Good afternoon, everybody. Welcome to the Goldman Sachs Communacopia + Technology Conference. My name is Jim Schneider. I am the Semiconductor Analyst here at Goldman Sachs. My pleasure to welcome GLOBALFOUNDRIES and CEO Tim Breen to the stage today. Welcome, Tim.
Thank you, Jim. Great to be here. Thank you.
Excellent. I want to start off with a couple of very high-level questions around your business. GLOBALFOUNDRIES kind of stands as a foundry providing specialized CMOS processes. It has manufacturing sites spanning the U.S., Asia, and Europe. At the highest level, tell us a little bit about what kind of capabilities are unique to GLOBALFOUNDRIES, why customers come to you, and why you win.
Yeah. Thanks, Jim. Great to be here. Look, we see that in three broad categories. I think the first thing is that there was once upon a time when in semiconductors, there was leading edge and lagging edge, and that was really defined by the technology transitions that the industry went through. I think it is obvious today that we have moved beyond that paradigm. We have moved beyond it because where semiconductors find themselves in our daily lives, in the data centers that we are relying on, in space, a broad set of use cases. It means that when you think about what we do, you have to focus your strategy against that. We think of these three pillars that we focus on. Number one is our technology portfolio.
We have an incredibly rich, diverse technology portfolio built over now 17 years since we've been a company called GLOBALFOUNDRIES, in areas as diverse as analog and mixed-signal, in power, in ultra-low power CMOS, and beyond. Step number one, have for those diverse applications, a set of technologies at the process level, and increasingly now beyond that process level with advanced packaging, with IP, with software, with custom silicon as well. Pillar number one, a deep focus on those differentiated technologies that accomplish specific workloads. Number two, ultimately, you are a really high-stakes decision for your customers. They do not get to choose you this year and not choose you next year. They bet on you for the long term. You need a track record of trust and delivery, and that takes time to build. We've been doing this for some time now.
I am really confident to say now we are in a place where 10 or more customers have done a decade with us and made millions of wafers and hence billions of chips with us. We have that foundation of trust with our customer base and with our ecosystem. The last part you mentioned, it is in the name, is that global footprint. It is really hard to build. It takes a lot of time. It is actually quite painful to establish not just a set of fabs in different geographies, but ones that work together as one global network that have cross-qualified technology, so a customer can tape out once and manufacture in three continents. That is a huge advantage in a world where supply chains are more fragile than ever and need more resilience than they have ever had before.
Again, when you put those three together, it is clear why customers are coming to us more and more for what we do.
Now, you hosted an investor day back in May, where you laid out some of the long-term growth drivers of the business. I think you called them mega trends of AI data centers, physical AI, and resilient global supply. Maybe unpack some of these and highlight the specific areas where you expect to have the greatest impact on your business over the next few years.
Yeah. When we start in the data center, I think obviously it's the area that everyone in the industry, everyone in technology is very focused on. If you leave aside for a second just the sheer scale of the build-out that's happening, we talk about the $800 billion of hyperscaler CapEx this year, those numbers growing into 2027 and beyond. But leave aside the scale of it and talk about what's happening within that data center today that was different from two years ago or different than even a year ago. It's that data center is increasingly heterogeneous in terms of the compute that's going into that.
While before it was a GPU-centric kind of build-out, now you're talking about GPUs, CPUs, LPUs, NPUs, basically anything with a PU after it, working together in a much more complex compute environment because the AI workloads have changed. They were originally quite narrow in scope, now heavily skewed from training now to inference, and even disaggregated inference workloads as well. So that introduces a new challenge called how do you connect all of that together? In that data center, we very much focus on the optical connectivity piece of it. We'll talk more about that. I'm sure there's a lot of growth in that sector as we transition from copper to optical. But beyond that, in the data center, you're also seeing an increasing criticality of improving power conversion and power efficiency.
