GlobalFoundries CEO: Earnings benefited from balanced supply chain, diverse end markets
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GlobalFoundries CEO Tom Caulfield said Tuesday that the semiconductor maker's balanced supply chain and its diverse end markets allowed the company to deliver Street-beating results for Q2.
Speaking to CNBC, the head of GlobalFoundries (NASDAQ:GFS) also commented on the recently passed CHIPS Act, saying that it would take 18 months to two years to bring new capacity into production. He added that it could take up to three years if a new facility needed to be built.
Caulfield's comments followed the release of quarterly results that topped analysts' expectations. Revenue climbed 23% from last year to reach nearly $2B.
The company also issued an upbeat forecast for Q3. The firm predicted adjusted EPS of $0.59-$0.65, above the current analyst consensus of $0.44. 
Similarly, GFS said its revenue total would likely hit a range between $2.035B and $2.065B. Analysts had targeted a figure around $2B.
Caulfield said it started the year with demand outpacing its capacity by about 25%, a fact which has provided a "shock absorber" as the economy has slowed in 2022. He noted that the firm also benefited from a flexible supply chain, which has let it keep up its production schedule.
"We have a global supply chain and so the companies that are better balanced in their supply chain will be able to better execute and prosecute their business when the demand is there," he said.
The GlobalFoundries CEO stated that the firm also received a boost from a diverse set of clients, letting it focus on areas of strength even as some markets lost momentum amid the current economic uncertainty.
"There are strong end markets right now, there are weaker ones. And we play in a broad range of those," he said.
While semiconductor stocks in general took a step back on Monday in the wake of a sales warning from Nvidia (NVDA), GlobalFoundries (GFS) rallied, climbing more than 11% on the day. Shares rose another 8% in Tuesday's early trading following the release of the strong quarterly report.
GFS risen more than 50% since reaching a 52-week closing low in early July.
As a U.S.-based chip maker, GFS is seen as one of the beneficiaries of the CHIPS Act, along with names like Intel (INTC), Texas Instruments (TXN), ON Semiconductor (ON) and Analog Devices (ADI).

For more on the impact of the CHIPS Act, see why Bank of America spotlights INTC as the biggest beneficiary of the initiative.