GlobalFoundries Inc.’s shares closed 16% higher today after the chipmaker posted fourth-quarter results that topped the consensus estimate.

The company’s forecast also surpassed expectations. Another likely contributor to its share price gains is that it announced a $500 million share buyback program in conjunction with the results.

Malta, New York-based GlobalFoundries makes chips using legacy manufacturing processes. Its silicon is mainly used for tasks that don’t require significant processing power. GlobalFoundries chips manage the flow of electricity in connected devices, help routers process Wi-Fi signals and power infotainment systems. The company also makes certain other products such as flash modules.

GlobalFoundries generated $1.83 billion in sales during the last three months of 2025. That’s $3 million higher than the company’s year-ago revenue and the consensus analyst estimate. GlobalFoundries’ non-wafer segment, which includes revenue from offerings such as chip design licenses, accounted for about 12% of its sales. 

The company’s profitability growth significantly outpaced its limited top line gains. GlobalFoundries generated an adjusted net income of $310 million, which represents a more than 20% increase from 2024. That translated into higher-than-expected adjusted earnings of 55 cents per share.

The company’s earnings surprise was driven partly by increased demand for high-margin products. GlobalFoundries says the auto, communications, infrastructure and data center segments together accounted for a third of its sales, 5% more than a year earlier. The revenue share of mobile chips declined 13% in the same time frame.

The shift in demand patterns also boosted GlobalFoundries’ full-year results. The company says that it secured 50% more design wins, or potential chip contracts, from auto sector players in 2025 than during the prior year. Demand for silicon photonics, meanwhile, doubled to over $200 million.

GlobalFoundries expects its silicon photonics segment to increase by a similar percentage in 2026. The product category encompasses lidar devices, certain other sensors and fiber-optic network components. Additionally, some startups are using miniature photonic modules to link together data center chips.

In November, GlobalFoundries acquired Singaporean fab operator Advanced Micro Foundry Pte Lte to expand its photonics business. The company specialized in making optical components for use cases such as data center networking. GlobalFoundries plans to upgrade Advanced Micro Devices’ fabs’ from 200-millimeter wafers to more advanced 300-millimeter units.

The company also announced other growth investments in the fourth quarter. It detailed a €1.1 billion plan to expand the manufacturing capacity of its fab in Dresden, Germany to over 1 million wafers per month. Additionally, it teamed up with Navitas Semiconductor Inc. to make gallium nitride chips.

At the midpoint of its guidance, GlobalFoundries expects to generate adjusted earnings of 35 ​cents per share in the current quarter on sales of $1.63 billion. Analysts predicted 34 cents and $1.61 billion.

Image: GlobalFoundries