GlobalFoundries Inc

Strong Q2 performance; margin expansion beat guidance - Revenue: $1.786B, +6% YoY and +9% sequentially. - Gross margin: ~29.9%, above the high end of guidance; +470 bps YoY (driven by mix, structural cost improvement, and higher productivity/utilization). - Non-IFRS message: gross margin expansion is on track to hit ~30% by well before end of 2026 (company cited another ~450 bps implied from Q2 → Q3 midpoint guidance).

AI data center growth upgraded materially (biggest positive surprise/opportunity) - Communications infrastructure & data center revenue: ~16% of total, +62% YoY and +20% sequential (7 straight quarters of double-digit YoY growth; fastest since 2022). - Company upgraded full-year 2026 growth expectation for this end market to ~50%–60% YoY (from prior high 30s%). - Why: accelerating optical networking demand across silicon photonics and silicon germanium (SiGe); also emerging power demand.

Silicon photonics/SiGe momentum and capacity plan (plus government support) - Silicon photonics: company expects silicon photonics revenue (within the comms infra & data center segment) to more than double in 2026 vs 2025, citing capacity ramp and demand strength. - Design wins: Q2 secured 7 new optical networking design wins, including across major hyperscalers/networking players and pluggable transceiver ecosystems. - Roadmap: progress toward higher bandwidth (e.g., 200G/lane now in high-volume manufacturing, 400G capability demonstrated, higher bandwidth in development). - CHIPS Act / U.S. Dept. of Commerce LOI: $300M to accelerate next-gen silicon photonics (materials + modulated tech + packaging for near/co-packaged optics such as SCALE-enabled architectures). - Challenge acknowledged: still capacity constrained in the segment, but management believes fab footprint and productivity improvements will allow meeting growth into the back half of 2026 and 2027.