GLOBALFOUNDRIES(US:GFS)2022-02-09 03:03Financial Data and Key Metrics Changes - Fourth quarter revenue was approximately $1.85 billion, a 9% sequential increase driven by higher wafer shipments, ASPs, and non-wafer revenue [32] - Full year revenue reached approximately $6.6 billion, representing a 36% year-over-year increase [34] - Adjusted gross profit for the fourth quarter was $397 million, translating to a 21.5% adjusted gross margin, with a 346 basis points sequential improvement [35] - Fourth quarter adjusted net income was approximately $98 million, resulting in earnings of $0.18 per share [38] Business Line Data and Key Metrics Changes - Smart mobile device end market accounted for about 48% of fourth quarter revenue, growing roughly 24% year-over-year [16] - Communications infrastructure and data center end market constituted approximately 16% of fourth quarter revenue, with a sequential growth of 7% [18] - Home and industrial IoT end market revenue was roughly 14% of total, growing approximately 20% year-over-year [19] - Automotive end market revenue was about 5% of total fourth quarter revenue, more than doubling from a year ago [20] Market Data and Key Metrics Changes - The smart mobile device market grew approximately 38% over 2020, outpacing smartphone industry growth [16] - Silicon photonics revenue almost tripled in 2021, with expectations to more than double again in 2022 [18] - The market for image sensing processors is expected to grow over 25% in 2022 [17] Company Strategy and Development Direction - The company aims to increase output by more than 50% by the end of 2023 compared to 2020 through capacity additions in various locations [13] - The strategy includes investing 20% of revenue on CapEx to ensure consistent growth and strong free cash flow [14] - The company is focused on long-term agreements with customers to secure visibility for future growth [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the semiconductor industry's growth, expecting to chase capacity to meet demand for the next five years [109] - The company anticipates strong revenue growth in 2022, with expectations of high single-digit growth in ASPs [48][49] - Management highlighted the importance of partnerships with customers to ensure demand certainty before making investments [69] Other Important Information - The company plans to invest approximately $4.5 billion in CapEx for 2022 to support capacity expansion [43] - Cash flow from operations for the fourth quarter was approximately $1.15 billion, including significant customer prepayments [40] Q&A Session Summary Question: ASP progression for 2022 - Management expects ASPs to grow about 10% year-over-year, with volume increasing in the high single digits [48][49] Question: Margin progression for 2022 - Management discussed factors driving margins, including disciplined CapEx and improved fixed cost absorption [51][52] Question: Growth drivers for 2022 - Automotive and home/industrial IoT markets are expected to drive the strongest growth, with smart mobile devices growing at the enterprise average [63] Question: CHIPS Act funding impact - Management indicated that while they will leverage government support, investments are primarily driven by customer demand [69][72] Question: Supply-demand balance in the industry - Management believes the industry will continue to experience a supply-demand imbalance for the next five years [109] Question: Equipment supply conversations - Management reported that they have managed to secure equipment orders early, mitigating potential supply chain issues [100]