production line in Wuxi are driving revenue growth [1]. - Goldman Sachs holds a positive view on Hua Hong's 12-inch capacity expansion, believing it will support long-term growth and optimize 40nm and 55nm products [1].

Core Viewpoint - Goldman Sachs reports that Hua Hong Semiconductor (01347) expects a 10% to 13% quarter-over-quarter revenue growth for Q3, with a gross margin forecast of 10% to 12%, indicating a positive outlook for the company's recovery [1] Revenue and Margin Guidance - Q3 revenue guidance aligns with Goldman Sachs and market expectations, while the gross margin guidance exceeds expectations by 1.1 and 1.8 percentage points, reflecting the company's optimistic recovery outlook [1] - The company implemented a price adjustment in Q2, with an increase in the single-digit percentage range, expected to impact Q3 and Q4 results [1] Capacity Expansion and Long-term Growth - Goldman Sachs maintains a positive view on Hua Hong's 12-inch capacity expansion, believing it will drive long-term growth and optimize 40nm and 55nm products [1] - Management anticipates that strong demand from the first half of the year will continue into the second half, with expectations for sustained capacity release from the second 12-inch fab [1] Earnings and Profit Forecast Adjustments - Based on Q3 guidance and Q2 performance, Goldman Sachs has reduced Hua Hong's 2025 earnings forecast by 23% and revenue forecast by 2%, while increasing gross margin forecast by 3% [1] - The operating loss forecast has been widened from $84 million to $104 million to reflect anticipated increased operating expenses from the second 12-inch fab, while net profit forecasts for 2026 to 2029 have been adjusted upward by 1% each year [1]

Core Viewpoint - Goldman Sachs reports that Hua Hong Semiconductor (01347) expects a 10% to 13% quarter-on-quarter revenue growth for Q3, with a gross margin forecast of 10% to 12%, indicating a positive outlook for the company's recovery [1] Group 1: Revenue and Margin Guidance - Q3 revenue guidance aligns with Goldman Sachs and market expectations, while the gross margin guidance exceeds expectations by 1.1 and 1.8 percentage points respectively [1] - The company anticipates that strong demand from the first half of the year will continue into the second half, with the second 12-inch fab's capacity expected to be gradually released [1] Group 2: Price Adjustments and Financial Forecasts - Hua Hong Semiconductor implemented a price adjustment in Q2, with an increase in the single-digit percentage range, with related impacts expected to manifest in Q3 and Q4 [1] - Based on Q3 guidance and Q2 performance, Goldman Sachs has reduced the 2025 earnings forecast for Hua Hong Semiconductor by 23% and revenue forecast by 2%, while increasing gross margin forecast by 3% [1] - Operating loss forecast has been widened from $84 million to $104 million, reflecting anticipated increased operating costs for the second 12-inch fab, while net profit forecasts for 2026 to 2029 have been raised by 1% annually [1] Group 3: Capacity Expansion and Long-term Growth - Goldman Sachs maintains a positive view on Hua Hong's 12-inch capacity expansion, believing it will drive long-term growth and optimize 40nm and 55nm products [1] - The target price for Hua Hong Semiconductor has been raised to HKD 46.9 [1]