GlobalFoundries posts record gross margin as optical networking takes center stage

The contract chipmaker's Q3 2026 results, released November 4, showed revenue of $1.899 billion, a 6% increase from the previous quarter and 13% year-over-year. The standout performer was the communications infrastructure and data center segment, which saw an 81% year-over-year revenue increase and now accounts for approximately 17% of total company revenue.

Optical networking boom

This growth stems from heavy demand for silicon photonics and silicon germanium (SiGe) technologies used in AI-focused data centers. Silicon photonics builds components that move data using light directly onto silicon chips, enabling faster and more efficient data transfer between servers and racks.

The company now has more than 50 silicon photonics customers, including seven of the top 10 optical transceiver suppliers.

Strategic shift

GlobalFoundries is deliberately reallocating manufacturing capacity away from lower-margin mobile device chips toward optical data center connectivity and custom automotive silicon. The company raised its silicon photonics revenue outlook to $500 million for 2026 and expects that business to reach an annualized run rate of approximately $1 billion by the end of 2027, a year ahead of previous estimates.