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GlobalFoundries projects profit above estimates in positive sign for chip market

A screen displays the company logo for semiconductor and chipmaker GlobalFoundries Inc. during the company's IPO at the Nasdaq MarketSite in Times Square in New York City, U.S., October 28, 2021. REUTERS/Brendan McDermid/File Photo
A screen displays the company logo for semiconductor and chipmaker GlobalFoundries Inc. during the company's IPO at the Nasdaq MarketSite in Times Square in New York City, U.S., October 28, 2021. REUTERS/Brendan McDermid/File Photo

GlobalFoundries (GFS.O.), a contract chipmaker, predicted fourth-quarter profit beyond analysts’ projections on Tuesday, offering the most recent indication that the semiconductor industry’s supply glut was lessening.

Premarket trading saw a 4.5% increase in the company’s shares as the July-September quarter results also exceeded forecasts. This prediction has backed up previous predictions that the industry’s decline may have peaked. This is because buyers, including electronics manufacturers, are restocking after getting rid of a lot of extra inventory during the epidemic.

A rebound in the personal computer industry, which is a significant source of income for semiconductor manufacturers, appears to be underway, according to statements made by Advanced Micro Devices (AMD.O.) and Intel (INTC.O.).

“Although the global economic and geopolitical landscape remains uncertain, we are collaborating closely with our customers to support their efforts to reduce inventory levels,” Thomas Caulfield, our CEO, said in a statement.

Based on LSEG data, GlobalFoundries stated that it anticipates adjusted earnings per share for the three months ending in December to be between 53 and 64 cents, which is higher than the projected amount of 52 cents.

The U.S. Department of Defense and mobile phone chip maker Qualcomm (QCOM.O) are among the company’s clients. Its net sales for the third quarter dropped 11% to $1.85 billion, but they were still aligned with projections. Fifty-five cents in adjusted profits per share surpassed 49 cents in forecasts.

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