Again, data center power being a very good growth driver for a business like ours that specializes in the technologies for intelligent switching, dense power conversion, and so on. Data center, very, very strong driver today where we're seeing very, very good demand growth, where we're also investing CapEx for capacity for the short-term ramps. We think that is probably dwarfed by what the longer-term physical AI transition will be. It's a bit like every transition we've seen in technology. You start with a boom and everyone focuses on the boom, but we forget that there's always an echo that comes later. The reason we think that's the case is that when AI permeates the devices in our world around us, there are so many more use cases that can be deployed that we haven't thought of yet, or we haven't taken full advantage of yet.
We haven't seen that really materially hit the business yet, but of course, we see increasing interest in robotics, but also industrial automation, medical devices, agriculture, consumer devices, a broad spectrum of devices, all of which will need a lot more semiconductor content because operating in the real world, they will need to sense their environment, think with distributed compute, control a real-time system, actuation, motor control, and so on. They will need a ton of communication, largely wireless communication. The second driver, physical AI, very much at the beginning and the early stage, but we think that is a material business growth driver for us. If those two were all that was happening, that would already be pretty overwhelming for us and overwhelming for the industry, but they're also happening at this time where this reshoring trend is now truly accelerating.
For a long time, it was interesting to customers that we had a global footprint, but it was not a competitive differentiator. It wasn't something that said, "Okay, we need to do this with you because of the footprint you have." In the last couple of years, that has dramatically changed to the point that now we see procurement processes where NCNT is the rule, not a nice-to-have. Made in the U.S. is a critical feature of that. It's almost a multiplier effect on the first two, that all of this demand growth is happening at a time when the industry is, in a very committed way, driving that reshoring of capacity into the U.S., but also into other parts of the footprint as well.
Great. I want to dive into those things, but maybe first ask about operational kind of questions. What are one or two key objectives you're driving toward over the next, say, year or so? If you think about investor expectations for the business heading into 2027, if you were to outperform, what would be the key areas of upside you see for the business?
It's interesting how our industry moves through these periods of when you're chasing supply or chasing demand. We are clearly in a chasing supply moment today. For us, what that mostly means is a deep focus on ramps of technologies that we are already producing today, but ramping to higher volumes. We'll be definitely increasing our CapEx. We already are increasing our CapEx this year from last year. We'll be increasing further again next year. But it's all going to come down to how quickly we can get tools installed, qualified, ready to ramp for customers. That will gate or accelerate our growth going into next year. We don't see a demand-based reason that that would be different. We definitely see a supply-based reason that that would be different. That puts us in a very much more executional phase of our business.
We're delivering for customers, working hand-in-hand, finding ways to take risks together to go faster to meet their objectives for their markets. So priority number one, job number one is really just build out that capacity and ramp as quickly as we can in those technologies that we are investing in, and really doing that in a very much partnership mode with our customers. By the way, not just in terms of commitment, but even in terms of financially. They're also co-investing alongside us in some of those ramps as well. So that's priority number one. Priority number two is in that broad set of technologies that we offer, every year we're delivering critical roadmap intercepts, qualifications of new products, new technology launches. We just had our global technology summit here in Silicon Valley last week.
We've never had as rich or diverse a roadmap as we do today in all these different end markets. But those are things that customers are counting on. They're counting on it being ready, first time right. So job number two, very close second priority, is delivering those roadmap intercepts for features and performance that they need to win in their end markets as well.
High execution focus.
Excellent. Clearly, AI data center is one of the bigger drivers of the growth in the overall market. You have a differentiated position in silicon photonics, specifically. Walk us through that competitive differentiation relative to some of your competitors, like Tower, Vanguard, et cetera, and just some of the actions that TSMC may be taking into the market as well.
Yeah. If you back up a little bit, the transition to optical, if we had this conference discussion a year ago, 2 years ago, we would be having an if discussion, not a when discussion.
Yeah.
