In 2018, GlobalFoundries shifted its focus from developing cutting-edge sub-10nm process technologies to concentrating on specialty process technologies, citing financial challenges and competition with industry leaders TSMC and Samsung. The company's recent earnings call revealed that some clients are transitioning to other foundries due to faster adoption of sub-10nm technologies than GlobalFoundries anticipated.
GlobalFoundries CEO, Tom Caulfield, acknowledged weaknesses in the communications infrastructure and data center segment, attributing this to prolonged inventory digestion and accelerated node migration. Companies often migrate to single-digit nanometer nodes (e.g., 5nm, 7nm) to achieve higher performance, lower power consumption, reduced costs through die size reduction, and a combination of these factors. GlobalFoundries' best available node is its 12LP+ fabrication process, offering improvements over its previous technologies but falling short in transistor density, performance, and power compared to 7nm-class nodes from competitors.
As a result, GlobalFoundries is pivoting its excess capacity towards automotive and smart mobile devices, as well as remaking revenue breakdowns. While communication infrastructure and data center segments saw a decline in revenue share, automotive-related revenue increased significantly, presenting a positive outlook for the company.
The company's 2023 revenue totaled $7.392 billion, declining from $8.108 billion in 2022 due to inventory adjustments and client migration. Despite this, GlobalFoundries remained profitable, earning $1.018 billion in 2023. These shifts in the market and the company's response illustrate the ongoing challenges and adaptations in the semiconductor industry.
