GlobalFoundries forecast second-quarter revenue and profit slightly above Wall Street estimates on Tuesday, in a sign that the contract chipmaker was seeing stable demand despite choppy auto production and a soft smartphone market.
U.S. President Donald Trump’s sweeping global tariff plans have threatened to upend the semiconductor industry. Tariffs on automakers – the third largest end-market for GlobalFoundries – have already kicked in, roiling the sector.
However, tariffs on foreign-made chips could help U.S. manufacturers like GlobalFoundries by helping redirect customers toward chips being made in U.S. factories, outgoing CEO Thomas Caulfield has said.
GlobalFoundries said on Tuesday it saw an increase in its automotive segment in the first quarter ended March 31 from a year ago.
Still, the smartphone market – the company’s biggest revenue segment – is facing pressure, with estimates pointing to a decline in smartphone demand this year.
Policy uncertainty is also clouding the chip industry, which is bracing for potential changes to the CHIPS Act, a 2022 law that made $52.7 billion in subsidies available for domestic semiconductor chips manufacturing and production.
The world’s third-largest chipmaker, GlobalFoundries, expects net revenue of $1.68 billion, plus or minus $25 million, in the second quarter. Analysts on average expect revenue of $1.67 billion, according to data compiled by LSEG.
The company projected adjusted per-share profit of 36 cents, plus or minus 5 cents, compared with estimates of 35 cents.
It reported total revenue of $1.59 in the first quarter, a touch above expectations of $1.58 billion. Adjusted earnings of 34 cents beat estimates of 28 cents.
Reuters reported in March GlobalFoundries and Taiwanese chipmaker United Microelectronics Corp were looking into the possibility of a merger. UMC in April, however, said there was no on-going merger activity at the time.
