In its short 14-year history, GlobalFoundries has risen to become the world’s third-largest chip foundry. Based in upstate New York, GlobalFoundries isn’t a household name because it’s manufacturing semiconductors that are designed and sold by other companies.
But it’s quietly helping power nearly every connected device.
“Look at every electronic device in your house, and I would bet you money that every one of those devices has at least one GlobalFoundries chip in it,” Thomas Caulfield, GlobalFoundries CEO, told CNBC.
GlobalFoundries chips are inside everything from smartphones and cars to smart speakers and Bluetooth-enabled dishwashers. They’re also in the servers running generative artificial intelligence models, a market that’s booming so quickly that chipmakerNvidia has surpassed a $1 trillion market cap and is forecasting 170% sales growth this quarter.
Within generative AI, GlobalFoundries isn’t focused on making the powerful graphics processing units (GPUs) used to train large language models like ChatGPT. Instead, the company is manufacturing chips that perform functions like power management, connecting to displays, or enabling wireless connections.
Caulfield says AI is “the catalyst for our industry to double in the next eight years and GF will have its fair share, if not more, of that opportunity.”
Now, as tensions with China raise concerns over the world’s reliance on TSMC, and the U.S. and China play technological tug-of-war with export controls, GlobalFoundries finds itself positioned well outside the geopolitical crosshairs. The company has spent about $7 billion to expandproduction in Singapore, Germany, France and upstate New York.
CNBC went to Malta, New York, for a firsthand look at the fabrication plant where GlobalFoundries is adding 800 acres, to ask how the company plans to stay ahead while developing the older chips still essential for everyday devices.
‘It worked out for everybody’
The story began in 2009, when Advanced Micro Devices decided to break off its manufacturing operations into a separate company and focus entirely on designing chips. The newly formed GlobalFoundries took over AMD’s chip fabrication plant, or fab, in Dresden, Germany. At the time, it was a joint venture between AMD and the government of Abu Dhabi’s tech investment arm. Moorhead was working at AMD.
“Our founder, Jerry Sanders, at AMD said, ‘real men have fabs.’ So the thought of spinning out the fab from AMD into its own company was a really big deal,” Moorhead said. AMD “had to do it,” he added, because “the expenses for a leading edge fab were doubling every two or three years. And right now we’re looking at investments of campuses upwards of $100 billion.”
“I think it worked out for everybody,” Moorhead said.
GlobalFoundries started building its new fab, and future headquarters, in Malta in 2009. The next year, it expanded into Singapore with the purchase of Chartered Semiconductor. By 2015, it had acquired IBM‘s in-house semiconductor division, taking over production sites in Vermont and New York. By 2018, GlobalFoundries was a $6 billion business.
“Unfortunately, it had a strategy that was not able to produce profitability or free cash flow,” said Caulfield. “So in 2018, when I became the CEO of GlobalFoundries, we decided to make a strategic pivot to focus all our energy, all our R&D, all of our capital deployment to go be the very best at these essential chips. And that began a journey to turning our company around to profitability.”
To this day, GlobalFoundries only makes 12-nanometer chips and above, or what it calls “essential” chips.
GlobalFoundries CEO Thomas Caulfield shows a 300mm wafer to CNBC’s Katie Tarasov at Fab 8 in Malta, New York, on September 5, 2023.
Carlos Waters
“If you do secure pay transactions, whether it’s on your credit card or on your smart mobile device, we make the chip that does that,” Caulfield said. “Do you like the photographs your camera takes? Well, we make image sensor processors that drive that camera. Do you like the battery life on your phone? We make the PMICs, the power management ICs that make sure that power is managed on these devices.”
During the 2021 chip shortage, GlobalFoundries told CNBC it sold out entirely. That same year, the company went public on the Nasdaq.
“Ultimately, we really need these chips,” said Daniel Newman, CEO of research firm Futurum Group. “We found that out because we had parking lots full of pickup trucks that couldn’t be shipped because they couldn’t put the ECU in or they couldn’t install power seats. So GlobalFoundries had a really strong market requirement.”
“Not only do we have a high concentration of semiconductor manufacturing in Taiwan between TSMC and UMC, but TSMC is twice the size of the other four companies combined,” Caulfield said.
