All right. Welcome back, everybody. I'm Joe Moore from the Morgan Stanley Semiconductor team. Very happy to have with us today the executive team of GlobalFoundries, Tim Breen, CEO, Sam Franklin, CFO. Thank you, guys, for being here. I guess maybe we could just start, you know, you described the company being at an interesting inflection point-
Yeah
on the last earnings call. You know, what did you mean by that? What has you excited about the direction that the business has headed?
Yeah. Thank you, Joe. Thanks for being here. No, it's a super interesting moment to be GlobalFoundries, and I think it's because we see three trends that perhaps we've tracked for some time but now moving to a different pace of momentum. The three that I see, two are demand, and one is on the supply side. On the demand side, clearly the rollout of the data center, we're seeing only acceleration in the requirements, the scale, the deployments globally, but also some of the bottlenecks those data center deployments create, whether that's power or networking, areas that we've been investing in our portfolio for some time and now seeing that pull through in the business and the pull-through for the roadmaps that we have for the future.
Even more excited about the longer-term trend of AI entering the physical world, right? When AI is around us in the cars we ride in, it's no longer driving because they'll drive themselves, the home environment, the workplace, the factory, that physical AI transition, we're starting to see that have real roots and pull through into engagements we have with customers. The third piece of it is how we were born, is doing all of that in a globally secure footprint. That was hard for a lot of our journey because it's not easy to run fabs in different places. Now that's not a nice to have, it's a hard requirement for a lot of these applications. When you put demand and supply trends like that at the same time, it really positions GF in a way that we've never been positioned in our history.
Yeah. Yeah, that makes a lot of sense. Thank you for that. You know, some of the recent M&A that you guys have done and talked about, you've talked about being a full-spectrum RISC-V process provider, things like that.
Yeah.
How do you think about that M&A, and where's the balance between developing IP that your customers do and things like that?
Yeah.
How do you think about those dynamics?
We've tried to ground our M&A strategy very much in our customers' requirements. We've said, "Where can we buy businesses, companies, teams that add differentiation to our technology footprint, that deepen those engagements with those key customers, and actually enhance our global manufacturing base?" One or more of those three pillars. The recent M&A have done exactly that, and you picked on the topic of kind of IP, custom silicon and software. As you know, we acquired MIPS in the middle of last year. We announced early this year the acquisition of Synopsys' ARC business. This is all centered around providing more to our customers than manufacturing alone. We provide, you know, processor IP, a range of cores for different applications.
We give them an alternative in the ecosystem so they have choices, but we do it in a way that they can trust because we're a neutral party, right? We're not a competitor to them, we're not a supplier, to their competitor only, right? We're across the broad spectrum. It allows us to engage with them earlier on their architectures, earlier on how they think about design, and it leads to enhanced foundry business as well as IP, software, and custom engagements as well.
Great. before the IPO, you had a decent-sized custom silicon business, which later on became Avera-.
Mm-hmm
... acquired by Marvell.
Yeah.
Can you contrast that with what's happening now?
For sure.
It doesn't seem like you're doing that. It seems like you're more-
Yeah
... design services element, but how do you think about that dynamic?
No. I mean, it's a great question. I mean, Avera, this goes back now 20 sort of 19 timeframe. That was a business that was doing five-nanometer designs in 2019, right? That roadmap was highly oriented towards applications that GF couldn't add value to at that point, and we said we are not the natural owner of that business. The thesis that says being a differentiated IP provider, especially for processor applications in that edge AI, physical AI kind of domain, plus being able to build custom designs in process nodes that take advantage of those technologies like our FD-SOI platform, FDX, and so on, you've got a great synergy there. MIPS is the better fit for that relative to where we were in the past.
Is that IP designed to grow the foundry business or are there other monetizations that you can do around that?
