GlobalFoundries: Seizing the AI Semiconductor Supercycle Through Strategic Partnerships and Photonics Innovation

The semiconductor industry’s shift toward artificial intelligence (AI), 5G/6G, and high-performance computing has created a $200 billion market opportunity by 2030—one that demands advanced packaging and photonics capabilities to overcome the limits of traditional chip scaling. Among the companies best positioned to capitalize on this shift is GlobalFoundries (GFS), thanks to its twin pillars of innovation: a groundbreaking partnership with Singapore’s A*STAR research agency and its newly launched Advanced Packaging and Photonics Center in New York. These initiatives not only solidify GF’s dominance in critical technologies but also align with geopolitical tailwinds that will drive supply chain resilience and outsized returns for investors.

The Singapore-A*STAR Partnership: A Blueprint for AI-Driven Growth

GlobalFoundries’ May 2025 Memorandum of Understanding with Singapore’s Agency for Science, Technology and Research (ASTAR) is a masterstroke in strategic R&D. The collaboration focuses on advanced packaging—a technology critical for integrating AI chips with high bandwidth, low latency, and energy efficiency. By combining GF’s manufacturing scale with ASTAR’s expertise in photonics and microelectronics, the partnership aims to deliver “one-stop” semiconductor solutions (manufacturing, packaging, testing) from GF’s Singapore facility.

Key advantages of this partnership:
- Technology Leadership: GF gains access to ASTAR’s cutting-edge R&D, including tools for compact, energy-efficient chip designs tailored for AI and 5G/6G.
- Supply Chain Resilience: Singapore becomes a global hub for advanced packaging, reducing reliance on Asian competitors and aligning with the country’s “Manufacturing 2030” vision.
- Talent Pipeline*: Workforce upskilling programs ensure GF has the expertise to meet surging AI-driven demand.

The MOU’s immediate impact? GF is already supplying critical equipment to ASTAR, accelerating the timeline for commercializing advanced packaging solutions. This positions GF to capitalize on $120 billion in AI semiconductor spending by 2030* (per IDC estimates).

The New York Photonics Center: A U.S. Government-Backed Moat

GlobalFoundries’ $575 million investment in its New York Advanced Packaging and Photonics Center—bolstered by $75 million from the U.S. CHIPS Act and $20 million from New York State—cements its role as a national security asset. The facility, part of its trusted foundry accreditation, will produce chips for defense systems entirely within the U.S., addressing geopolitical risks and securing federal contracts.

Critical capabilities here include:
- Silicon Photonics: Integrating optical and electrical components on a single chip to boost performance for data centers and edge devices.
- 3D/Heterogeneous Integration: Enabling GF to stack chips for AI workloads, a capability essential for next-gen computing.

This chart highlights GF’s undervaluation relative to peers, even as it secures billions in government funding and partnerships.

Why GF’s Stock is Undervalued—and Poised to Surge

Despite GF’s strategic moves, its stock trades at just 8.5x 2025E EV/Sales, far below peers like TSMC (13x) and Intel (11x). This discount ignores two critical catalysts:
1. Revenue from AI/5G Contracts: The ASTAR partnership and New York center are on track to deliver commercial-scale production by 2026, with initial contracts from cloud providers and defense firms already in the pipeline.
2. Geopolitical Tailwinds*: U.S. and Singapore incentives (totaling $876 million in funding) reduce GF’s capital costs and amplify margins.

This market is projected to grow at 12% CAGR, with GF’s dual-hub strategy (Asia + U.S.) uniquely positioned to capture share.

Act Now Before Catalysts Materialize

GlobalFoundries is at an inflection point. Its Singapore-U.S. twin-engine strategy addresses both technology leadership (AI/Photonics) and supply chain security, two pillars of the $200 billion semiconductor supercycle. With valuation multiples at historic lows and upcoming revenue milestones, investors have a rare opportunity to buy a growth leader at a value price.

Recommendation: Buy GFS at current levels. Set a 12-month price target of $35 (up 40% from current $25) based on:
- 10% EPS accretion from A*STAR collaboration revenues.
- 15% margin expansion from CHIPS Act subsidies and scale efficiencies.
- Multiple re-rating as peers trade at 10–12x EV/Sales.

The window to act is narrowing. As GF’s partnerships begin delivering chips for AI supercomputers and defense systems by 2026, its stock will reflect its true value—or surpass it.

Don’t miss the train. The AI semiconductor boom isn’t just coming—it’s here. GlobalFoundries is leading the way.