We are clearly now in a when moment for optical, and it is because AI data center workloads are much, much more data intensive than previous workloads that were ever considered in being. Now we are firmly in that camp of transition, and the transition has kind of two dimensions to it. First of all, a transition from long distance kind of coherent optics that scale across to scale out, and eventually to scale up, and even potentially scale in, all the scales, in the data center in terms of which links are being replaced by optical that were historically copper. But the other transition happening is form factor transition, where today you see the strong ramp of pluggable optical transceivers, but tomorrow you are seeing, and even taping out in our fabs today, near-package optics and co-packaged optic designs that are going into production in 2027 and 2028.
That is because you need to deliver that optical link closer and closer to the XPU, the GPU, the CPU, the switch ASIC, and so on. This is the backdrop of what is happening, and it matters because our differentiation is not just about capacity today. It is very much about a roadmap that can deliver the performance that those transitions need over time. You have to have a core silicon photonics platform, which we have been building for more than a decade, that can do high speed modulation. We are now talking about 100 gig per lane becoming 200 gig per lane, 200 becoming 400, going beyond 400 gig per lane with new materials, new modulators, and so on. So a core photonics platform that can accommodate the acceleration of bandwidth. But you also need to think about how that form factor is delivered.
That is where advanced packaging comes to play. As these solutions are delivered closer to the chip, hybrid bonding, ability to attach a fiber to the chip, these are all difficult and new techniques that were not in the industry before. Again, part of our roadmap of the innovation that we have been driving as well. So you need that technology platform. You need the capabilities to work with a diverse set of customers. We have more than 40 customers in photonics today, and that number keeps growing as players really invest in their optical roadmap. By the way, everyone who was touting copper two years ago has either launched an organic or inorganic effort to get into optical.
Suddenly everyone is doing optical, but that means you have to support them in these new ramps, these new capabilities that they are in, with not just your team, but your models, your PDKs, and so on. So second piece of that story. But the third piece, maybe the most, in a way, difficult to replicate is, this is a fast growth market. People are not betting on you to sell a few wafers today. They are looking to how do they scale for the next multiple years. We are ramping our photonics capability in existing scaled 300 millimeter fabs. These are big fabs. These are fabs that do today hundreds of thousands of wafers of effectively leading edge capabilities with lithography, like DUV and so on, that are ready to scale for higher performing applications in the future without building new fab space.
We have talked about being able to 10x our photonic capacity within our existing four-wall infrastructure in the U.S. and in Singapore to really meet the needs of that market going through that high ramp period as well. You put those three things together, it is fairly clear why we are having really good engagement with customers in photonics today.
Mm-hmm. To that point, you laid out growth targets of getting to a billion-dollar growth run rate in silicon photonics in 2028, $2 billion by 2030. How do you see that trajectory in the very short term? What would we have to see in either near-package optics or co-packaged optics for you to significantly blow past those targets?
Yeah. I think the industry adoption needed to reach those targets has already happened. So I think we now have very limited adoption risk baked into that. Now we are in the mode of, again, chasing supply in the near term. How quickly can I qualify tools? Can I invest and ramp that capacity within my existing footprint? All indicators right now from a demand point of view are flashing kind of bright green relative to those targets. It is a question of how quickly I can build on that, bring that supply on.
Obviously, I am going to do that in an intelligent way, understanding that when you lead with capacity, you have got to balance it from a long-term profitability point of view as well. But right now, we see much more demand than we can supply out of our current install base, so we will definitely be accelerating that.
That is still primarily today, that path to that first milestone. Pluggables gets you pretty much all the way there. We are already seeing the NPO rollout picking up steam. By the way, it is many of the same players who are in pluggables today rolling out their NPO solution. So I think that transition is now very much inevitable. If you saw really broad adoption of co-packaged optics that latter part of the period, you could blow past those targets materially because co-package is the area which is critical for that scale-up transition. Once you are moving into that, you are replacing 10x the links of scale-out with those solutions, so you are not going to see a linear growth story. You are going to see a much faster growth story.
Yeah
On top.
Yeah. Another key thing in the data center is high voltage power, specifically for the 800-volt transition. We are expecting it to happen sort of maybe by the middle or the end of 2027. Can you lay out for us your exposure in those areas, specifically for gallium nitride and BCDMOS?