TSMC makes more than 90% of the world’s most-advanced microchips, creating vulnerability during supply chain backlogs as well as risks tied to China’s continued threats to invade Taiwan. Like GlobalFoundries, TSMC also makes older nodes. Caulfield said GlobalFoundries is absolutely going after TSMC.
“Not only do we have aspirations, we think in certain areas we’ve won,” Caulfield said. He pointed to his company’s radio frequency chips and silicon on insulator technology.
“Silicon on insulator is a huge differentiator when it comes to power, and TSMC doesn’t use that,” Moorhead said.
At a time of geopolitical turmoil, GlobalFoundries is investing about $7 billion to add capacity in parts of the world with lower risk.
In Singapore, the company just completed a $4 billion expansion that it says makes it the country’s most-advanced fab. In June, it finalized a deal with STMicroelectronics to build a jointly owned fab in Crolles, France.
Not all global expansion endeavors have gone smoothly, however. In 2017, GlobalFoundries made big plans for a fab in Chengdu, China. In 2020, it backed out.
“It turned out we had three relatively large facilities around the world already that were severely underloaded,” Caulfield said. “Adding more capacity at a time when we couldn’t fill our existing capacity was just going to create a bigger economic hole for us.”
The U.S. has recently enacted a series of export bans on chip companies sending advanced tech to China. By only producing older nodes, GlobalFoundries says it’s been “very minimally” impacted.
Making chips in the U.S.
Although GlobalFoundries’ chips are considered legacy nodes, the process and resources needed are still incredibly complex. Caulfield said each silicon wafer goes through at least 1,000 steps over 90 days in the Malta fab. The process requires extensive cleaning, cooling and chemical treatment, which uses a lot of water. GlobalFoundries says Fab 8 uses about 4 million gallons of water a day, reclaiming 65% of that.
“Upstate New York is a very good place for access to high-quality and abundant water,” Caulfield said.
All the heavy machinery also requires about 2 gigawatts of power per day, according to Hui Peng Koh, who heads up the Malta fab. She said it’s enough power to “run a small city.”
“I would say our lowest-cost power is in the U.S.,” Caulfield said. “A lot of our power in upstate New York, where this facility is at, comes from hydroelectric, so it’s a greener power. In both Europe and Singapore, much of that power comes off of natural gas.”
Then there’s the manpower. GlobalFoundries has 13,000 employees worldwide. About 1,500 people report to Koh in Malta. She told CNBC it’s “challenging to attract talent to this part of the world.”
The high cost of materials and construction work also make building a fab in the U.S. more expensive than in much of Asia, so public subsidies have been key for reshoring production. GlobalFoundries said New York pitched in more than $2 billion for the Malta fab. The company also applied for funds from the $52 billion national CHIPS and Science Act. Focusing on 12-nanometer and above also helps the company keep costs down.
GlobalFoundries’ Fab 8 in Malta, New York, where Equipment Engineering Manager Chris Belfi led CNBC’s Katie Tarasov on a tour on September 5, 2023.
GlobalFoundries said it’s putting out 400,000 wafers per year from its Malta fab. While Caulfield wouldn’t put a dollar figure on the wafers, he said at any given time, there’s “about a half-billion dollars worth of inventory that’s running over those 90 days to create product.”
GlobalFoundries’ main customers for this massive output of essential chips are the world’s largest fabless chip companies, including Qualcomm, AMD, NXP and Infineon.
Eventually, many of its chips end up in the auto, aerospace, and U.S. defense industries.
GlobalFoundries is known for making “specialty chips” in big, exclusive deals, like one with Lockheed Martin in June for onshoring production of certain chips, and a recent $3 billion agreement with the U.S. Department of Defense.
Newman said GlobalFoundries has around 50 such long-term agreements.
“Effectively they’re saying, ‘We will create a stable margin commitment capacity and if the market shifts, we’re going to stand by the letter of our agreement,'” he said.
For companies hit hardest by the chip shortage, a deal with GlobalFoundries is a hedge against it happening again. In February, General Motors set aside exclusive production capacity at the Malta fab.
“GM, their lines got held up for very low-cost components because they couldn’t get enough,” Moorhead said. “What GM decided is that this is too much supply chain risk. We’re going to go directly to GF.”
