(Bloomberg) — GlobalFoundries Inc., the biggest U.S.-based provider of made-to-order semiconductors, gave a bullish forecast for the current quarter, indicating the rush to get chips continues amid industrywide shortages.
Sales will be $1.88 billion to $1.92 billion in the period ending in March, the Malta, New York-based company said Tuesday in a statement. Profit, excluding certain items, will be 21 to 27 cents a share. Those predictions compare with analysts’ average estimates of $1.84 billion and 14 cents a share.
GlobalFoundries, majority owned by the government of Abu Dhabi, began life as a publicly traded company last October. The chipmaker, which is a fraction of the size of market leader Taiwan Semiconductor Manufacturing Co., is trying to carve out a larger slice of the market for outsourced semiconductor production.
Chief Executive Officer Tom Caulfield and his counterparts at other chipmakers are trying to convert the demand spike into long-term commitments from customers with the aim of stabilizing their growth and profitability. They also hope to increase capacity by using proposed government incentives to build facilities in the U.S. and Europe.
Investors should have confidence that the industry is going to avoid past cycles of boom followed by gluts if sales double as projected to $1 trillion in 10 years, Caulfield said in an interview. Current plans for factory expansion still won’t keep up with that pace of growth, he said. Furthermore, GlobalFoundries is only adding capacity when it gets financial commitments from customers who are seeking guaranteed supply. Chipmakers are no longer building plants based on forecasts hoping orders will show up, he said.
GlobalFoundries shares have increased 19% to $56.05 since October when a slice of the company began trading on the public markets, beating overall gains by chip stocks. They rose about 3.5% in extended trading following the report.
Fourth-quarter revenue jumped 74% to $1.85 billion. Profit was 18 cents a share, excluding certain items. Analysts, on average, projected $1.81 billion and 9 cents, according to data compiled by Bloomberg.
(Updates with comments from CEO in the fifth paragraph.)
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