You can think of it in really three buckets and then a sort of knock-on effect, right? Bucket one, direct IP sales, you know, this business. Both businesses exist. They have direct IP customers today, and that will continue to grow. Both businesses, again, I'm talking about Synopsys as well, have software tools that are used today. Synopsys has over 300 customers in that business that we're buying using tools like ASIP Designer in the case of Synopsys. We have a tool called Atlas Explorer in the case of MIPS. This allows designers to build structures in silicon, in virtual silicon, well before they're actually putting things into the real world. That software business is also there and growing.
Then we have more and more interest in custom engagements, by the way, with existing GlobalFoundries customers, but also new customers who say, "Look, I have a particular use case for my medical application. I don't have my in-house design team. I don't have in-house IP. Can you help me put that together?" We can do that working with them, but also bringing third parties to some of the design activity as well. All of that leads to a different set of monetizations. Of course, a lot of it leads to additional
Yeah
... volumes as well, down the road.
I mean, there was a time when people used GlobalFoundries because they were cheap, right? Then really, even by the time of the IPO, you had started to establish much more of a partnership mentality and people, you know, the geopolitics I'm sure helps, but seems like this is another aspect that kind of brings you closer to the customer, makes you more central, not like a secondary supplier of foundry services.
I think that's fair, and I think it's about do you bring differentiation and do you help earlier in that stage of development so that when they're trying to crack their own product competitiveness, you play a role in that. By the way, it also helps you exploit your process technology differentiation even more. What we learned in that journey is that it's one thing having a different process technology that may be actually superior, but not necessarily the biggest in the industry. Well, actually having the design skills means you can figure out how to use it. Our FD-SOI platform today is dominating the field of high-performance radar, right?
Mm-hmm.
Why? Because we've been working with these customers now for many years to build that capability to how to use that technology the right way. I think this fits with this idea of being highly differentiated.
Yeah. Okay, great. Geopolitics has obviously been front and center. For what you guys have been doing, you know, for a decade now really.
Yeah
T he desire to diversify away from Taiwan specifically, but also the desire for different regions to localize, and you guys have been, you know, a U.S. company, but with fabs everywhere. Can you talk about the importance of geopolitics, the importance
Yeah
... of government subsidies and how that helps you build those relationships out?
No, I mean, it's obviously a trend that we read about every single day. I mean, we live in an increasingly fractured world in many ways. The old order of globalization with no guardrails, I think is an order that I think no one would say is coming back anytime soon. It means that customers in the industry have to navigate risk and find ways to mitigate those risks in their business, and they actually want optionality, right? They don't just want supply security, but they want choices because who knows what happens in the future. Maybe their business grows in one region more than another, and perhaps they wanna be able to localize content. We said, "It's not just enough to build fabs in different locations.
You need to qualify technologies across those fabs so you can choose, you know, I tape out my FDX chip, but I can make it in three fabs or four fabs around the world." You give them that optionality of that for their business security. Of course, going alongside that is you build deep partnerships with governments, and we've had that, of course, in places like Singapore for many years.
Yeah.
Germany has been a big supporter of us, and the EU more broadly. Of course, the U.S. has now accelerated also its support for our industry. That levels the CapEx playing field, meaning when we invest $1 in the U.S., we're bringing more than $0.50 back in terms of government support. That allows us to get scale where previously it was hard to do so.
Thank you. Can you talk about the current economics of the business? We just had the TI CEO downstairs talking about, okay, the China foundries are starting to be full. We're seeing hotspots. You know, we think that this could become a very tight environment for foundries, which would obviously benefit them, but obviously would also benefit GlobalFoundries.
Yeah.
You know, do you see that? I guess part of that is TI moving some of the older nodes to support, you know, substrates for CoWoS or just to support more advanced nodes. That seems like there's actually supply being taken out of your business. Is, is that fair?
Yeah. Look, I think, you know, if you take from a year ago to today, every end market is incrementally tighter, some more than others.
Okay.
For sure, anything that's touching the data center is in high demand.