GlobalFoundries says automotive is one of its fastest-growing segments. It makes many different kinds of chips for cars: the microcontrollers for power seats, airbags and braking; the sensing chips for cameras and Lidar; and battery management chips for electric vehicles.
Meanwhile, the growth of GlobalFoundries’ smartphone business is decelerating, alongside an industrywide slowdown. GlobalFoundries laid off 800 employees in December and January, and issued weaker-than-expected revenue guidance for the third quarter.
“Smart mobile devices last year represented 46% of our revenue,” Caulfield said. “While it grew last year, it was 50% the year before. So we’ve been trying to build our other business and to get more balanced, rather than having such a high exposure to smart mobile devices.”
A woman cleans the store window of the Amazon house after activists sprayed paint on its logo during a protest on the opening day of the 55th annual meeting of the World Economic Forum in Davos, Switzerland, on Jan. 20, 2025.
Yves Herman | Reuters
Amazon reported a 19% increase in online ad revenue in the first quarter, beating analysts’ estimates.
Ad sales climbed to $13.92 billion, while analysts on average were expecting $13.74 billion, according to StreetAccount.
The numbers were contained in Amazon’s first-quarter earnings report. The company reported total first-quarter sales of $155.67 billion, compared to Wall Street projections of $155.04 billion.
Although Amazon’s online ad business represents a fraction of overall sales, it has emerged in recent years to become the third-biggest platform in the global digital advertising market, behind only Alphabet and Meta.
Online advertising is a particular area of focus for investors due to economic uncertainty and increasing tensions between the U.S. and China over trade. While President Donald Trump’s China tariffs will likely affect Amazon’s core retail business, the company’s online ad unit could also feel some pain.
So far, tech companies with online ad businesses have reported solid first-quarter earnings, but warned of potentially tougher times later in the year.
Meta reported stronger-than-expected first-quarter earnings this week, but said ad sales in the Asia-Pacific region came in at $8.22 billion for the quarter, trailing analysts’ estimates of $8.42 billion.
The company’s finance chief Susan Li said during an earnings call that “Asia-based e-commerce exporters” have slowed their online ad spending likely due to the de minimis trade loophole ending this Friday.
When Alphabet reported first-quarter earnings last Thursday, it revealed that ad sales grew 8.5% year over year to $66.89 billion and YouTube ad revenue increased 10% to $8.93 billion. But Alphabet executives told analysts that it expects headwinds to its Asia-Pacific-focused advertising business.
Snap on Tuesday said it had “experienced headwinds to start the current quarter,” which resulted in the company saying it would not provide guidance.
Last week, Microsoft reported its latest quarterly earnings and said search and news advertising sales, minus payments to its affiliates, grew 15% year over year to $449 million.
Reddit also reported first-quarter earnings on Thursday that beat on sales and guidance. The company’s first-quarter sales soared 61% year over year to $392 million.
Although Reddit’s second-quarter guidance topped analysts’ projections, CEO Steve Huffman said there is some economic shakiness.
“Ever-shifting macro environments like these create both challenges and opportunities,” Huffman wrote in a letter to shareholders. “We’ve grown through challenging times before — people need connection and information just as much in uncertain times.”
Apple CEO Tim Cook, after nearly a month of anticipation from investors, on Thursday finally revealed how Apple was navigating the Trump administration’s tariffs.
The company only saw a “limited impact” on tariffs between January and the end of March, Cook told investors on an earnings call for the company’s second quarter results.
For the current quarter which ends in June, Apple is predicting about $900 million in additional costs for those tariffs — assuming nothing changes, Cook said. That surprised analysts who said on the call that they expected the costs to be higher.
The vast majority of Apple’s products are “currently not subject” to Trump’s reciprocal tariffs, Cook said. But beyond June, he didn’t say much.
“I don’t want to predict the future because I’m not sure what will happen with tariffs,” said Cook, adding that “it’s very difficult to predict beyond beyond June.”
Apple doesn’t usually give a lot of details or guidance beyond the current quarter, but investors didn’t like Thursday’s lack of clarity. Apple shares fell as much as 4% in extended trading on Thursday despite the company reporting results that beat Wall Street expectations for revenue and showed strong sales growth for iPads and Mac computers.