Yeah. As you said, we are seeing a paradigm shift in how power is converted, what it is converted from to. As you said, next year's data centers will be having 800 volt at the data center wall that needs to get delivered to 0.8 volts, let's say, at the chip, with as few conversion stages as possible in a very dense form factor, right? The rack is denser than it ever has been. The amount of current that is used by all of these processes is very, very high. You need technologies like BCD for intelligent switching. You need to do dense power conversion with GaN. The same reason your GaN power brick for your laptop is much smaller than your historical power brick is the same reason that the data center relies on GaN for that. We are shipping GaN products to the data center today.
One of our partners, Navitas, talked about that last week. That ramp is already underway today and BCD is the same story. Our latest BCD technology, 55 nanometer, which is not from a digital point of view very complex, but from a power point of view is kind of really very advanced. It is already being used in those new conversion stages that are going into production as of now. That ramp is starting. We have yet to see the real pull-through for the business, but we will see that going into 2027 and even more into 2028, which is when we are also putting some capacity on for that technology. The latest innovation in the data center is also the switch from lateral power delivery to vertical power delivery.
There's not enough space in the rack, and you need to find ways to deliver power vertically to the chip. We've been making investments in this area with process technology, integrated passives, but most recently with the acqui-hire of a small team focused on designing those voltage regulators with customers. Because again, when you make a rapid technology transition, it's not just about having a standard offering and use it if you want to use it. Work as partners with your customers, be they a traditional power semiconductor player or a hyperscaler or anyone in between to really help them navigate that transition, and that's exactly what we're doing.
Yeah. Very fair. Even as you're rushing into these markets we just talked about, you still have a significant amount of your business today tied to the smartphone market. I think a lot of people saw memory pricing driving down potential demand destruction, but I think it's maybe played out in a little bit different way than some people expected. Some pull-ins happened in terms of builds, rather than driving sort of immediate downdraft. I guess, how do you think these dynamics now with the benefit of hindsight are going to play out in your business? Talk about what you saw in the first half, and then how you expect that to kind of materialize in the second half.
We've been very deliberate about our approach to mobile, and mobile has taken this industry quite far, and it's been an important driver of how many companies got to where they got to, right? TSMC, by the way, included, right? We were more than 50% mobile going back a couple of years. That's down to the mid-30s today. We've laid out a long-term model that takes it to the mid-20s, and we think that over time, as a percentage of revenue, it decreases. In absolute terms, it remains relatively flat.
Or let's say to achieve our plan, we do not rely on it growing to achieve our medium-term plan. That's very deliberate because again, we want to see the growth coming from the other areas where we're driving the diversification even harder. But the humble cell phone still has a role to play. It, by the way, creates also a platform for technology innovation. The BCD technology we're excited about for the data center, it was born in the mobile phone, right? If you can deliver it in that form factor, you can deliver it in other form factors, too. Look, I think tactically, when we started the year, there was a view that it would be a tough year for mobile. It is indeed a tough year. It's not as tough at the higher end, right? I think it's very tough on the low end.
More of our exposure is to the higher-end handsets. We will see what announcements, including this week's announcements from the Cupertino company, what they yield. Do they drive appetite for a refresh cycle? What does pricing really do to demand? I would say it is holding up better than perhaps some people thought because, again, there is still just a natural replenishment rate. I think the other dynamic that we are seeing is mobile companies were the first to the queue in COVID. They understood that by getting early, they would not be the ones shorted in supply. Now they are worried about being late when the data center is the one pushing all the demand. You are seeing actually more visibility where they are actually still saying, "I need my supply for 2027.
I need my supply for 2028," because we are still going to sell plus or minus a large number of units of mobile, even if it is down low double- digits or so on. It is still a material amount of content that needs to be secured.
Yeah. Makes sense. Finally, automotive. That has been a very significant growth driver for the company since the time of your IPO. I think you are running over $1.5 billion in that business today. Can you maybe speak to any incremental customer wins you have had over the past year and the potential for you to maybe outstrip the double-digit growth category you talked about investor day?