Yeah
You know, visibility is very strong. Purchase orders are talking about 2027 in many cases, not 2026, so you have different levels of visibility. Every part of the industry has basically seen a tightening. Again, some of them are on the supply side, like you mentioned, TSMC's strategy changing, and some of it, of course, is demand. Then, of course, there's idiosyncratic factors where, for example, let me give a real example for GF. We have a great business in high-performance silicon germanium. It's been around for some time, but now that that's getting pulled through on data center applications, like within a pluggable optical transceiver for a TIA or a driver, suddenly we see excessive demand in that and we're able to invest with confidence to then supply that demand.
Can you talk about silicon photonics in more detail?
Sure
Optical? You know, Lumentum and Coherent were probably the two hardest rooms to get in this week at the conference.
Yeah
B ecause of the deal they struck. you know, very clear that this is a key bottleneck to data center-
Yeah
You guys are very well positioned to help that.
Yeah. It's interesting because a few years ago, it would be hard to talk about photonics with anyone being interested. In a way, this transition has always been underway because.
Yeah
We've been moving more and more data for more and more complex workloads. Obviously, AI accelerates those workloads dramatically. You add to it that in the data center, the density of the data center has changed dramatically, right? You look at the number of GPUs per rack, racks per pod, pods per data center. This is now a very dense environment where a lot of data and power, by the way, is moved around on a daily basis, and you start to hit physical constraints that need to be solved in different ways.
How are you seeing that in the photonics demand in the market today? You're seeing a really strong business in pluggable optical transceivers. If you walk around a data center, it'll be full of pluggables, in every different application, scale across and scale out in particular. What you're also starting to hear about is the growth of co-packaged optics, and I think a lot of this week's announcements were about that.
Yeah.
At some point at that rack scale, there's not enough beachfront to put the optical transceivers in place in a pluggable format. You need to move to something co-package inside that CoWoS on the substrates or on the interposer. We've been working on that for a while. Sometimes I think we're early, but we're right, and it's better to be probably early and right than late or wrong. Those applications in co-packaged optics have taken time to develop. You need to integrate more components. You need to bring silicon process technology, which we have, but also advanced packaging so that you can bond an electrical and a photonic IC. You need to understand micro-optics, partnerships like the one we have with Corning about delivering a detachable fiber connected to that board.
You have to solve a lot of different challenges, all of which we've been working on for some time. Now we see the proof points in that in, okay, pluggable demand today, but also strong demand for the roadmap and future of moving to co-packaged optics. We've said consistently that 2027 would probably be the inflection point of CPO. I think we still believe that's true.
Mm-hmm.
I think what people are maybe getting a bit more incrementally bullish on is just how fast CPO will penetrate, particularly for those scale-up applications. For avoidance of doubt, pluggable is not going anywhere
Yeah
... will remain very important.
Yeah.
The scale-up application is just becoming huge in terms of demand.
I mean, you guys are talking about doubling this year, right, before we even get to 2027.
Exactly right. I mean, you look at the revenue from 2025, that was roughly a doubling-.
Yeah
... from 2024 to a little over $200 million. The expectation for this year is that we've got good line of sight to double again. To Tim's point, very large percent of that, in fact, vast majority of that is from pluggables. The early-stage ramp and the early opportunities and tape outs that we do with customers is to then support the growth from a CPO perspective.
How would you handicap your guys' capabilities versus other foundry competitors?
Yeah.
I know you've done the acquisitions of AMF and InfiniLink. You know, Tower's talked about this as well, other.
Yeah.
Certainly, this is gonna be an obvious opportunity for everyone.
Yeah.
Where do you stand?
I think we think about leadership here in three main categories, right? First of all, how strong is your technology today and your roadmap for the future? Because this has moved beyond just silicon innovation, you have to think about packaging, you have to think about how you put the whole system together. A lot of the innovations we've been investing in are actually allowing us to have a roadmap that can serve the 200G per lane kind of bandwidth today, which is what people talk about generally, moving to 400G per lane probably as fast as anybody, if not faster from an industry sort of development point of view. That enables those 1.6T, you know, the T transistors, the 3.2T transceivers and so on going forward.
