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AMD Businesses Hardware

AMD Gives Up Its Share In GlobalFoundries 107

Posted by Soulskill
from the letting-the-chips-fall-where-they-may dept.
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."
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AMD Gives Up Its Share In GlobalFoundries

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  • by Anonymous Coward

    AMD is dead.

    Long live AMD!

    • by treeves (963993)

      And I discovered that my castles stand
      Upon pillars of salt and pillars of sand [silicon dioxide, that is]

      • by Calos (2281322)

        No wonder GF has yield problems if the chips have pillars of salt, sodium is terrible for MOSFETs.

        Explains a lot, though.

    • AMD is dead...? (Score:2, Interesting)

      by Anonymous Coward

      AMD has been here before. More than once. And somehow has managed to escape oblivion each time.

      AMD is still stuck in the manufacturing mentality of the 1980's where "do whatever it takes no matter what" was the mantra. Their former SDC, aka Fab 23, was full of these people, mostly from MMI, who tended to reject new ways of doing things and using better equipment and practices. They wasted millions on equipment that would be installed, qualified and then promptly destroyed by bad, primitive, caveman maintena

  • Mixed news (Score:5, Insightful)

    by O('_')O_Bush (1162487) on Monday March 05, 2012 @07:48PM (#39255587)
    It was a smart (but expensive) strategic move for chasing the cutting edge, but if their business plan is to leave the cutting edge behind, then I fear we lost one of the biggest drivers of progress. Intel might have the technology, but AMD gives them the incentive to keep running with it.
    • well maybe VIA or Harris will step up and give Intel some competition...
      • by oxdas (2447598)

        It seems like VIA has been more interested in HTC for the time being (they are run by a husband and wife team).

    • Also, I realize Cutting Edge Silicon does not necessarily equal cutting edge, but until there is a technology that allows for a unified memory architecture, I don't see how a SoC will compete wish discrete components (or have incentive to on the cutting edge) that have a reason to be regularly upgraded for reasons other than CPU interaction.
    • What is not cutting edge about TSMC?

      • by Calos (2281322)

        They're a foundry. They make a lot of very different products, and don't design them. This limits their capability to design for manufacturing, and doesn't let them tweak their processes to match the designs. That's the disadvantage of abstraction - they have a good general solution which can easily be matched to many uses, but it will never be as good at a specific use than a solution designed explicitly for that use. They're also just a foundry - they only have to compete with the other foundries, not k

        • Re:Mixed news (Score:5, Interesting)

          by Daniel Phillips (238627) on Monday March 05, 2012 @09:23PM (#39256421)

          AMD isn't giving up design, just the foundary. And in future, Intel must compete with TSMC and friends in process technology, as opposed to their time tested strategy of cutting off AMD's air supply. Makes it more of a game now don't you think?

          • by Calos (2281322)

            No, you misunderstood. Maybe I wasn't clear.

            When you control the design and the manufacture, you have intimate knowledge of both. You can better design for the manufacturing process, and alter the manufacturing process to suit the design. This just isn't possible to the same extent when you work through a foundry. And not only that, there's overwhelming evidence that Intel's process know-how is better than TSMCs. TI don't think it's any coincidence that the prolific microprocessors have all been made by

            • Re:Mixed news (Score:4, Interesting)

              by erice (13380) on Monday March 05, 2012 @11:05PM (#39256933) Homepage

              When you control the design and the manufacture, you have intimate knowledge of both. You can better design for the manufacturing process, and alter the manufacturing process to suit the design. This just isn't possible to the same extent when you work through a foundry

              True, but AMD has not opperated this way since they initially spun off Global Foundaries. Bobcat and Bulldozer were specifically designed to be portable between foundaries and not dependent on special process tweeks. AMD's recent experience with Global Foundaries was the worst of both worlds: limited control and poor execution. Since AMD doesn't have the money to re-enter the fab business, the only viable direction available was to cut the cord and become truly fabless. They might not get any better control but at least they should be able to find a foundary that can execute.

