GlobalFoundries Inc. Ordinary Shares Investor update

Please go ahead, sir. Thank you, and welcome to our investor webinar entitled GlobalFoundries Advancing Semiconductor Leadership in America.

On the call with me today are Tim Breen, CEO, and Sam Franklin, CFO. The press release we issued today is available on our investor relations website at investors.gf.com. A replay of this webcast and the accompanying presentation will be posted to that same site shortly after today's session. Before we begin, I will remind you that certain statements on today's call may be deemed to be forward-looking statements, which can be identified by terms such as believe, expect, intend, anticipate, and may, or by the use of the future tense, and that you should not place undue reliance on them. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today.

For more information about the factors that may cause actual results to differ materially from our forward-looking statements, please refer to the press release we issued this morning. You should also refer to the risks and uncertainties described in our SEC filings, including in the sections under the caption Risk Factors in our annual report on Form 20-F, and in any current reports on Form 6-K furnished with the SEC. Note that we will present non-IFRS financial measures during today's call. With that, I will now turn the call over to Tim.

Thank you, Eric, and welcome everyone to what we believe is one of the most consequential announcements in the history of our company. Earlier today, we announced that GF has been selected as the technology provider and operator for two new 300-millimeter fabs at our Malta, New York campus under an investment of up to $21 billion U.S. provided by Japan under the US-Japan trade agreement. Together with our government partners, we developed a truly innovative framework. Japan will fund the investment as part of the US-Japan agreements on strategic investments, while GF provides the differentiated technology, manages the construction, and operates the fabs once they are complete. This is a first-of-its-kind framework that advances semiconductor leadership in America and accelerates GF's trajectory. Today, we will discuss how this announcement aligns with and enhances our long-term strategy. We will cover six points.

First, as a backdrop, the significant accelerating and durable demand for GF's differentiated technologies. Second, the strategic imperatives that brought the U.S. and Japan together in support of this project. Third, GF's proven track record of execution and world-class manufacturing expertise. Fourth, our modular expansion plan and timeline in Malta, N.Y. Fifth, the structure of the financial model and its accretion to our long-term outlook. Lastly, the breadth of support and stakeholder endorsement. The semiconductor industry is entering one of the most exciting eras we have ever seen, driven by the rapid scaling of AI data centers and the proliferation of AI into the physical world. These megatrends are creating strong, sustained demand for a broad set of semiconductors that enable connectivity, power efficiency, sensing, communication, and the intelligent edge.

These are precisely the areas where GF is differentiated and where we are best positioned to create value for customers. These megatrends are propelling incredible long-term demand across GF's durable growth markets. The result is what you see on the right-hand side of this slide, an explosion of applications requiring much more semiconductor content. Autonomous vehicles, intelligent factories, cloud infrastructure, next-generation communications networks, smart consumer devices, intelligent drones, and robotics all require specialized semiconductor solutions. We believe this strongly favors the differentiated technology portfolio we've built over many years. For these reasons, the long-term demand outlook for GF technologies has never been greater. It's not only about the technologies that are needed, it's where they are needed. Customers require substantial semiconductor supply in the U.S., where domestic capacity for these critical technologies remains limited.

GF is one of the only at-scale foundries with meaningful capacity and expansion capability on American soil. This brings me to why the U.S. and Japan came together on an initiative of this scale, because the strategic imperatives on all sides are highly complementary. For the U.S., the initiative reduces reliance on geographically concentrated overseas semiconductor supply and significantly expands domestic production of the chips that American industry, critical infrastructure, and national defense depend upon. We expect these new fabs to increase total U.S. wafer capacity by approximately 10%, making Malta, N.Y. one of the largest semiconductor clusters in the entire country. In doing so, this initiative is expected to create approximately 27,000 construction and ecosystem jobs, as well as more than 1,000 high-skilled manufacturing jobs in New York's capital region.

For Japan, this initiative reduces geographic concentration risk and trade exposure for Japanese companies, provides Japanese customers with access to trusted U.S.-based capacity for the foundational technologies their products depend upon, and creates a meaningful opportunity for Japanese suppliers to participate in the build-out of both fabs. Ultimately, this is a clear win-win for the U.S. and Japan, two countries with incredible depth and complementary capabilities in the semiconductor industry. Both sets of national objectives are served by the same project on a campus that is already operating, already permitted, and already staffed by a workforce that has been operating in Upstate New York for more than 15 years. GF was selected as the partner for this initiative because fabs of this scale require differentiated technologies, customer trust, operational excellence, and a proven ability to execute large and complex construction programs on schedule.

Very few companies in our industry can credibly bring all of those things to a project of this magnitude. GF brings the world-class technology, workforce, and manufacturing expertise, as well as a deep track record in delivering trusted solutions for the most critical applications. This is not just our claim. We have demonstrated a proven track record in strong execution. The first is Malta itself, where we took a greenfield site in Upstate N.Y. from bare ground to high volume, 300-millimeter manufacturing, establishing the infrastructure and large scale production capability in a timely manner.

Our Malta fab became one of the largest private-public partnerships and manufacturing projects in New York State's history, and an incredible story of a company and community working together with the deep support of community, town, state, and federal leaders to create lasting economic impact, high quality jobs, and transforming the prosperity of the region. This site today serves as GF's global headquarters, as well as the hub for some of GF's most innovative new technology breakthroughs, serving a broad and demanding set of customers for more than 15 years. in 2023, we delivered a highly efficient brownfield expansion in our Singapore campus, demonstrating our ability to expand alongside a fab that was already running at volume. Not only did we complete it ahead of plan and on budget, we did so while navigating supply chain disruption of the COVID period.

Our track record speaks for itself, and we were selected by our government partners for these reasons. We are confident we will deliver. Let's now discuss our build-out plan in Malta, New York. The program is modular by design and comes in two phases, both of which will be constructed on land adjacent to our existing Fab 8. Note that all of the wafer figures mentioned in this presentation refer to 300-millimeter equivalents. Each phase is expected to add approximately 900,000 wafers of annual capacity when fully operational. The build-out will be funded by up to $21 billion across the two phases under the US-Japan trade agreement. The first phase is shovel-ready with key permitting complete, environmental approvals received, and core infrastructure already in place. We have lined up our key suppliers and early enablement work on the site is already underway.

The second fab will proceed after a go/no-go decision between the stakeholders before the end of 2028. Beyond the readiness of the site itself, Malta brings clear economies of scale, existing established infrastructure, an experienced and broad talent base, strong support from New York State and from Saratoga County, and status as a U.S. Department of Defense trusted foundry. All of these aspects allow this program to move faster and ramp more efficiently than comparable alternatives. The technology scope for these fabs includes our highly differentiated and sought after FDX, BCD, and UX platforms. Each of these technologies serves multiple secular growth markets where long-term demand is substantial and where domestic supply is limited. For example, FDX supports edge AI and physical AI compute across automotive and industrial applications, as well as a growing set of data center use cases.

BCD is in very high demand for power management, with particular growth for powering tomorrow's AI data centers, while UX serves the broad industrial and connected infrastructure base that underpins the wider economy. We also expect to add additional technologies to the fab build-out over time based on market conditions and the requirements of our customers. This initiative does not displace or replace what GF is doing on its own. In fact, it is wholly additive. This accretive program runs in parallel to our growth plans and accelerates us towards reaching our strategic goals. Let us now talk about the expected timeline for construction and operations. The first phase begins with construction and infrastructure, moves into initial tooling as the clean room becomes ready for equipment, and then enters a sustained period of continued capacity ramp.