GlobalFoundries Q3 2026 Revenue Rises 13% as Margins Expand

GlobalFoundries Inc. (Nasdaq: GFS) reported a 13% year-over-year increase in third-quarter 2026 revenue and a record non-IFRS gross margin, as rapid growth in communications infrastructure, data centers and IoT more than offset a decline in smart mobile devices. The semiconductor manufacturer also projected fourth-quarter revenue of about $2.00 billion, pointing to further sequential growth.

Revenue for the quarter ended September 30 rose to $1.899 billion from $1.688 billion a year earlier and increased 6% from the second quarter. GlobalFoundries said revenue and non-IFRS profitability exceeded the midpoints of its guidance ranges.

Non-IFRS gross margin expanded by 540 basis points year over year to 31.4%, which the company attributed to a continued structural shift in its business mix. Non-IFRS operating margin rose 250 basis points to 17.9%, while non-IFRS net income increased 28% to $298 million. Non-IFRS diluted earnings per share climbed 29% to $0.53.

On an IFRS basis, gross margin increased to 30.1% from 24.8%, and operating profit rose 18% to $230 million. However, the company recorded a net loss of $270 million, or $0.49 per diluted share, compared with net income of $249 million, or $0.44 per share, a year earlier. The latest quarter included a $441 million non-cash charge related to shares issued to the U.S. government, reflected in other expense and excluded from GlobalFoundries’ non-IFRS results.

Non-IFRS adjusted EBITDA advanced 13% to $647 million, representing a 34.1% margin. Wafer shipments increased 7% to 647,000 units on a 300-millimeter-equivalent basis.

Data Center and IoT Growth Reshapes Revenue Mix

Communications Infrastructure and Data Center revenue surged 81% to $316 million, marking the segment’s eighth consecutive quarter of double-digit percentage growth. GlobalFoundries said silicon photonics and silicon germanium products supported the increase, reflecting demand for optical networking. The company also secured silicon photonics and SiGe design wins with a new optical transceiver customer serving hyperscaler demand.

Home and Industrial IoT revenue rose 49% to $384 million, supported by strength across connectivity, tracking and sensing applications. GlobalFoundries reported customer activity tied to edge-AI workloads and higher performance requirements for Bluetooth, wireless, cellular and power-management components.

Automotive revenue increased 20% year over year and 11% sequentially to $368 million, accounting for about 19% of quarterly revenue. Management said the business remained on track for low-double-digit percentage growth in 2026.

Those gains offset continued weakness in Smart Mobile Devices, where revenue declined 19% to $611 million and fell 5% sequentially. The segment represented 32% of total revenue, its lowest proportion in the company’s history. GlobalFoundries nevertheless reported new design wins across smartphones and smart glasses, including additional power content and its first fuel-gauge integrated-circuit design win in premium handsets.

Technology Services revenue increased 12% to $220 million.

Manufacturing Agreements Target AI, Optical and Power Demand

GlobalFoundries highlighted several long-term manufacturing initiatives. The company announced a multiyear, $2 billion agreement with Taiwan Semiconductor Manufacturing Co. to establish U.S.-based silicon interposer supply for TSMC’s CoWoS advanced-packaging ecosystem. Capacity will be added at GlobalFoundries’ Malta, New York, facility, with volume production expected to begin in the first half of 2028 under an initial five-year term.

The company also expanded its agreement with Marvell Technology to add SiGe capacity in Burlington, Vermont, for next-generation optical connectivity. Separately, a long-term manufacturing agreement with Monolithic Power Systems will deploy MPS process technology at GlobalFoundries’ 300-millimeter facility in Singapore, with expanded power-management capacity expected in early 2027.

GlobalFoundries is also supporting a planned expansion at its Malta site through a special-purpose vehicle owned by the U.S. and Japanese governments. The presentation indicated that as much as $21 billion could fund two phases under the U.S.-Japan Trade Deal, with each phase expected to provide approximately 900,000 wafers of annual capacity on a 300-millimeter-equivalent basis at full run rate. Construction of the first phase is underway, while the second remains subject to approval.

Fourth-Quarter Outlook and Cash Allocation

For the fourth quarter, management expects revenue of $2.00 billion, plus or minus $25 million. The company projects IFRS gross margin of 30.7%, plus or minus 100 basis points, and non-IFRS gross margin of 31.5%, with the same range. IFRS diluted EPS is expected to be $0.47, plus or minus $0.05, while non-IFRS diluted EPS is forecast at $0.59, plus or minus $0.05.

GlobalFoundries continues to expect a full-year 2026 non-IFRS adjusted free-cash-flow margin of approximately 10%. Year-to-date operating cash flow totaled $1.288 billion, while non-IFRS adjusted free cash flow was $366 million, equal to 7% of revenue. Cash, cash equivalents and marketable securities stood at $3.2 billion at quarter-end.

The company repurchased $100 million of ordinary shares during the quarter. Its board also approved a quarterly dividend of $0.12 per share, payable January 14, 2027, to shareholders of record on December 22, 2026.

The outlook remains subject to geopolitical and trade tensions, tariffs and export controls, uncertain market recovery, execution risks surrounding capacity expansion and partnerships, and the timing or availability of government funding. GlobalFoundries also identified potential operating volatility, economic weakness, cybersecurity incidents and technology disruptions as material uncertainties.