That enables the next generation of performance, both in pluggable and co-packaged. The second piece is building an ecosystem and the enablement structure. We have an extremely robust PDK we've been developing for some time. What does it mean? It means customers can design quickly into your process with standard products, standard cells, standard IP that they can use. That's something that others haven't had time to do and others haven't put in place.
Some of the partnerships on test, assembly, detachable fiber connect, we talked about as well, that ecosystem is super important. The last piece of it is manufacturing footprint. Back to where we, you know, our roots in a way, we're doing this in 300 mm manufacturing today in the U.S. When it comes to security and scalability, that's hard to beat, right? It means we can meet the demands of the industry as it grows with CapEx efficient and short time to market, as well.
When you talk about that 100% growth this year, are you guys gonna be supply limited with that? I know there seems like there are other bottlenecks that hold back the growth on you.
Our eternal job is to try and match supply and demand as close as we can.
Okay.
I'd say right now they're pretty closely matched.
Okay.
We're definitely seeing incrementally stronger demand signals. As a result, we are also increasing, in some cases, our investment. What I like about the investment side, again, in the short term, this is adding tools to existing fabs. You're able to get time to market advantages. It's very capital efficient. From a long-term point of view, we're also getting the support back from the government side on that. I'm more confident to increase the investment as the demand signals come in.
What I also like about the demand is it's not one or two customers with one or two ramps, right? It's broader and broader. In fact, the acquisition of AMF brought a whole suite of customers to GF that we didn't have before or didn't have significant scale at before, and that's giving us a much more diversified ramp as well. I feel like we'll be able to match supply and demand quite well. Of course, that's what we think about every day of the week.
Yeah. It seems like investors are starting to get the message on the importance of this. You said a lot of your questions in meetings are-
Yeah
around this opportunity.
Yeah. I think like everything, it's a question of the technology story was always quite clear.
Yeah. Yeah.
You need to see the revenue numbers, and obviously, we've talked about that more, and that, I think, gives people confidence that now, you know, we had set a goal of being $1 billion by 2030. In our last earnings call, we talked about that being run rate by the end of 2028.
Yeah.
I think we have incrementally, significantly more confidence on that revenue trajectory.
When you start to see these scale-up opportunities just emerge from nowhere.
That's right.
Tens of billions of dollars, pretty impressive. Okay, great. On the other parts of your business, consumer-centric, you have still a pretty significant mobile business. There's angst about memory issues in that part of the market, but the biggest customer seems to be okay from what we see so far. Second biggest customer has a memory business. You know, how do you feel about mobile? Do you anticipate there being headwinds over the course of the year?
Sort of bigger picture, mobile is still a significant part of our business, but we've been growing substantially the other parts.
Yeah
Our strategy has been to develop a much more broad base of end demand, and definitely data centers played a role in that. The auto story we can come back to if you want. The auto story has also been a really good multi-year growth story and double-digit growth rates, which has made mobile smaller than it's ever been as a percentage of our business. I think overall, we'll track the overall mobile market. Our portfolio, if you kind of say, where are we most geared, it's more geared to the high-end phone. That's kind of obvious in a way because high-end phones have more content, have upgraded components. Think of it in, you know, RF front-end module for 5G. Think of it display, haptics, audio, power management for the battery life, all of these components.
We haven't seen tactically any significant customer changes of behaviors. Actually, we came off a relatively solid kinda end of year launch cycle and so on for some of those phones and those customers that you alluded to. I'd say overall so far, kinda tentatively good. I think, look, it's worth watching closely what happens on the lower end, and do you start to see incrementally more nervousness on there. Look, we'll track the market overall.
Yeah.
Look, longer term in mobile, what's been working well for us is really focusing on those differentiated applications that are multi-year cycles, not the tactical annual cycles where our content is particularly distinguished. Then of course, getting involved in new form factors. We know we're hearing incremental bullishness on smart glasses and application.
Mm.
That requires some similar ICs, but also some different things like display and so on that, again, we have good technology for.
Yeah. I mean, the only place we've actually seen softness, there's a lot of concerns about memory in smartphone, but it's really China Android, and which is should be pretty minimal from your view.
