As recent earnings reports showed how many semiconductor designers struggled during the latter half of 2022, one of the world’s biggest foundry firms just weighed in with another solid earnings report.
GlobalFoundries posted revenue growth of 14% year-over-year for the fourth quarter of 2022, as sales increased to a record $2.1 billion for the period, beating the consensus estimate of $2.08 billion for the quarter. For the full year of 2022, GlobalFoundries’ revenue was up 23% to a little over $8.1 billion.
The sales surge also came after a strong report for the third quarter of 2022, both despite an industry-wide inventory correction. GlobalFoundries CEO Thomas Caulfield acknowledged that correction, which has led to some job cuts and other cost-saving moves at the company, but added that GlobalFoundries will continue to work closely with its customers through demand fluctuations.
“We've continued to implement a long term partnership-driven model with our industry, which is driving improved visibility for our business through this period of macroeconomic uncertainty,” Caulfield said. “In 2022, we added 10 additional customers under long term agreements, for more than $5 billion incremental revenue over their lifetime. Going forward, we continue to have strong alignment between our customers’ needs, the certainty and security of supply, and our capacity to provide long-term dedicated foundry services.”
Regarding those long-term agreements, GlobalFoundries recently landed a major deal with General Motors. Company executives also said they see the automotive and home and industrial IoT markets growing at robust rates, and offsetting recent lower demand in the mobile handset market.
The recent revenue growth also arrived despite the fact that wafer shipments were down for the fourth quarter and up only slightly for the full year.
As GlobalFoundries, CFO Dave Reeder explained on the company’s earnings call, “We shipped approximately 580,300 millimeter wafers [in Q4 2022, about 7% less than the same quarter in 2021] but the average selling price per wafer increased approximately 20% year-over-year driven by ramping long term customer agreements with better pricing, as well as continued improvement in product mix.”
While the company celebrated record revenue and a fifth straight quarter of revenue growth since the fourth quarter of 2021, Reeder indicated GlobalFoundries will continue to be cautious. The company said it now sees first quarter 2023 revenue coming in at about $1.81 billion to $1.85 billion against $1.82 billion estimates.
GlobaFoundries stock price jumped in the hours after the company delivered its report. It was up more than 7% to about $71 per share around mid-afternoon Tuesday.