MALTA, N.Y. - GlobalFoundries (NASDAQ: NASDAQ:GFS) and NXP Semiconductors (NASDAQ: NASDAQ:NXPI) have announced a collaboration to enhance solutions across several markets, including automotive, IoT, and smart mobile devices. The partnership is set to leverage GlobalFoundries' 22FDX® process technology and its manufacturing presence in Dresden, Germany, and Malta, New York.
The collaboration aims to optimize the power and performance of NXP's products, facilitating compact and energy-efficient solutions. The 22FDX platform is designed to deliver up to 50% higher performance and use 70% less power compared to other planar CMOS technologies, making it suitable for demanding applications.
Andy Micallef of NXP highlighted the platform's power efficiency and performance as enabling factors for the next generation of connected solutions. Niels Anderskouv of GlobalFoundries emphasized the decade-long partnership's strength and the mutual vision to enhance NXP’s offerings.
The 22FDX technology integrates multiple functions onto a single die, including digital, analog, RF, power management, and non-volatile memory, which is particularly beneficial for Edge AI processors. The platform is also qualified for Automotive Grade 1 and 2 applications, ensuring reliability in extreme conditions and is part of GlobalFoundries' AutoPro™ solutions.
GlobalFoundries, known for its semiconductor manufacturing, has shipped over 3 billion FDX chips globally. The company's ongoing innovation in FDX and FDX+ platforms is expected to support NXP's solutions in the future.
This collaboration builds on the companies' previous joint development of 40nm NVM technology. With a focus on power-efficient, high-performance products, GlobalFoundries serves high-growth markets with a global manufacturing footprint. NXP Semiconductors, with a revenue of $13.28 billion in 2023, provides solutions that aim to improve connectivity and security in various industries.
The information provided is based on a press release statement from the companies involved.
In other recent news, GlobalFoundries, a prominent semiconductor manufacturer, reported strong Q2 revenues of $1.632 billion, surpassing its guidance. Despite a 12% year-over-year revenue decrease, the company maintained a steady average selling price per wafer, shipping about 517,300-millimeter equivalent wafers. This success was driven by design wins in the automotive and smart mobile device sectors, as well as the acquisition of Tagore Technologies' gallium nitride power business.
TD Cowen recently adjusted its outlook on GlobalFoundries, lowering the price target from $65.00 to $55.00 while maintaining a Buy rating. The firm noted signs of improvement in GlobalFoundries' fundamentals, including a positive seasonal uptick in demand, but highlighted challenges due to excess inventory in the industrial and IoT sectors. The analyst anticipates a modest increase in the core GM for the third quarter, projecting an improvement of approximately 70 basis points due to higher unit sales.
Looking forward, GlobalFoundries expects its Q3 revenue to be between $1.7 billion and $1.75 billion. The company also forecasts a revenue-high water mark of $8.1 billion or $8.2 billion in 2022, leveraging factory fungibility. Long-term agreements, particularly in the automotive sector, are viewed as crucial, with $18 billion of lifetime revenue attached to existing LTAs. These are the latest developments in the semiconductor industry.
InvestingPro Insights
GlobalFoundries' collaboration with NXP Semiconductors comes at a crucial time for the semiconductor industry. According to InvestingPro data, GlobalFoundries has experienced a revenue decline of 12.39% over the last twelve months as of Q2 2024, with quarterly revenue also dropping by 11.54% in Q2 2024. This partnership could potentially help offset these declines by expanding GlobalFoundries' market reach and technological offerings.
Despite the revenue challenges, GlobalFoundries maintains a strong financial position. The company's liquid assets exceed its short-term obligations, and it operates with a moderate level of debt. This financial stability provides a solid foundation for the company to invest in collaborative efforts and innovative technologies like the 22FDX platform.
InvestingPro Tips highlight that GlobalFoundries is a prominent player in the Semiconductors & Semiconductor Equipment industry, which aligns with its strategic partnership with NXP. However, the stock price has fallen significantly over the last three months, trading near its 52-week low. This could present an opportunity for investors who believe in the long-term potential of this collaboration and GlobalFoundries' technological advancements.
It's worth noting that analysts predict GlobalFoundries will remain profitable this year, despite expectations of a sales decline. The company's P/E ratio (adjusted) of 24.93 suggests that investors are still pricing in growth expectations, possibly influenced by partnerships like the one with NXP.
For readers interested in a deeper analysis, InvestingPro offers 11 additional tips for GlobalFoundries, providing a more comprehensive view of the company's financial health and market position.
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