Relatively small. Yeah.
Yeah. You mentioned auto, which has been a great story really for years now. I mean, you came public with low single-digit percentage, and you've grown it every year a lot. You recently just extended your partnership with Renesas. You know, can you just give us a sense of what's happening
Yeah
... in auto long term. It does seem like that's one of the markets that's most focused on sourcing in the region.
Auto is, in a way, that perfect combination of the three things we always talk about, right. The technologies we bring to bear are particularly suited to auto, and it's not just microcontrollers, it's also battery management, in-cabin sensing, radar, lidar, kind of, you know, a broad spectrum of semiconductors. More than 90% is in areas that we can service. The single-digit nanometer part is very, very small. Very, very good technology fit. We've been able to work deeply with those customers now for multi-years. By the way, those design wins take time. They ramp.
Yeah
S lowly, but then they ramp, and they stay for a very long time.
Mm-hmm.
Actually, the supply crisis of COVID allowed us to also partner with the Tier 1s and the OEMs. We spend time with the whole value chain, and they are instrumental in influencing the sourcing decisions, by the way, partly because of trust and technology, but of course, the geopolitical factors play a big role. Look, auto has been for us a secular, you know, growth story. We've outgrown the market every year as a public company, and we've actually had our best year of automotive design wins last year. Despite everything in terms of growth, we're seeing more momentum come into the market. Tee up the discussion about Renesas. Renesas, you know, great company, broad portfolio. Three areas I think are particularly interesting in their portfolio. Of course, automotive is strong.
They're ramping in data center power, which we talked a little bit briefly about. Then they have a broader sort of edge AI microcontroller-type applications for different non-automotive use cases. All of those, again, feed very well into our technology mix. As a supplier with many customers around the world, they said, "I need a partner who I can work with globally. I want U.S., I want Europe, I want Asia. I want optionality in China with our manufacturing partnership we have, and I actually even would like maybe some optionality in Japan," and we've agreed to do that with them. You've got a situation where it'd be very hard for anyone else to deliver that kind of global sourcing in the technologies their business is focused on.
Yeah, I mean, I was really struck a few years ago by the automotive OEMs striking deals with you guys, where I don't think they knew who you were two years before that. How persistent has that been? I mean, you know, obviously, the shortages are not as much in main memory as they were.
Yeah.
We actually heard from ON Semiconductor yesterday that the OEMs were asking the tier ones to build inventory. Tier ones say no, the OEMs are starting to stockpile inventory.
Yeah.
That there's a buffer. You know, are you seeing that OEM relationship still be important to your business?
On a supply chain side, it's maintained extremely high level of importance, right? We have very regular dialogue on planning. Again, they have a little bit more visibility from their side versus the tier ones. By the way, we spend a lot of time with the tier ones, too. We've been very public about Aumovio, formerly Continental, Bosch, Hyundai and others, Mobis and others that have worked with us. Our breadth in the tier ones is also quite strong. Look, what they're all thinking about is what do they wanna own from an architecture point of view and design over the long haul. They look to the cases of companies like Tesla, who've had a much more kind of silicon-native structure, and many have been working on that.
By the way, that brings us back to topics like processor IP. For example, having access to IP for processor designs, that's again another vector of engagement with the Tier 1s and the OEMs that was perhaps harder for us to do in the past when it was all about manufacturing. Look, I think this is gonna deepen, and those end up becoming multi-company partnerships because people play a different role in bringing the systems together.
That's helpful. Thank you. moving to the financials, your gross margins, have continued to go up. You have a long-term target of 40%. Can you kinda tell us what has to happen to get to that 40% number?
Yeah. Do you want to take that, Sam?
Sure. Look, I think the important metric that we're focusing on now is the relative progression from a gross margin perspective. You look at the fourth quarter and do the comparison to same period the year prior, we delivered revenue that was roughly flat. We delivered margin that was almost 4 points higher. Why is that the case? A couple of fundamental drivers that Tim has alluded to already. One of those is the mix within our business, and there's two layers to the mix within our business.