            • governments around the world would be doing more than a few million dollars in a fine (to the government, even), and AMD wouldn't be settling for a couple hundred million or whatever that amount was.

              $1.25 billion. You do not have a clue what you are talking about and come across as an astroturing apologist. That Intel did wrong is not in question.

      • They are a node behind. TSMC just got their 28nm stuff out the door (they decided to skip the 32nm node and do only the 28nm half node). Products using it are on retail shelves, but only as of like a month ago. So where? Intel? Just about to launch 22nm for full retail availability. They are a node ahead, they are almost always a node ahead.

        That would, by definition, make TSMC not cutting edge. If someone else is on newer technology than you, you aren't cutting edge. Not saying that is horrible or anything,

  • SoCs? (Score:4, Informative)

    by Speare (84249) on Monday March 05, 2012 @07:55PM (#39255647) Homepage Journal

    new-CEO Rory Read's plan to de-emphasize cutting-edge silicon in favor of SoCs

    After some eyebrow knitting, my best guess is "Systems on a Chip"? Eschew obfuscation, expand jargon abbreviations.

    • Re: (Score:2, Funny)

      by Anonymous Coward

      Probably better than my guess of "Sucking on Cocks". But then, that seems to be part of his strategy too.

  • seems... weird. (Score:4, Insightful)

    by catmistake (814204) on Monday March 05, 2012 @08:02PM (#39255691) Journal
    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. Why does it seem like someone decided the AMD brand was more valuable than its product? Does this help the consumer in any way to separate brand from product?
    • I have this strange feeling that somebody got a really big bonus near the beginning of that move for the forethought and insight needed to expand the capital base of the combined operations. Now it's time to pay for the error, but that bonus money is already well offshore and out of harms way by now.

    • Yes it does help.
      I think they were stupid for spinning off GF in the first place, but, since they have, sloughing off the rest is a good thing. They now can shop around (within some limits*) for who has the best/most compatible with their design process at a given node. So at 45nM they may use UMC, while at 32 nM they stay with GF and for 22nM they go to TSMC.
      -nB
        *Limits: good luck getting IBM or Intel to fab their chips IMHO.

      • good luck getting IBM or Intel to fab their chips IMHO.

        Intel, sure, but IBM?

        IBMs rather sucessful business strategy seems to be to take money for whatever reason people want to give it to IBM for. I'm pretty sure I've heard of them doing 3rd party fabbing in the past.

        • by Calos (2281322)

          Quick look at IBMs website says they do have foundry services.

          Also, don't forget that IBM heads a consortium of companies working on process technology together... which, last I knew, included both TSMC and GF.

        • by unixisc (2429386)
          Particularly since AMD's chips don't compete head to head w/ POWER7. Maybe Opteron & Bulldozer do, but IBM could easily choose to fab their other chips except those 2.
        • All the "shopping around" in the world doesn't change the fact Intel has better fabs than anyone else. As I pointed out in another post TSMC just got 28nm fully online, retail parts on the market (AMD videocards mostly). That's the 32nm half node, they skipped over the 32nm node for some reason, which lead to delays for them. Ok fair enough but Intel has 22nm up and running full swing, retail availability coming shortly. They are, as usual, a node ahead.

          Now this doesn't happen because the magic faeries like

          • Intel can pour money into process R&D because they have lots of money. It's easy to forget how much bigger Intel is than AMD. Intel spent about $6.5bn on R&D last year. This is more than AMD's total revenue. It is simply not possible for AMD to spend more than about a fifth of what Intel does on R&D. Their sales volumes are also much lower, so they can't amortise the R&D cost over a lot more chips. For every CPU AMD sells, Intel sells four. That means that if Intel spends one dollar p

    • Car Analogy Fail (Score:3, Informative)

      by Anonymous Coward

      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.

      • Because you don't understand what's happening.

