GFS Gains From Expanding Partner base: Will it Boost Growth Prospects?
GlobalFoundries Inc. GFS is strengthening its growth prospects by expanding collaborations across several emerging semiconductor applications. It is deepening partnerships with chip designers, technology developers and government agencies to combine its manufacturing capabilities with complementary technologies. These collaborations are broadening in several domains, including AI, optical networking, power management, automotive, edge computing and quantum technologies.
Recently, the company inked a long-term manufacturing agreement with Monolithic Power Systems. Under the agreement, Monolithic will deploy its proprietary process technology at GF’s advanced 300mm facility in Singapore. The products are expected to address automotive architectures, industrial robotics and automation, as well as smart power stages for AI and cloud infrastructure.
GF is also building momentum in optical networking. During the second quarter, its communications infrastructure and data-center end market generated more than 60% year-over-year growth, driven by demand for optical networking across its silicon photonics and silicon germanium platforms. In addition to these, GFS is simultaneously venturing into the quantum semiconductor market. In September, the company finalized a definitive agreement with the U.S. Department of Commerce’s CHIPS Research and Development Office for up to $375 million in R&D funding over five years.
Recently, the company has also announced a strategic collaboration with RAAAM Memory Technologies. RAAAM has developed a new type of memory called Gain-Cell RAM, while GF has the manufacturing technology to put that memory into chips using its FDX platform. The company claimed the new memory can take up 40% less space on a chip and use up to 60% less power than traditional SRAM. This can be a game changer for AI, automotive and IoT devices, where chips increasingly have to process large amounts of data and have to be compact and power efficient.
Such strategic partnerships with major tech companies are propelling innovation. However, the financial impact of these collaborations depends on successful commercialization of these technologies, customer adoption and production ramps.
How Are Competitors Faring?
GlobalFoundries operates in a highly competitive foundry industry. It faces competition from industry giants, such as United Microelectronics UMC and Taiwan Semiconductor TSM. UMC offers technologies that target applications spanning connectivity, automotive, industrial and edge computing. In July 2026, it announced a phased expansion of its Singapore and Taiwan manufacturing footprint to address rising customer demand. The company plans to expand cleanroom capacity in Singapore, including silicon-photonics capacity, while preparing a new fab building in Tainan to support future technologies.
TSMC is a much larger and more technologically broad competitor. TSMC's advantage is its ability to offer customers an increasingly integrated manufacturing ecosystem. Recently, TSMC and ASML announced a collaborative initiative to develop large-format photomasks for High-NA EUV lithography.
GFS’ Price Performance, Valuation and Estimates
GFS has declined 33.6% over the past year against the industry’s growth of 24.4%.
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Going by the price/earnings ratio, the company's shares currently trade at 17.65 forward earnings, higher than 12.79 of the industry average.
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GFS’ earnings estimates for 2026 have improved over the past 60 days.
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GlobalFoundries currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