Auto has been a great story for us. We were five years ago, 2%. It is now in the 20s. That will continue to tick up as it continues to grow. Auto is a predictable business, meaning, you can predict there is a cycle between the design win, the tape out, and the ramp, and it takes longer than other markets, but it lasts a lot longer as well. So from a fixed asset perspective, it is a great business to have in your portfolio. We have one of the highest shares of auto of any sizable foundry. Others may have different numbers, but ultimately, ours is one of the most significant. It is because the technology fit and the footprint fit is really good for auto.
All the portfolio of what you need for microcontrollers, zonal controllers, battery management systems, in-cabin sensing, high-performance radar, all of these kind of applications that increasingly you wouldn't buy a car without. They're no longer nice-to-haves. They're very much must-haves. They fit really well within our technology base. Automotive has been really vocal about supply security, so if you look for who have been most out there with NCNT policies or U.S. for U.S. sourcing, and even gone as far as securing that capacity themselves, as GM did with us and others have done as well. You're seeing automotive really leaning into that story as well. That's contributed to that double-digit growth story that we've seen that will continue this year, next year, and beyond. In our plan that we laid out early this year, we see that growth rate continuing.
I would say the upside from that also is predictable, and all this is happening with content growth rather than growth of unit sales. The predictability is one of its strengths. Where we could see upside is where the automotive technologies are deployed in other applications. Right now, we start to see microcontrollers getting a pull-through from industrial, maybe the very early sign of robotics starting to pull through too, because all the performance characteristics operating in difficult environments, high temperature, vibration, high quality, all of that is a great credibility builder for those other applications going forward. I think auto will be in a way, a bit the springboard for some of those other growth drivers going forward.
Great. Tim, over the past year or so, you've made some unusual acquisitions of processor IP, specifically related to MIPS and RISC-V, plus some assets from Synopsys. I think that moves caught people by surprise to some extent. Maybe help us understand how those deals fit together to get to this billion-dollar revenue run rate in 2030 you outlined across IP, software, and custom silicon.
Just to back up a second on the total acquisition strategy, we've done about six acquisitions in the last two years, and we viewed all of them through the lens of bringing something differentiated to customers. The test for me was when I send out an email to my customer CEOs, my partners, and I say, "We've done this," are they going to respond with a shrug? Are they going to respond with a, "Let's talk"? I would say in our IP investments in particular, it's been very strongly let's talk. The reason is that they see this as an extremely important part of their portfolio. They're also dependent on one dominant provider in that space. Sounds familiar from our foundry experience, where they're saying, "I need alternatives in my business." They're excited about RISC-V.
I think the story of RISC-V being a little bit emerging technology and being a bit of a hobbyist technology, that was 5 years ago. Today, it is broadly adopted. You see that also in the acquisitions that people like Meta, Qualcomm, others have done, all RISC-V technologies and so on. RISC-V has also come of age at the same time as we have done these deals. Customer feedback is, "This is great. You are filling something that I do not have in my portfolio." For me, what is great about it is it is bringing in accretive revenue, very good margins, very good growth, but it is doing in a way that is synergetic with my customer conversations already. I am able to engage with customers when they are thinking about the next generation architecture for their zonal controller or the next generation radar, whatever they want to build.
We are able to bring to it tools that they otherwise would not have access to. Software tools for simulation, processor IP for different workloads. We can shorten their time to market, but we also get an insight on what they are trying to achieve, and that obviously puts us in pole position to be the manufacturing partner of choice as well. I know it is very unusual for a foundry to be also being an IP supplier, but I would say today we are actually probably the second-largest processor IP supplier after the incumbent, if you will, because of the demand that we are seeing, and that is going to grow going forward. The last piece of it that is really interesting for us is when you build very specialized process technology, you want to get feedback loops quickly on how you can improve.
