Globalfoundries Inc (NASDAQ:GFS) stock fell 0.52% (As on August 8, 11:35:28 AM UTC-4, Source: Google Finance) after the company forecast third-quarter revenue below analysts’ estimates as the global semiconductor industry battles a supply glut. High inflation combined with a post-pandemic slump in demand for gadgets left electronics makers and chipmakers with bloated and unsold stock, dragging down demand. Taiwan Semiconductor Manufacturing Co, the world’s largest contract chipmaker, and peers have also flagged broader end market weakness as the global economy recovers more slowly than anticipated. GlobalFoundries, which makes wireless connectivity chips used in mobile phones, WiFi routers and radio towers also said in May that a return to normal inventory and demand levels is slower than expected.

GFS in the second quarter of FY 23 has reported the adjusted earnings per share of 53 cents, beating the analysts’ estimates for the adjusted earnings per share of 50 cents. The company had reported the adjusted revenue of $1.85 billion in the second quarter of FY 23, beating the analysts’ estimates for revenue of $1.83 billion. The company delivered adjusted gross margin of 29.6%, adjusted operating margin of 18.3%, adjusted net income of $297 million and Adjusted EBITDA of $668 million. At the end of quarter, cash, cash equivalents and marketable securities were of $3.3 billion. The company has generated $146 million of free cash flow in the quarter, as GF’s global teams diligently managed costs, while driving differentiated solutions to meet the customers’ needs, across several critical growth markets.

The company, whose customers include Lockheed Martin and General Motors, expects revenue of $1.83 billion to $1.87 billion in the third quarter. Analysts on average were expecting revenue of $1.88 billion, according to Refinitiv data. It forecast adjusted earnings per share of 46 cents to 54 cents, the midpoint of which at 50 cents was also below estimates of 52 cents.

Additionally, GF and Lockheed Martin announced a strategic collaboration to advance U.S. semiconductor manufacturing and innovation and to increase the security, reliability and resilience of domestic supply chains for national security systems. The U.S. Department of Defense has accredited GF’s advanced manufacturing facility in Malta, New York, as a Category 1A Trusted Supplier with the ability to manufacture secure semiconductors for a range of critical aerospace and defense applications.

Meanwhile, Chipmaker GlobalFoundries has shelved its plan to appoint former Amazon executive Tim Stone as chief financial officer.