GlobalFoundries Inc.

Good day and thank you for standing by. Welcome to the conference call to review fourth quarter of fiscal year 2022 financial results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sam Franklin, Head of Capital Markets and Investor Relations. Please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to Global Foundry's fourth quarter and fiscal 2022 earnings call. On the call with me today are Dr. Thomas Caulfield, CEO, and David Reeder, CFO. A short while ago, we released GF's fourth quarter and full year 2022 financial results, which are 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'll present both IFRS and adjusted non-IFRS financial measures. The most comparable IFRS measures and reconciliations for adjusted non-IFRS measures are available in today's press release and accompanying slides. I'd remind you that these financial results are unaudited and subject to change. 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, or by the use of the future tense. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we made 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 in the sections under the caption, Risk Factors, in our annual report on Form 20F filed with the SEC on March 31, 2022, and on our current reports on Form 6K filed with the SEC. We'll begin today's call with Tom providing a summary update on the current business environment and technologies, following which Dave will provide details on our end markets and fourth quarter and full year 2022 results, and also provide first quarter 2023 guidance. We'll then open the call for questions. We request that you please limit your questions to one with one follow-up. I'll now turn the call over to Tom for his prepared remarks.

Thank you, Sam, and welcome everyone to our fourth quarter earnings call. I would like to start by reflecting on our first full year as a public company. October 28, 2022 marked the one-year anniversary of our listing on the NASDAQ, and by any measure, it's been a strong year for GF. I'm immensely proud of our team across the globe for their commitment and dedication in helping GF take significant steps towards delivering our long-term strategic objectives that we set out prior to our IPO. GF continues to position itself as a crucial enabler of the semiconductor supply chain, and we remain deeply committed to working with our customers in providing feature-rich, differentiated, and innovative technology solutions to meet the long-term demand trends across each of the end markets that we serve. Simply put, We build capacity for our differentiated offerings our customers want, where they want it, and in partnership engagement that creates this capacity with the best economics for both partners. We've continued to implement a long-term partnership-driven model with our industry, which is driving improved visibility for our business through this period of macroeconomic uncertainty. In 2022, we added 10 additional customers under long-term agreement and secured more than $5 billion of incremental lifetime revenue. Going forward, we continue to see strong alignment between our customers' needs for certainty and security of supply and our capacity to provide long-term, dedicated foundry services. We are proud to have participated in the development and passage of the CHIPS and Science Act of 2022. This is the most important piece of legislation for our industry in recent times and we expect to continue playing a key role in delivering targeted capacity critical to the reshoring of supply within the U.S. semiconductor ecosystem. Finally, we continue the expansion of our global footprint to align with our customers' committed demands, and in 2022, we successfully delivered incremental capacity at our facilities in Singapore and Dresden, Germany. As we look to 2023 and beyond, we remain steadfast with our principles and agile as an organization by focusing on incremental capacity to meet our customers' needs. Let me now touch on our results. We exceeded the high end of our November provided guidance for both top line and profitability as our teams continue to deliver our strategic and financial priorities, helping us bring our first year as a public company to a very successful close. In the fourth quarter, GF revenue grew 14% year over year, driven by richer mix and average selling prices, as well as higher non-waiver revenue. This revenue growth, coupled with strong operational execution, resulted in improvement to adjusted gross margin to 30.1% in the quarter, which is an 8.6-point improvement from the year-ago period. As a result, we delivered adjusted earnings per share of $1.44, which was the high end of our guidance range and includes the proceeds from the sale of our East Fishkill FAB to OnSemi. Dave will provide more color on our financials in his section. Let me now move to providing a brief update on the current business environment. Despite our record output in 2022, we remain cautious regarding the macroeconomic headwinds facing our industry in the first half of 2023. Our business is not immune from these headwinds. As we communicated in our third quarter update, We took the decision to proactively put in place a restructuring plan, including a number of cost containment initiatives, which we began to implement during the fourth quarter. These initiatives are aimed at all aspects of our business, and as we head into 2023, we will continue to focus on ways that we can improve our productivity, reduce input costs, and position GF to emerge even stronger from the current macroeconomic environment. Longer term, GF's growth drivers remain firmly intact, and we continue to see opportunities to gain share in our larger end markets, such as premium tier smart mobile devices, as well as in critical growth segments such as automotive and industrial IoT. In automotive, we are excited to be playing an important role on the development and expansion of the market for autonomous, connected, and electrified vehicles. We continue to grow our differentiated offerings to our customers across automotive applications such as processing, sensing, safety, infotainment, and battery management. As you may have seen last week, we are extremely pleased to report that General Motors has entered into a long-term agreement with GF to secure a capacity corridor in our advanced fab in upstate New York for GM's U.S. supply chain. This first-of-its-kind multi-year agreement for GF brings a critical manufacturing process to the U.S. and supports GM's strategy to reduce the number of unique chips needed to power increasingly complex and tech-laden vehicles through the end of the decade. With this strategy, we expect to produce chips in higher volumes with better quality, predictability, and the best economics. In aggregate, our LTAs have increased from the prior quarter as the number of customers under LTA has grown from 38 to 40 and the total value of these LTAs now at approximately $27.5 billion. Additionally, the amount of committed prepayment and capacity reservation fees have increased 34% from a quarter ago to approximately $5 billion. Our LTAs continue to serve as a solid foundation for working with our customers during times of demand uncertainty. Due to the widely reported inventory correction, in some cases, we have entered into negotiation with our customers to manage their short-term demand needs while working to preserve the intended economics and long-term value under these contracts. As we reported in our third quarter earnings call, we expect this can be accomplished through adjustments to the contract, including duration, ASPs, mix, delivery profiles, and in some cases, underutilization payments. I will now provide a brief update on our recent technology achievements. In the fourth quarter, we completed six technology qualifications, bringing our total for the year to 27. On our 45 nanometer silicon photonics platform, we added nine additional features in the quarter. Additionally, we had five more customer tape outs on 45 CLO, bringing our total for 2022 to 16. This clearly demonstrates the aggressive adoption of this differentiated technology solution. And finally, in November, GF and Purdue University announced a strategic partnership to strengthen and expand collaboration on semiconductor research and education with a joint focus on R&D. This relationship with Purdue exemplifies our growing network of R&D collaborations as part of our broader GF Labs initiative that we launched in 2022. To summarize, We successfully closed out Q4 with a delivery of record financial performance in 2022, our first full year as a public company. Despite the current economic challenges, we are well positioned to achieve our long-term strategic model and continue to work with our customers to develop and manufacture innovative, differentiated solutions. With that, let me turn it over to Dave.