GlobalFoundries announces $16 billion U.S. chip expansion

MALTA, N.Y. - GlobalFoundries (NASDAQ: GFS), a key player in semiconductor manufacturing with a market capitalization of $20.45 billion and strong financial health indicators according to InvestingPro, has revealed a $16 billion investment to enhance its semiconductor production and advanced packaging capabilities in New York and Vermont. The company maintains a robust balance sheet with more cash than debt and a healthy current ratio of 2.51, positioning it well for this significant expansion. This move aligns with the growing demand for artificial intelligence (AI) applications and the need for power-efficient, high-performance semiconductors.

The investment is supported by major technology firms, including Apple, SpaceX, AMD, Qualcomm Technologies, Inc., NXP, and GM. These companies have expressed their commitment to reshoring semiconductor production in the U.S. and are partnering with GlobalFoundries to secure a domestic supply of essential chips. Trading at $36.87, analysis suggests the stock is currently undervalued, presenting a potential opportunity for investors interested in the semiconductor sector.

Tim Breen, CEO of GlobalFoundries, emphasized the company’s role in advancing innovation and strengthening supply chain resiliency in the U.S. He mentioned the AI revolution’s impact on the demand for technologies like silicon photonics and GaN for power applications, which GlobalFoundries is equipped to produce domestically.

U.S. Secretary of Commerce, Howard Lutnick, highlighted the investment as a testament to the Trump Administration’s objective to bring semiconductor manufacturing back to America, securing capacity and technological capabilities for future generations.

GlobalFoundries’ strategic investment includes more than $13 billion already allocated for the expansion and modernization of its facilities in New York and Vermont, and an additional $3 billion for advanced research and development in packaging innovation, silicon photonics, and next-generation GaN technologies.

The company’s efforts are expected to bolster U.S. semiconductor leadership and accelerate innovation in sectors such as AI, aerospace, automotive, and high-performance communications.

Statements from leaders of partnering companies, including Apple’s CEO Tim Cook and SpaceX’s president Gwynne Shotwell, expressed their support for GlobalFoundries’ expansion, underscoring the importance of U.S.-made semiconductors in their respective industries.

The press release indicates that this announcement is a direct outcome of President Trump’s vision for the U.S. manufacturing sector and aims to create high-paying jobs and secure domestic supply chains for critical technologies.

This report is based on a press release statement from GlobalFoundries.

In other recent news, GlobalFoundries Inc. reported its financial results for the first quarter of 2025, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $0.34, exceeding the forecast of $0.29, and reported revenue of $1.59 billion against the expected $1.58 billion. Despite this earnings beat, the stock price experienced a decline, possibly due to broader market conditions or specific company challenges. GlobalFoundries continues to focus on automotive and communications sectors, with nearly 90% of design wins being sole-sourced, contributing to significant revenue growth in these areas. Looking ahead, the company has set its revenue guidance for the second quarter of 2025 at $1.675 billion, with a potential impact from tariffs estimated at $20 million annually. The firm’s gross margin target remains at 30% by the end of 2025, supported by strategic investments and cost management. Analysts from firms such as Evercore ISI and Cantor Fitzgerald have shown interest in the company’s strategies for managing tariff impacts and growth prospects, particularly in the automotive sector.

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