(Reuters) -Contract chipmaker GlobalFoundries forecast fourth-quarter profit and revenue above Wall Street estimates on Wednesday, driven by strong demand from its clients in the automotive and data center markets.
Shares of the Malta, New York-based GlobalFoundries rose around 6% in premarket trading, after also topping expectations for third-quarter profit.
The company has seen higher demand for its made-to-order chips, as automakers focus on electric vehicles and advanced driver-assistance systems and as tech companies look to upgrade data center capacity to run their artificial intelligence models.
Automotive clients account for about 16% of the company’s annual revenue on average, while communications, infrastructure and data center customers account for about 10.5%. Its biggest segment is smartphones, representing over 40% of revenue.
For the fourth quarter, GlobalFoundries expects adjusted earnings of 47 cents per share, plus or minus 5 cents, compared with analysts’ estimate of 46 cents per share, according to data compiled by LSEG.
It expects revenue of $1.80 billion, plus or minus 25 million, a touch above estimates of $1.79 billion.
One of the few large foundries with significant capacity outside China and Taiwan, GlobalFoundries makes chips for companies including Advanced Micro Devices, Qualcomm, and NXP Semiconductors. It runs chip plants in Germany, Singapore, New York, and Vermont.
In recent weeks, the company has signed a technology licensing deal with larger peer TSMC, and announced a 1.1 billion euros expansion of its facility in Germany, backed partly by the German government.
For the quarter ended September 30, GlobalFoundries reported earnings of 41 cents per share, topping estimates of 37 cents. Quarterly revenue of $1.69 billion edged past estimates of $1.68 billion.
Its shares have fallen nearly 19% this year, as of last close.
(Reporting by Arnav Mishra in Bengaluru; Editing by Sahal Muhammed)
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