There's the mix as we think about it from the end markets that we're servicing and the secular drivers within those end markets, and there's the evolving mix as it relates to how the acquisitions we've made over the last year are starting to evolve from both wafer revenue services as well as technology revenue services as well. MIPS is a good example of that. The Synopsys IP acquisition will be another good example of that as well. Really, it's that mix evolution that has been a strong tailwind. By the way, we've shown that gross margin improvement notwithstanding the fact that on a year-over-year basis, the legacy of underutilization payments had actually fallen out of that revenue stack as well. Continued mix shift is key.
You know, you look at fourth quarter combination across comms infrastructure and data center and our automotive business, that's 35% of our revenue, okay? You take that, you do the comparison to smart mobile in the fourth quarter, that was 36% of our revenue. If you rewound the clock to prior to when we went public, as you rightly said earlier, Joe, automotive was in the low single digits. Smart mobile was greater than 50%. Mix shift doesn't happen overnight. It's been a multi-year journey, but it's a multi-year journey with very disciplined investment that's driving incremental margin fall through as well. The second piece of the story is really how we think about the scale opportunities across our business. You know, scale matters in foundry, right?
Particularly given that we're at the highest fixed cost end of the entire semiconductor ecosystem. So we have, again, focused our investments over the course of the last few years to really kinda drive that scale across our Dresden footprint, across our Singapore footprint. The opportunity for us as it relates to scale is now principally in the U.S. It's, it's scaling and remixing our Burlington, Vermont facility, and it's scaling and remixing our Malta facility in upstate New York. Again, we've been really driving towards that for the best part of a year and a half now. You know, Malta was traditionally a FinFET facility.
Mm-hmm.
Well, now we've been transferring technologies in. We have FinFET. We have silicon photonics. We have our FDX technology. We have a 40-nanometer automotive qualified corridor as well. We are driving scale across our footprint, which again, is a tailwind as it relates to the broader margin story as well. The final piece of it is really around productivity. You know, at our core, we're a manufacturing business, and so continuing to focus on productivity is critical.
You know, cash cost per mask layer matters. All the components that go into our manufacturing processes are where we look to drive incremental margin growth as well. What I will say is that all of the strategic decisions you've seen us take over the last year as well are not because we view 40% gross margin as a final destination. We view that as the next stop in the journey as we continue to focus on this evolution of our business as a holistic technology services provider.
Yeah.
We think that creates more opportunity over the long term.
Okay. That's helpful. You talked about a little bit on the earnings, a meaningful increase in capital intensity this year. How should we think about that?
Again, Tim alluded to a little bit of this earlier. We've made a really concerted effort, particularly as it relates to CapEx intensity over the last couple of years, and more importantly, how we think about it for 2026. The first core principle is debottlenecking, making sure to your earlier question that we have the capacity that's needed to meet the demand that our customers are telling us that they need. A couple of great examples of that are everything related to silicon photonics in the pluggable space, our high-performance silicon germanium, which is up in Burlington, Vermont, but also our FDX technologies as well. Our FDX technology is one of the most versatile that we have across the business as it relates to all of the end markets that we service. Debottlenecking that demand, key.
That's really where we see a significant envelope of growth from a CapEx point of view this year, but it's because the demand is there, and it's accretive demand to our long-term margin targets. The second piece is how do we do that, you know, capacity growth and deploy that CapEx in an efficient manner? From a GlobalFoundries point of view, we've got a footprint that allows us to grow into the existing four walls that we have across most of our sites. I mentioned the remixing going on with Malta, opportunity to continue growing within the four walls. The same is true as we remix Burlington. In fact, in Dresden, we have our legacy bump test facility. We're gonna convert that into incremental manufacturing capacity as well.
As we ramp in AMF, the silicon photonics business we acquired last year, again, using the existing four walls. That efficiency really matters. The final piece Tim kind of mentioned earlier is capital efficiency and partnerships with governments across all of the geographies that we operate in, as well as partnerships with customers as well. There's an increasing focus from customers that demand certainty matters in some of these critical technologies that we're putting on. You know, if I take the governments as an example, Tim mentioned earlier, you know, in the U.S., we can expect upwards of $0.55 on the dollar.
