GlobalFoundries and Silicon Labs: A Strategic Alliance Driving IoT Semiconductor Growth

The Internet of Things (IoT) is reshaping industries, from smart homes to industrial automation, but its growth hinges on semiconductors that balance performance, power efficiency, and cost. GlobalFoundries (GF) and Silicon Labs have emerged as a pivotal partnership in this space, leveraging GF’s 40LP process to address the unique demands of IoT manufacturing. This article evaluates how the 40LP platform, combined with strategic collaboration, is unlocking scalable, high-margin opportunities in a rapidly expanding market.

The 40LP Process: A Technical Foundation for IoT Scalability

GF’s 40LP process is engineered for power- and price-sensitive applications, making it ideal for IoT devices. Key features include 1.1V CMOS logic, multiple I/O voltage options (1.8V, 2.5V, and 3.3V), and advanced passive components like MIM capacitors and eFuses. These capabilities enable low leakage in standby mode and an exceptional noise-to-signal ratio, critical for always-on devices such as wearables and edge sensors [3]. The 40LP-RF/mmWave variant further enhances performance with thick metals and transmission lines, supporting high-frequency wireless communication [3].

This technical foundation aligns with IoT’s need for energy efficiency and miniaturization. For instance, the 40LP process’s compatibility with RF and analog components allows seamless integration of Wi-Fi 6 and Bluetooth modules, reducing design complexity and BOM costs [3].

Strategic Collaboration: Validating Market Potential

The partnership between GF and Silicon Labs has been a cornerstone of the 40LP process’s adoption. By shipping over 10 million Wi-Fi units built on the 40LP platform, including the SiWX917 Wi-Fi 6 chip, the collaboration has demonstrated the process’s scalability and reliability [1]. The SiWX917, a single-chip solution, addresses key IoT challenges: extending battery life while maintaining secure, persistent connectivity [1].

This milestone underscores the 40LP process’s ability to meet the demands of battery-powered devices. Silicon Labs’ success with the SiWX917 has not only validated GF’s manufacturing capabilities but also highlighted the platform’s potential to capture a growing share of the IoT semiconductor market [1].

Financial Performance: A High-Margin Opportunity

GF’s Q2 2025 financial results reinforce the 40LP process’s role in driving profitability. The company reported $1.688 billion in revenue, a 24.2% gross margin, and $228 million in net income [2]. While the 40LP’s direct contribution to these figures is unspecified, its role in producing high-volume, low-power SoCs like the SiWX917 suggests it is a significant revenue driver.

The 40LP process’s cost-effectiveness further enhances margin potential. By enabling energy-efficient designs, it reduces power consumption for end-users, a critical factor in markets prioritizing sustainability. This aligns with broader industry trends, where IoT adoption is increasingly tied to ESG (Environmental, Social, and Governance) goals [1].

Strategic Implications and Future Outlook

The GF-Silicon Labs alliance exemplifies how specialized manufacturing can address IoT’s unique challenges. The 40LP process’s ability to balance performance, power efficiency, and cost positions it as a key enabler for next-generation edge devices. As IoT adoption accelerates—projected to surpass 30 billion connected devices by 2025—the demand for such solutions will only grow [1].

However, risks remain. The 40nm node is not the most advanced in the industry, and competitors like TSMC and Samsung offer sub-40nm processes for high-performance IoT applications. Yet, the 40LP’s focus on power efficiency and integration capabilities provides a differentiated value proposition, particularly for cost-sensitive markets [3].

Conclusion

GlobalFoundries’ 40LP process, validated by Silicon Labs’ commercial success, represents a compelling investment thesis. By addressing IoT’s core requirements—low power, high integration, and cost efficiency—it has established a scalable, high-margin niche in a $1.5 trillion semiconductor market. As the partnership expands into new applications, such as industrial automation and smart cities, the 40LP platform’s strategic value is poised to grow.

Source:
[1] GlobalFoundries and Silicon Labs Partner to Scale Industry-Leading Wi-Fi Connectivity [https://investors.gf.com/news-releases/news-release-details/globalfoundries-and-silicon-labs-partner-scale-industry-leading]
[2] GlobalFoundries Reports Second Quarter 2025 Financial Results [https://investors.gf.com/news-releases/news-release-details/globalfoundries-reports-second-quarter-2025-financial-results]
[3] GLOBALFOUNDRIES, [https://europractice-ic.com/technologies/asics/globalfoundries-old/]