GlobalFoundries Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Global Foundries Review of fourth quarter 2021 and four-year results. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the questions on this session, you will need to press star then one on your telephone. If you require any further assistance, please press star then zero. I would now like to turn the conference over to your speaker for today, Suki Nagesh, Vice President of Corporate Development and Investor Relations. You may begin.

Suki Nagesh, Vice President of Corporate Development and Investor Relations. Thank you, operator. Good afternoon, everyone, and welcome to GlobalFoundry's fourth quarter and full year 2021 earnings call. On the call with me today are Tom Caulfield, CEO, and Dave Reeder, CFO. A short while ago, we released GF's fourth quarter and full year 2021 financial results press release which is available on our website at investors.gf.com, along with today's accompanying slide presentation. This call is being recorded, and a replay will be made available on our investor relations webpage. During this call, we will present both IFRS and adjusted non-IFRS financial measures. The most directly comparable IFRS measures and reconciliations for adjusted non-IFRS measures are available in today's press release and accompanying slides. Certain statements on today's call may be deemed to be forward-looking statements. Such statements can be identified by terms such as believe, expect, intend, anticipate, and may. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we undertake no obligation to update any forward-looking statements we make today. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today. as well as risks and uncertainties described in our SEC filings, including the sections under the caption risk factors in our final prospectus filed with SEC on October 29 to 2021 in connection with our IPO. We will begin today's call with Tom providing a summary update on our end markets, capacity expansion and technologies, following which they will provide details on our fourth quarter and full year financial results and also provide first quarter guidance. We will then open the call for questions. We request that you please limit your questions to one with one follow-up. I will now turn the call over to Tom for his prepared remarks.

Thank you, Suki. Welcome, everyone, to our fourth quarter and full year 2021 earnings call. I'd like to start by reflecting on last year. By any measure, 2021 was an outstanding year for GF. We drove an acceleration of our business plan by capitalizing on the vital role we play in the semiconductor supply chain. We created, defined, and implemented a new economic model for our industry, and we used it to increase visibility and support our customer success with over 30 significant long-term agreements. With the entire world focused on our industry, we played and continue to play an important role by articulating the importance of semiconductor manufacturing and redefining innovation for our industry. Finally, we took GF Public, which was the culmination of over a decade of work to build an at-scale global semiconductor manufacturer with strong technological differentiation and driving meaningful earnings growth. Through strategic partnerships with our customers, we believe we have positioned our business for sustained growth over the next three to four years, with a trajectory to deliver accelerated profitability. We are well positioned to execute on our plan to deliver a more than 50% output increase exiting 2023 compared to 2020 by adding capacity in Malta, New York, Dresden, Germany, and in Singapore. We are continuing to execute on our plan to mix up our 200 millimeter facilities in Burlington and Singapore with differentiated single source SOI CIGIE, and feature-rich CMOS technologies. We expect that all of this combined will result in consistent execution from GF that will enable us to achieve our long-term sustainable financial model. That is investing 20% of revenue on CapEx to deliver consistent growth while generating strong free cash flow, and as a result, delivering meaningful shareholder value. Now, moving on to our fourth quarter. We are pleased to report a quarter of strong top-line and profitability growth, demonstrating the continued momentum of our strategy. Fourth quarter revenue grew 9% quarter-on-quarter, driven by higher wafer output, higher ASPs, and increased non-wafer revenue. Fourth quarter adjusted earnings per share came in at 18 cents. Now, Dave will provide more details on the financials in just a moment, but first let me give a summary of the fourth quarter revenue by our end markets. First, in our smart mobile device end market, which comprised about 48% of fourth quarter revenue, we achieved strong year-over-year quarterly growth of roughly 24%. Growth was driven by a combination of higher ASPs, better mix, and higher shipments as we started to ramp customer designs in new applications. For the full year, our smart mobile device end market grew roughly 38% over 2020. GF's growth in this end market outpaced smartphone industry growth due to our industry-leading solutions and new connectivity standards, such as sub-6 gigahertz 5G and Wi-Fi 6 and 6E. These new standards are driving the need for GF's high-performance RFSOI technologies. In addition, in 2021, GF entered the large and growing Wi-Fi 6, 6E, SOC, and cellular transceiver markets. with long-term customer agreements that will expand our market share significantly. We are also seeing strong traction in areas such as near-field communication, display, and image sensing. One example is the increased attach rates for NFC authentication in Android smartphones. Other examples include specialty power applications that prolong battery life of 5G handsets, and image sensing processors which power image sensors and cameras. The market for these processes is expected to grow over 25 percent in 2022. Lastly, our long-term agreements covering the smart mobile device end market with our key customers are providing us with long-term visibility for secular growth over the next few years. Next, our communications infrastructure and data center end market, which constituted approximately 16 percent of fourth quarter revenue, saw sequential growth in the quarter of 7% due to customer share gains in the data center and market. Over the course of 2021, we secured a multi-year long-term agreement with a tier one wireless infrastructure customer for our advanced SIGI technology and a multi-year LTA with a tier one enterprise networking customer. In addition, we established ourselves as the industry leader in silicon photonics, our monolithic and hybrid