You know, I think you can assume a rough rule of thumb that anywhere between $0.30 and $0.55 on the dollar is what we target across all of the geographies that we operate in. I'd say they're really the three core components that we think about from a capital intensity point of view. Now, the last two years, we've been well below our target model. You know, our target model is net CapEx sort of 20% of revenue. We've been operating in the roughly 8%-10%.
Yeah.
Actually it's natural that you see a bit of a float up-
Yeah
... this year, and I indicated on the call that I expect that to be more like 15%-20% this year. For all the reasons I outlined, we feel quite good about making those decisions.
I mean, one of the nice things about the businesses you're in is the relatively low capital intensity compared to the guys competing at Gate-All-Around, and the cash flow that the business throws off. Can you talk about the priorities for free cash flow moving forward?
Absolutely. I mean, look, we've been on a relatively early journey in terms of becoming quite a high generative free cash flow business. Last year, you know, close to $1.2 billion, the year before, over $1 billion, that we wanna make sure that we're maintaining this flywheel of free cash generation. We also have a very clear hierarchy about how we think about what to do with that cash generation. We wanna make sure first and foremost that we're investing in the business in high growth, high margin opportunities. That's investment from both an organic perspective and an inorganic perspective. I mentioned the technology corridors where we're really focused inorganically.
Tim alluded to it earlier, the acquisitions that we've made across the last year as it relates to MIPS and AMF, the broader opportunity that comes through with the Synopsys IP business as well, again, really focused on investing the business for growth in high margin areas. Secondly, we wanna make sure that we have a very robust financial position. Balance sheet's key. We wanna continue making sure that that's strong. Look, we ended the year with roughly $4 billion of cash on the balance sheet. We have another $1 billion of unutilized credit facility as well. We feel quite good about the strength of the balance sheet at this point. Finally, you know, it's how do we look to thoughtfully look to redistribute some of that capital back to shareholders as well?
Look, we're gonna do that in a very orderly manner. As you heard from our last earnings call, we've had authorization from our board to start with a $500 million buyback, and that buyback is format neutral, whether it's privately or through public market buybacks as well. I think it's a good endorsement as it relates to the long-term opportunity and the resilience and the discipline that we have within the business.
Very helpful. Thank you. Let me pause there and see if we have questions from the audience. No? If not, maybe just, we have three minutes left, any final remarks? Can you close out? What, what do you want investors to focus on the most when it comes to GlobalFoundries?
Yeah. I think the way I think about this is, you know, preparation meeting opportunity, right? You know, it doesn't happen overnight that you position a global manufacturing footprint with flexible technology. It doesn't happen overnight that you develop technologies that just have breakthrough performance for connectivity in the data center, for power management in the data center. It doesn't happen overnight that you build relationships in automotive to be able to grow double digits year-on-year for multiple years. We've been working on this for a while. I think what the inflection point is kinda where we started the discussion is you now see this driver across everything in the industry called AI.
Of course, we internalize that mostly as this virtual cloud-based, you know, interface, but, you know, you're hearing at this conference a lot more about agentic, you're hearing about physical. So we're at the beginning of the secular shift of how technology is driven, and that's gonna pull through a huge amount of content in our industry. GF has been preparing for that for some time in terms of position the portfolio as best we can. Of course, you know, things move faster in some areas and slower in others, but we're at a really incredible point where we can now deliver on that model.
As Sam said, we've got the financial firepower to do it. We've got the accretive model where every $1 of revenue comes with significant fall through and higher margins. I feel like we're at the beginning of a really good sort of virtuous cycle for our company, with not just one demand driver. I think the last piece of this is there are lots of ways to play semi, but betting on one thing, I think what's great about our model is it's betting across that whole kind of technology stack along the bottom.
Yeah
The benefits. Yeah.
Great. Well, thank you very much for this conversation.
Thank you very much.
Appreciate it.