        Ya think? Why wouldn't this work for, say, Hardees? Hardees has a horrible franchise... the menu is similar to most of its competitors, but the implementation is crap. So can they just sell off their burger franchises and then use, say, KFC's and Long John Silver's franchises, to achieve better performance at the drive thru and customers' pallet? No... I don't understand business... but this just sounds like slight of hand. I think what really happened is when they "spun off the foundry," AMD ceased to exis

        • I've seen at airports multiple restaurants, including well-known chains and very different price points and styles (sit down vs. fastfood, etc.), that are all using the same kitchen - it's just four different front ends on the same backend.

        • by Volvogga (867092) on Tuesday March 06, 2012 @12:28AM (#39257491)

          Your example of restaurants works. You just don't understand that it works because, as you say, you don't understand business. To be specific, you don't understand the purpose of a business when you see one. I'm guessing Hardees sells fried chicken... assuming they do, the proper analogy here is that you say Hardees owns their own string of chicken farms throughout the USA. Hardees decides that their thing is making food with a specific flavor, not keeping birds alive until they reach the proper weight to be dead birds that are tasty. So they create a new company, and put the chicken farms into that new company's name. Now Hardees has to only focus on applying breading and spice to raw chicken before deep-frying it to a lovely crisp, and can let the new company focus on how much corn to mix into chicken feed to produce the largest, healthiest chickens in the shortest amount of time while still fulfilling their contractual duties to provide so many pounds of chicken meat to Hardees every month.

          Now say that the new chicken farming business isn't doing a good job of raising their chickens... they are too small and kinda chewy. Hardees doesn't want you to buy a chewy bird from them. They may loose you as a customer. So, Hardees says to the new chicken farming company, "you are your own business and are not performing up to our standards, so we shall take our business elsewhere". Hardees starts buying chicken from another chicken farm company. Now you go to Hardees and your neighbor goes to KFC. Guess what? KFC and Hardees both buy their chicken from the same company. You get home and enjoy Gary the Chicken, and your neighbor is enjoying Larry the Chicken, who is Gary's younger brother by 3 minutes.

          You do not go to Hardees to get a specific chicken. You go to get a chicken that is safe, edible, and has a particular flavor that Hardees supplies with their blend of spices and/or choice of frying oil. This is what is happening with AMD right now. You buy a hunk of silicone that conforms to an AMD design, and meets certain standards and quality that AMD is guaranteeing you that the chip will have. Who made that silicone, for the most part, is irrelevant to the customer. That is AMD's problem. If they choose a manufacture that is slow, unreliable, or ships AMD lots of defective products, then AMD will take their business to a manufacture that is more competent or better suits their needs. So basically, AMD has decided that they want to focus on chip design, not both chip design and chip manufacturing.

    • by AvitarX (172628)

      Kind of like how when Mini came back into existence it contracted BMW to make the cars, with BMW staying arms length until it was a huge success and they were purchased by BMW later? It worked for them.

      • by Guy Harris (3803)

        Kind of like how when Mini came back into existence it contracted BMW to make the cars, with BMW staying arms length until it was a huge success and they were purchased by BMW later?

        More like "BMW purchased the Rover Group, descendants of Austin/Morris/Leyland/etc., and makers of the original Mini, and, under BMW's ownership, they introduced the new MINI."

        That might be like Intel buying up AMD and then using the AMD brand name, and perhaps designs, for a new line of Intel x86 processors for markets not served (or not well served) by existing Intel x86's.

        (At this point, the car analogy now sits by the side of the road with its radiator spewing out steam and oil dripping from the engin

        • That might be like Intel buying up AMD and then using the AMD brand name, and perhaps designs, for a new line of Intel x86 processors for markets not served (or not well served) by existing Intel x86's.

          Actually that's exactly what happens quite often in multiple industries. That's how Oldsmobile, Buick, Jeep, and many other car brands became parts of the big auto companies. And Celestial Seasonings, Hidden Valley Ranch salad dressings, Sara Lee, 90% of all alcohol brands, everything Pepsico and Yum Brands sell, and just about every food brand that's been around for more than a few years.