solution garnered over $500 million in new design wins in the year, and silicon photonics revenue almost tripled in 2021, and we expect it to more than double again in 2022. We expect continued growth in communications infrastructure and data center, this end market, throughout the year, and anticipate double-digit year-over-year growth in 2022, driven by strong demand for 5G infrastructure and optical devices. Moving on to our home industrial IoT end market, fourth quarter revenue was roughly 14% of the total and grew approximately 20% year-over-year. We saw strong sequential growth in this end market, fueled by the transition from Wi-Fi 5 to Wi-Fi 6 for wireless connectivity in IoT applications and an increase in contactless transactions. We are seeing strong growth demand for wireless connectivity for consumer, industrial asset tracking, and audio products, which are backed by multi-year LTAs that we have signed with leading customers. We expect this end market to be our fastest growing market this year, driven by our strong portfolio of differentiated wireless connectivity, edge compute, and power management technologies. Touching next on automotive, revenue in this end market was approximately 5% of our total fourth quarter revenue, but it more than doubled from a year ago. The strong year-over-year revenue growth was driven by a ramp of new designs for ADAS, safety applications, and infotainment that have been in development and qualification over the past few years. Adjusting for a sizable capacity access fee in the third quarter, automotive quarterly sequential growth would have been roughly 13 percent. 2021 also marked key partnership announcements with Ford, BMW, and Bosch. We are very excited about our strong traction in the automotive end market and anticipate double-digit growth for this market in 2022. We have a number of customers in the 4D radar space and in battery management for EVs that will begin to ramp in 2023, fueling our growth beyond traditional auto applications into new automotive growth applications. In our compute end market, revenue is roughly 6% of total and declined year over year as expected. As we have mentioned previously, the PC market we served in the past will continue to decline as our customers transition their products to single digit nanometer. We continue to forecast year over year decline in this end market in 2022. However, we've been focusing our investments on solutions that play to our strengths in mixed signal and power that complement and work side by side with these single-digit nanometer processor designs. For instance, we secured a multi-year LTA with a Tier 1 producer to manufacture controller ICs for this end market. We expect to see stabilization in the second half of 2022 from ramps of these new high-margin customer designs in this end market. Next, I would like to provide a brief update on our ongoing capacity expansions. For 2022, our plan is to increase capacity by high single digits primarily driven by the expansion plans underway in Dresden. All of this expansion in capacity is the support of customer demand for our differentiated technologies such as 22FDX, image sensor processors on 28 and 40 nanometer technologies, and BCD light and embedded non-volatile memory technologies. Also, construction of our Phase I modular expansion in Singapore remains on track, with equipment slated to go into that facility in the second half of 2022 to support first production outs in the first half of 2023. We are working closely and hand-in-hand with our construction contractors and our equipment suppliers to maintain our capacity expansion schedules. All of our expansion investments are backed with customer long-term capacity reservation agreements and significant prepayments. Further, the majority of this expansion investment is in support of single source business. In addition to our ongoing capacity expansion, we continue to make solid progress in enhancing our differentiated technologies. For example, in 2021, we had 19 new technology qualifications for production of our customer products. These include qualifications for image sensor, automotive, RFSOI, ultra low power BCD power management projects. We aggressively started development, then qualified and ramped our 12 low-power RF technology in 2021. We added six new feature groups to our proprietary FTX platform, such as resistive RAM, automotive-grade capable, and next-generation RF, and sampled early customer circuits on our GaN power and RF and power amplifier technologies. For 2022, we are on track to almost double the number of technology qualifications from last year for all our customers, covering silicon photonics, FDX, BCD, and silicon germanium HBT technologies. Now, before I hand the discussion over to Dave, let me get a few thoughts on the overall industry supply demand dynamics and the capacity being added to address the shortfall of supply to today's demand and growing need. We spent a lot of time in thoughtful analysis of this very important topic. So, let me start with our SAM. This is 12 nanometer and above. Now, this SAM is growing in the mid to high single digits in units. That's 300-millimeter equivalent wafers, and that growth is over the next five years. It's important to note we're talking about unit growth in this imbalance and not ASPs. Conservatively, we believe the shortfall in industry supply to our SAM today is in the mid to high single-digit range. This is offset – I'm sorry, this is off a base of industry-wide capacity of approximately 15 million waivers per year. So let's compare today's supply shortfall and the demand growth to the announced capacity additions in our SAM. Based on announced FAB expansions, both those FABs being tooled or presently under construction, supply will grow around 4 percent over the next five years. If we exclude China-based foundries, that number drops from 4 percent to 2.5 percent over the next five years. So based on this analysis, and our customers' continued interest in investing for long-term future capacity, we believe we are making the right long-term investments that will enable us to almost double our revenue while delivering the necessary return on invested capital for our business. In summary, we ended 2021 on a strong note and business momentum. We are seeing robust growth from our customers in the end markets we serve, We are prudently and in partnership expanding our capacity to service their needs and making great progress in accelerating our differentiated technologies for the future. With that, let me turn the call over to Dave to provide the financial details for the fourth quarter and also provide you our guidance for the first quarter. Over to you, David.