Obviously, that normally comes from your customers. You do a design, you get feedback, you improve. When you have something like that internally, you are getting that feedback loop internally. You are eating your own cooking if you want. You are getting much tighter loops on your own process technology, and you are improving it much more rapidly than you otherwise would, which means it is even better served when you go to the next conversation with the next customer to say, "If you use this IP and this process of technology, here is what you can do in terms of device performance from that." I would say off to a very good start.
We have talked about between $100 million and $120 million of revenue this year. That is growing very fast and we are very confident for that end of decade billion-dollar exit run rate on the business just given the pull we are seeing from the industry.
How do you think about as you bring those pieces of IP together, how the business model matures, how your familiarity with running that business actually matures? Maybe give us any kind of sense you can about whether the ultimate objective is to bring more customers into your foundry business through those relationships or to actually really just ramp the scale and size of the IP business standalone.
I think it's going to be a bit of both. When we acquired Synopsys' ARC business, it came with 300 customers. You've got to believe that in the last few months since we closed that deal, we've been engaging with those customers in a whole different way to say, "What don't you have that we're not doing together today on the manufacturing side?" Because they're all building something. What also don't you have in terms of custom requirements, custom IP that you need as well. I think we have a really fertile ground to grow, I guess within that existing customer base. We also have a way to be a much more strategic partner to some customers for whom before they might have seen us in a narrow vertical of a manufacturing solution.
Now you've got a broader set of conversations to have with the business unit leaders who are themselves going out to work and conquer the markets. Look, I think that synergy is really strong, and I think it's playing out probably better than expected. We knew it would be accretive. We just didn't understand quite the pull the industry would have at this time for it.
Mm-hmm. Can you maybe just say something about what the most natural base of customers is for you in that business, and then any design wins you've actually gotten so far?
Yeah. We continue to have a pretty broad base. We've been public about a few of the more recent wins. We've seen wins in areas like defense. By the way, defense obviously also values that footprint very strategically as well, but often lacks the capabilities to build their own designs, but they would like to do more of that. So we had an announcement with Lockheed Martin about that, which is a good example of. You'll see more of those where a defense player wants to differentiate in silicon but needs some of the building blocks, like the IP, to make that happen. So defense has been a good area. In automotive, we've been very public about partnerships. We feel like Infineon, existing strong GF customers, but going deeper with us through these things.
You'll see more announcements in the months to come, but it's actually pretty broad, and it's a combination of who you'd imagine is the traditional GF fabless customers, or let's say IDMs who are increasingly fabless in their portfolio, but then a really broad set of Tier 1s, OEMs, and even some hyperscalers, by the way, both for edge-type solutions that they're building. But even there are some applications in the data center where they have a data processing unit, a co-processor that they're using that IP for as well. So it's actually been really great at expanding the quality of discussions and, to a certain degree, expanding the customer base that we work with.
I want to briefly touch on quantum because I think you announced another U.S. government award this morning, if I'm not mistaken. Maybe talk about, just for a second, on your quantum strategy and how some of these recent awards are playing into that and when that starts to become a real business.
Yeah. So we've been doing quantum in various shapes and forms for maybe 7, 8 years now. It starts with a single customer engagement, and you build around it. But clearly, there has been an industry-wide, let's say, uptick of momentum in the last 12, 18 months. The reason is that you have all these quantum modalities that are being proven at lab scale, and all the companies are facing some version of the same problem called, "I can't build a system with 100 qubits, 1,000 qubits. I need 100,000 qubits.
I need 1 million qubits to build a scalable, fault-tolerant quantum computer." The bottleneck is not quantum science, it's high-volume manufacturing, and it relies on a lot of the stuff that we do very well when it comes to integrating novel materials, advanced packaging, high-speed interconnect, by the way, many of them using photonics or some kind of optical technology for high-speed interconnect. Then one thing that cuts across nearly every modality, which is that I have to be able to read out those qubits at very low temperature. So we have something we call cryo-CMOS, which is basically conventional FDSOI CMOS we use for many applications, but characterized at 4 degrees Kelvin, so it can read out those quantum signals, those qubits, at a different environment that many, many quantum companies are leveraging.
