AMD Gives Up Its Share In GlobalFoundries 107
MrSeb writes "Three years ago today, AMD spun off its fab division, in a move the company claimed would allow it to more effectively leverage its assets, inject new capital into the foundry side of the business, and make it more competitive vis-à-vis Chipzilla. Today, that dream is dead. AMD announced today that it would give up its 8.8% equity stake in the company. When AMD created GlobalFoundries in 2009, the company held a 34.2% share in the foundry. The main thing that AMD gains from this deal is manufacturing flexibility. Previously, Sunnyvale had agreed to manufacture 28nm APUs solely with GlobalFoundries. This new agreement voids that arrangement, freeing AMD to work with TSMC and other foundries.. It's not an agreement that came cheap, though — not only is AMD giving up its 8.8% equity share of GF, it's agreed to pay the manufacturer some $425 million by the end of Q1 2013. AMD will take a $703M charge against the transaction. It's unclear how this move will pan out. We know AMD killed Krishna/Wichita due to manufacturing problems, Llano limped along for most of 2011, and GF's problems at 32nm impacted AMD's ability to sell 45nm chips into the channel. From a macroeconomic perspective, AMD is simply transferring its business to a foundry partner that's more able to meet its needs. One could argue that AMD's decision to get out of the foundry business is a logical extension of new-CEO Rory Read's plan to de-emphasize cutting-edge silicon in favor of SoCs. Time will tell."
SoCs? (Score:4, Informative)
After some eyebrow knitting, my best guess is "Systems on a Chip"? Eschew obfuscation, expand jargon abbreviations.
Car Analogy Fail (Score:3, Informative)
It's like... Ford decides to spin off its auto business so it isn't tied down to one manufacturer, and can then produce Ford's at Chevy and Dodge and even Honda plants.
Chevy, Dodge and Honda are competitors of Ford, AMD isn't doing this to be able to manufacture chips at a foundry owned by Intel.
Why does it seem like someone decided the AMD brand was more valuable than its product?
Because you don't understand what's happening. This move enables AMD to build chips at any foundry, in fact it means they can use the best foundry rather than being tied to an underperforming one thus resulting in a better product.
Re:Mixed news (Score:2, Informative)
Right now AMD is uncompetative as long as they are behind by one generation. Like for example an A8 is only HALF the performance of an i7.
In case you weren't aware, Amd A8/Llano is on 32nm as is Intel i7/sandybridge. Intel is shortly moving to the 22nm with Ivybridge...
If Amd abandons Global Foundaries, in the same timeframe, they would likely have tape out on TSMC's 28nm** technology.
If Amd is going to wait, maybe they can use TSMC's new 20nm*** technology.
In general, so how is AMD supposed to keep up with Intel when they don't have access bleeding edge new process technology? This isn't just a "right now" problem, this is gonna be a problem for the forseeable future...
Rather AMD needs to build CPU's that cost less than the i7 but offer performance within a narrow band (eg 8%) of Intel parts at the same price, or half the TDP.
I'm sure they'd love to do that, but it doesn't seem to be in the cards. I think the fact they are abandoning GloFo is an admission that they can't compete in the high end server biz w/ GloFo as the fab. GloFo's process-tech-Fu doesn't compete with Intel's...
** TSMC's 28nm process is actually a 32nm node shrink. Since TSMC couldn't get their 32nm process node going, the decided to abandon it and concentrate on the 32nm 1/2 node "shrink" (aka 28nm with High-K metal gates). This is not unlike how TSMC didn't get 45nm working very well and then quickly moved everyone to 40nm 1/2 node process. Not saying this to bash TSMC, but to illustrate how good Intel is in comparsion to the rest of the fabs out there...
*** TSMC decided to pre-announce that they are skip 22nm and 18nm in advance and are rolling out only a 20nm process (I guess the history with 45nm and 32nm basically convinced them to concentrate their efforts on the 1/2 node). Details are slim, although they hinted at it will be Bulk (not Silicon on Insulator or SOI) and Planar (not 3D FinFET) which is less advanced than Intel's 22nm processor (SOI+FinFET).