“As we look ahead, we remain confident,” Cook said.
Apple’s uncertainty highlights how even a company with a reputation for world-class operations can get whacked by the unpredictability of the Trump administration’s shifting tariff rates and dates.
Cook, who built his reputation in Silicon Valley as Apple’s operations guru, discussed how the company has dealt with the tariffs to minimize their impact so far on Thursday. He praised his old division on a call with analysts.
“‘l’ll just say that the operational team has done an incredible job around optimizing the the supply chain and the inventory,” he said.
Apple is currently sourcing American-bound products from India and Vietnam, Cook said. Those countries currently have 10% tariffs on them, and the company is sourcing Apple computers for rest of the world from China, which the Trump administration has hit with a 145% tariff rate.
Cook also said that Apple had built up inventory ahead of the tariffs, which would be reported as manufacturing purchase obligations in the company’s filings with the Securities and Exchange Commission. Cook said there was no “obvious evidence” that consumers were buying more Apple products ahead of tariffs.
“We do expect the majority of iPhones sold in the U.S. will have India as their country of origin,” Cook said. “Vietnam will be the country of origin for almost all iPad, Mac, Apple Watch and AirPods products sold in the U.S.”
Apple will still pay higher 145% tariffs on some Chinese imports for AppleCare, its extended warranty program, and accessories, Cook said.
One issue for forecasting tariffs going forward is that both Vietnam and India are in line to get hit with hefty tariffs on imported goods as soon as July.
Trump previously targeted both countries under his “reciprocal tariffs” on April 2, but a week later, he paused the tariffs for 90 days. Apple expanded its supply chain to those countries in recent years as a hedge for its business, but the Vietnam and India strategy won’t work if Trump’s tariffs ultimately take effect.
Cook also mentioned the possibility that technology products such as semiconductors might receive additional tariffs under a process called a Section 232 Investigation.
Apple is not the only big tech company to get rattled by the Trump administration’s tariffs.
Amazon finance chief Brian Olsavsky said Thursday that Amazon would offer a wider range of guidance because of tariff uncertainty, and he also alluded to the possibility of weakening consumer demand. Microsoft raised Xbox prices on Thursday, despite tariffs coming up just once on the company’s Wednesday earnings call.
Apple didn’t offer guidance for its profitable Services division on Thursday, but offered the same kind of top-line forecast that it has in previous quarters. Apple expects overall revenue to grow “low to mid-single digits” on an annual basis during the current quarter. Apple reported $85.78 billion in sales during the June quarter last year.
And at least during that quarter, Apple investors will know what to expect.
Nvidia’s CEO Jensen Huang delivers his keystone speech ahead of Computex 2024 in Taipei on June 2, 2024.
Sam Yeh | AFP | Getty Images
Nvidia CEO Jensen Huang has made tens of billions of dollars in recent years from his stake in the chipmaker, but he’s getting his first salary increase in a decade.
Huang’s base salary rose to $1.5 million, a 49% increase from 2024, according to a proxy filing with the SEC on Thursday. His variable cash also went up by $1 million, or 50%, from the 2024 fiscal year. Stock awards grew to $38.8 million, bringing total pay to $49.9 million.
The compensation committee “believed this was appropriate in consideration of internal pay equity with the base salaries” of other top executives, the filing said, and “it represented Mr. Huang’s first base salary increase in 10 years.”
Nvidia is in the midst of a boom that’s turned it into one of the most valuable companies in the world, thanks to its graphics processing units (GPUs) that power the most powerful artificial intelligence models and workloads. Revenue in the 2025 fiscal year jumped 114% to $130.5 billion, the company reported in February.
The company’s stock price increased more than ninefold between the end of 2022 and the end of last year. Huang’s roughly 3.5% stake is currently worth about $94 billion.
Huang’s 2025 pay also included $3.5 million in residential security and consultation fees and driver services, the company said in the filing. In the previous year, residential security and consultation fees for Huang totaled $2.2 million.
Google in a recent filing said it paid $8.27 million for CEO Sundar Pichai’s personal security and travel, representing a 22% increase from the year prior.