Summary of GlobalFoundries Conference Call Company Overview - **Company**: GlobalFoundries (NasdaqGS: GFS) - **Date**: December 02, 2025 - **Speakers**: Tim Arcuri (Analyst, UBS), Tim Breen (CEO), Sam Franklin (CFO) Key Industry Insights Demand Environment - The demand environment has improved compared to previous quarters, with a notable recovery from the macroeconomic weakness experienced in early 2023 [6][7][8] - Data centers are experiencing strong demand, with expectations of continued growth as the build-out phase is just beginning [8] - The automotive sector has shown significant growth, with GlobalFoundries' automotive business approaching $1.5 billion, reflecting double-digit growth despite a flat market [9] Geopolitical Environment - Geopolitical uncertainties have led to a shift in sourcing strategies, with companies increasingly seeking non-China and non-Taiwan supply chains [12][13] - U.S. sourcing has become a critical factor in new platform decisions, providing a long-term tailwind for GlobalFoundries [13][16] Market Dynamics - The company has seen a strong share story in various markets, particularly in automotive and data centers, despite some markets being weaker overall [8][9] - The automotive sector is expected to continue growing due to increased content requirements in vehicles, even if unit sales remain flat [26] Financial Performance Revenue and Margins - Non-wafer revenue has shown strong momentum, expected to reach approximately 13% of total revenue in the fourth quarter [41][44] - The company aims for a gross margin of 30% by the end of the year, with current guidance suggesting a range of 28.5% to 29.5% [54][59] - The strategic focus on diversifying revenue streams and improving product mix is expected to enhance profitability [58][60] Future Outlook - The company anticipates significant growth in the Silicon Photonics segment, projected to reach $1 billion by 2030 [34] - The acquisition of MIPS is expected to enhance the company's capabilities in RISC-V processor IP, with potential non-wafer revenue upwards of $100 million next year [47][50] Strategic Initiatives Product Development - GlobalFoundries is focusing on enhancing its technology suite for automotive applications, including high-performance microcontrollers and secure imaging [25] - The company is investing in design capabilities to accelerate customer projects and improve time-to-market [40] Capital Allocation - Free cash flow is projected to exceed $1 billion in 2025, leading to discussions about potential capital returns to shareholders through buybacks or dividends [61] Conclusion - GlobalFoundries is well-positioned to capitalize on improving market conditions, geopolitical shifts, and growing demand in key sectors such as automotive and data centers. The focus on diversifying revenue streams and enhancing product offerings is expected to drive future growth and profitability.

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]