GlobalFoundries tops second quarter estimates on AI chip demand

GlobalFoundries GFS.O reported second-quarter revenue above Wall Street estimates on Wednesday, as growing demand for its chips used in data centers boosted sales.

• GlobalFoundries makes specialty chips for communications, data centers, automotive, industrial and consumer electronics companies.
• The company reported second-quarter revenue of $1.79 billion; analysts on average estimated $1.77 billion, according to data compiled by LSEG.
• Adjusted diluted earnings per share came in at 46 cents, above analysts' estimate of 44 cents.
• Spending on artificial intelligence infrastructure has increased demand for its silicon photonics chips, which use light instead of electrical signals to move data faster inside AI data centers.
• The specialty chip maker forecast third-quarter revenue of $1.89 billion, plus or minus $25 million, roughly in line with analysts' estimate of $1.88 billion.
• Adjusted free cash flow was negative $3 million, compared with positive $277 million a year earlier.
• In March, Global Foundries sued Israel-based rival Tower Semiconductor TSEM.TA alleging the Israeli chipmaker infringed 11 patents related to manufacturing chips used in smartphones and other electronics.