Aug 5, 2026 earnings call — Optical networking and quantum drive growth
GF reported Q2 revenue of $1.786 billion and gross margin of approximately 29.9%, above the high end of guidance.
Revenue $1.8B (est $1.8B) · EPS $0.46 (est $0.43)
Key quotes
"In the second quarter alone, we secured 7 new optical networking design wins with customers across both pluggable transceiver suppliers as well as major hyperscaler and networking players."
"In May, we launched Quantum Technology Solutions, a new dedicated team and set of capabilities within GF that will enable the quantum industry to move from prototypes to high-volume production."
"In June, we completed our previously announced acquisition of Synopsys ARC processor IP Solutions business, an important milestone in advancing our strategy in physical AI and a notable step change in expanding GF's serviceable addressable market."
Analyst Q&A 6
data center capacity timing
Q (Christopher Caso · Wolfe): He asked when you will add capacity for comms data center and how the $300 million CHIPS Act grant lowers CapEx for silicon photonics.
A: Management said demand is strong and they can ramp capacity inside existing fabs quickly. They expect to bring more wafers out through the back half of this year and into 2027. The CHIPS partnership will accelerate innovation in PICs, new materials, and packaging and helps support U.S.-based development.
"One advantage for us is we're building that capacity out within our existing fab footprint, and we have, let's say, ample fab footprint today to ramp capacity relatively quickly." — Timothy Breen (CEO)
silicon photonics growth and Quantum
Q (Sreekrishnan Sankarnarayanan · TD Cowen): He asked why silicon photonics growth was revised much higher and how your PICs compare to competitors. He also asked about Quantum commercialization and interest after the $375 million grant.
A: Management said demand for photonics is very strong and durable, validated across the ecosystem including hyperscalers, so they are increasing photonics capacity and are on track or ahead of previous targets. On Quantum, they have launched 4 significant new engagements since the announcement and see that ramp continuing; Quantum work ties into their photonics roadmap and is seen as a medium-term call option to scale modules to high-volume.
"Since that announcement, we've launched 4 significant new engagements with some -- a subset of the players that are supporting us in that announcement, and we see that ramp continuing." — Timothy Breen (CEO)
revenue from recent IP deals
Q (Karl Ackerman · BNP Paribas): He wanted revenue and OpEx impact from the ARC and Photon/IVR deals and the rationale and early customer engagements.
A: Management said the acquisitions bring capabilities customers value and let GF engage earlier in design conversations, creating feedback into manufacturing road maps. Financially, the MIPS and ARC deals are revenue-generative from day 1; the incremental revenue expectation for 2026 moved higher after closing the ARC deal, and they expect R&D spend to be largely covered by that incremental revenue.
"The midpoint of that range, as you can kind of infer from my prepared remarks, has moved up from $60 million to $100 million to $100 million to $120 million, call it, $30 million of revenue growth." — Sam Franklin (CFO)
SiGe share and satellite comms
Q (Mehdi Hosseini · Susquehanna International Group): He asked what portion SiGe contributes to optical revenue, whether SiPho and SiGe will have synergies for NPO, and about substrates and growth in satellite communications.
A: Management said SiGe growth is driven by higher bandwidth needs and the shift to optical; SiGe is already larger than their silicon photonics business today and will continue to grow. On SATCOM, they said STCOM is a strong growth market driven by LEO deployments, requiring higher-performance RF and new substrates and RF technologies like GaN, and they expect long-term growth from consumer and industrial deployments.
"Just to give you a dimension, our SiGe business is actually larger than our silicon photonics business today." — Timothy Breen (CEO)
segment guidance and drivers
Q (Timothy Arcuri · UBS): He asked whether the implied December growth is about 10% and wanted qualitative segment guidance for September and how segments move into year end.
A: Management confirmed the inference that mobile is down (low teens for the full year) while automotive should rebound to low double-digit growth in H2. IoT demand partly picked up from mobile customers and is expected to grow about 10% to 15% year-over-year, and comms infra and data center are driving the big change with 50% to 60% year-over-year growth.
"We said that certainly for the remaining part of this year, just given some of the dynamics around mobile, we think that's sort of down low teens for the full year." — Sam Franklin (CFO)
CID growth outlook and margins
Q (Christopher Muse · Cantor Fitzgerald): He asked whether CID's exit rate implies strong growth into 2027 or a digestion period, and how to weigh mix, pricing, and utilization for future gross-margin gains.
A: Management said the Investor Day long-term model still stands and they expect 30-plus percentage growth into 2027 and beyond for comms infra and data center. They added demand is strong but the pace depends on manufacturing productivity and capacity expansion; mix is the biggest near-term margin driver, with utilization and structural cost improvements also contributing to margin expansion.
"I would still stand by our long-term model that we shared a couple of months back in terms of that 30-plus point percentage growth going into 2027 and beyond." — Sam Franklin (CFO)