Global Sources
EE Times-Asia
Stay in touch with EE Times Asia
?
EE Times-Asia > Manufacturing/Packaging
?
?
Manufacturing/Packaging??

AMD ditches Globalfoundries

Posted: 07 Mar 2012 ?? ?Print Version ?Bookmark and Share

Keywords:APU? 28nm node? manufacturing process?

Advanced Micro Devices Inc. (AMD) is relinquishing its 14 percent stake in Globalfoundries Inc. As part of an amended foundry supply agreement between the two companies, AMD will pay Globalfoundries $425 million. AMD will now be able to use another foundry provider at the 28nm node.

Globalfoundries agreed to waive a contractual requirement for AMD to have its 28nm accelerated processing units (APUs) built by Globalfoundries for a specified time period. Last year, reports were circulating that AMD had decided to cancel the 28nm APUs that Globalfoundries was to build for the firm and use 28nm gate-last high-k metal-gate manufacturing process technology from Taiwan Semiconductor Manufacturing Co. Ltd (TSMC).

At the time the reports circulated in November, some speculated that AMD wanted to part ways with Globalfoundries at 28nm because Gloablfoundries' 28nm process wouldn't be ready for volume production until the middle of 2012. But others suggested that AMD was nervous about on-going yield issues at advanced nodes at Globalfoundries. AMD blamed poor yields at the 32nm node at Globalfoundries when it issued a third quarter profit warning last yar, and 32nm yield issues were also reportedly to blame for Globalfoundries' management shakeup last summer, when original CEO Doug Grose was replaced by Ajit Manocha.

"Today marks the start of a new era for Globalfoundries as it becomes a truly independent foundry," Manocha said through a statement.

In a separate statement, AMD CEO Rory Read said AMD was still committed to a long-term strategic partnership with Globalfoundries, which was formed from the spin-out of AMD's manufacturing operations in 2009. "We made significant progress last year to strengthen our relationship, and we're pleased with Globalfoundries' recent performance in meeting our delivery requirements across our product line," Read said.

Under the revised agreement, AMD is no longer required to make a quarterly payment to Globalfoundries based on the availability of 32nm capacity in 2012. Those payments, which AMD said were expected to amount to about $430 million total, were part of an amended foundry supply agreement the two firms agreed to in 2011, amid 32nm yield issues.

AMD said the two companies also established a wafer price mechanism with negotiated prices based on a take or pay arrangement in 2012, established a framework for wafer pricing in 2013.

TSMC to benefit from AMD's changes in strategy?
EE Times Asia published an article last November reporting speculations that have surfaced suggesting AMD could scrap its 28nm APU production at Globalfoundries in order to move the manufacturing to TSMC.
Sources at the company have confirmed with EE Times that roadmap changes are "imminent" and that "28nm schedules aren't what we wanted." Whether those changes pertain to a switch of manufacturing partners, however, has yet to be fully substantiated.

Globalfoundries said AMD's 32nm processor shipments increased by more than 80 percent from the third quarter to the fourth quarter and now represent a third of AMD's overall processor mix. Globalfoundries said it exited 2011 as the only foundry to have shipped more than 100,000 32nm high k metal gate wafers.

The $425 million payment from AMD to Globalfoundries will be structured as follows: AMD will pay $150 million Monday, another $50 million by July 2, another $50 million by Oct. 2 and $175 million in the first quarter of 2013, AMD said. The company said it expects to record a one-time charge of $703 million in first quarter of this consisting of the $425 million cash payment and a $278 million non-cash charge based on transferring all of its remaining ownership interest in Globalfoundries.

AMD owned 34 percent of Globalfoundries at the time of the spin off, but has decreased its stake in the firm several times through various transactions, most recently in December 2010 when Abu Dhabi's Advanced Technology Investment Co. (ATIC) bought Chartered Semiconductor and folded it in to Globalfoundries. ATIC now has 100 percent ownership of Globalfoundries.

- Dylan McGrath
??EE Times





Article Comments - AMD ditches Globalfoundries
Comments:??
*? You can enter [0] more charecters.
*Verify code:
?
?
Webinars

Seminars

Visit Asia Webinars to learn about the latest in technology and get practical design tips.

?
?
Back to Top