Summary for earnings call transcript released in Q1 2023:
- Analyst sentiment declined 2% in Q1 2023 over Q4 2022, while management sentiment was down 1%
- The company discussed higher pricing strategies and cost-cutting to offset inflation headwinds
- CapEx for the full-year 2023 is expected to be approximately $2.25 billion. The company also discussed the reduction of CapEx
- Signing of long-term customer agreements helped reduce volatility and improve certainty
Rinaldo Pereira, Business Fundamentals Analyst at GlobalData, comments: “In its past earnings call, GlobalFoundries announced plans to invest in expanding its capacity and advancing its technology to meet the increasing demand in the auto industry. The company recognizes the importance of balancing investments, as it expects capacity shortages. In Q1 of 2023, the top keywords around investment discussions were ‘capacity’, ‘United States’, and ‘Malta’. Despite the discussions around a decrease in CapEx, GlobalFoundries plans to expand its Fab 8 facility in Malta, New York, and to continue investing in all regions.”
GlobalData’s Company Filing Analytics database reveals that most of GlobalFoundries’ CapEx were allocated to its Singapore ramp, but the company is also investing in other countries, such as Germany and the US. The company aims to be more CapEx efficient to align with customer needs and productivity. It remains on track to achieve its wafer capacity goals despite reduced CapEx.
Pereira concludes: “Although the company anticipates potential capacity limitations, especially in crucial technologies, it is taking action to overcome these obstacles. One such measure is the approval of a chip factory in France and the acquisition of 800 acres of land for an additional chip fab in Malta, New York.”