We started to see that out of this, we had the foundation for a platform that we could take to a broader set of customers. In parallel with this, the U.S. government strategically said, "Look, we need to be leaders in quantum. Quantum is relevant not just for economic opportunity, but for national security. How can we partner with the industry in a much more aggressive way to go faster?" The conversation said, "Look, these are the things you're planning to do over time. What would it take to do it faster?
What would it take to do those in 2 years instead of over 5, 6 years?" We struck a partnership that accelerates our investment in infrastructure, tooling, and so on to do some of these more complex, exotic processes, building some of that enablement that we talked about, the PDKs and so on, for many customers to use, and really allows us to go faster in a journey that we're kind of already on. I'll emphasize that that journey is not orthogonal to the rest of GF, because a lot of the roadmap requirements are beneficial to the rest of the company. What the next generation of photonic modulators will require in terms of materials, we're already using at the quantum stage. Thin-film lithium niobate, barium titanate, all these exotic materials with long names, they're being proven for quantum applications.
They will be needed for the next generation of photonics. So there's a ton of roadmap synergies in the portfolio. So today we announced that we completed the deal that we announced earlier in the year with the government. So we're very happy to have them on board as a partner driving this forward. It's going to be a continuation of this strategy that says invest in the technologies where you can have a true leadership position. I'm not the best player to do single-digit nanometer or buy the next High-NA EUV tool, but I am the best player at integrating novel materials, advanced packaging, and a very different application that otherwise would be very hard to do.
Yeah. Final question in the last minute or 2 we have left. If we put everything into the broader financial picture, you talked about diversifying the business along the lines we've just described, getting to 10%-12% long-term growth by 2028 and beyond. What are the drivers that are driving the most confidence in that view, and are there any risks that you see?
Yeah, I think it is a model we laid out, and we said, "Let's build a plan where diversification is a feature, not a bug." It is very deliberate. There are plenty of companies in semi experiencing very fast growth rates, but if you look at it is relatively narrow. It is a product category. It is an infrastructure transition. We said, "Look, we are going to build a plan that is based on growing in multiple areas," and even some areas, less of a growth plan, more of an upside plan should the upside come to bear. We are quite happy with that growth. Obviously, that meant laying out targets for things like communication infrastructure and data center of 30% or in the 30s. We are doing 60 in Q2. Obviously, in some areas, we are well ahead of those numbers.
In other areas, we are kind of tracking in line with auto, for example, or in IoT, we are actually tracking slightly ahead as well for year to date relative to long-term plan targets. I would say because of the megatrends we started talking about, I do not see a demand constraint to meeting and exceeding that plan. How do we navigate? We have to obviously navigate the investment cycles we go through. We have to partner closely with customers. You are only as good as your last delivery. You earn reputation every day by delivering. Again, I think for the next couple of years, we will be more in a supply-constrained than a demand-constrained environment. It will be more about that rate and pace of investment that we want to take on. I think that the advantage in this cycle versus others, two things that matter.
One is customer skin in the game. Customers are deeply. We do not have to ask. They say, "I want to be with you in this. I want to support you, go faster. I am betting on you. You need to succeed. How can I help?" When that end demand is driven by people like the hyperscalers, of course, they are willing to put capital to work to drive that story. The other thing that is happening is those government partnerships play a critical role. When you are driving a build-out, having partners who are literally working with you every day on a bunch of programs and have put in place tools to allow you to accelerate CapEx at significant recovery rates that were not there in the past also allows you to go a bit faster.
I would say, look, next couple of years, barring any changes to the environment that we do not see as of today, supply constrained, not demand constrained. Over the long haul, the diversification of the platforms gives me a lot of confidence in the broader growth over that plan period. It may even make those numbers look a bit conservative.
Excellent. Let's hope that's the case, and thanks very much, Tim, for joining us today. We really appreciate it. Unfortunately, we're out of time.
Thank you.