    • by oxdas (2447598)

      "Real men have fabs." -Jerry Sanders, founder AMD.

  • thats expensive, but we must aplause for amd
  • From a macroeconomic perspective? In an article about one company's decisions about inputs and savings? Oh, really?

  • by Beelzebud (1361137) on Monday March 05, 2012 @08:29PM (#39255925)
    I hope they know what they're doing because I for one do not look forward to a PC marketplace dominated by only Intel and Nvidia.
    • by unixisc (2429386)
      If it's CPUs, just Intel - Nvidia doesn't make an equivalent of iCores or Fusions.
    • by Glasswire (302197)

      I hope they know what they're doing because I for one do not look forward to a PC marketplace dominated by only Intel and Nvidia.

      Plus about 10 ARM companies. Intel has a bigger challenge now than AMD has given them for years.

      • The ARM heads love to go on about that but as of yet there are no ARM chips that compete in the desktop space. ARM chips start going out around the level Intel chips start coming in. What's more, they'd face a real uphill battle due to binary compatibility. It is just easier to run a chip that'll run all your old shit unmodified. ARM would have to offer some serious benefits to win people over.

        • The ARM heads love to go on about that but as of yet there are no ARM chips that compete in the desktop space

          In case you haven't been paying attention for the past 5 years, the desktop is a shrinking market. The big growth markets for CPUs are mobile and low power servers. If you want to know how well being the market leader in a shrinking market segment works out in the long run, just ask SGI...

          • by gl4ss (559668)

            shrinking? growth may not have been as big as previously, but I wouldn't call it shrinking.

            but if you had been paying attention yourself, you'd remember reading the armheads comments about arm besting x86 about 5 years ago. and 10 years ago. hell, even on offline magazines 17 years ago. even the same shit about a supercomputer under your desk from cheap cpu's.

            but they're for different markets. and one thing intel has is the fabs and amd doesn't. that's losing a lot.

          • The desktop market hasn't shrunk a bit, it just isn't growing as fast as it was, nor nearly as fast as personal devices like smartphones.

            New computer markets don't tend to kill off old ones. Like mainframes. Not only are they still around and sold, but there are more of them now than when they were the only computers you could get. Desktops out number them by many orders of magnitude but they didn't kill them. Nor did laptops kill desktops nor will smartphones kill laptops (and desktops).

            Turns out that a sm

          • by toddestan (632714)
            In case you haven't noticed, people like running their current software on new hardware they buy. The desktop market isn't going anywhere anytime soon. Why do you think x86 has dominated the last 25 years?
      • by Kjella (173770)

        Plus about 10 ARM companies. Intel has a bigger challenge now than AMD has given them for years.

        Meh, if Intel maintains domination over laptops, desktops, servers and supercomputers they'll have a ton of resources to push into the smartphone/tablet battle. I think they'll find being ten 30-pound kids doesn't match one 300-pound sumo wrestler. The Atom is still basically the same 2008 design which was designed for netbooks/nettops, Medfield and Clover Field this year are just repurposed stop gaps. Silvermont in 2013 is their first real smartphone/tablet design, I suspect it'll be a big wake-up call. In

        • Meh, if Intel maintains domination over laptops, desktops, servers and supercomputers

          That's a big if. Desktops, sure - but they're a shrinking market. Laptops? Well, I have one Intel laptop and one ARM laptop at the moment. The Intel one wins on raw speed, but the ARM one wins on everything else (battery life, cost, and so on). And increasingly laptops are likely to want to use the same chips as smartphones and tablets, which are rapidly growing markets. Servers? They increasingly care about power consumption. The A15 is likely to make big inroads into this market, because you can f

          • by unixisc (2429386)
            Despite all attempts by MS to pretend otherwise, desktops & laptops are still heavily locked on the Wintel platform, something that ARM ain't gonna change. For servers, the situation would be worse for ARM, since you now have in addition to Xeon & Opteron, the various server processors like Sparc, POWER and like you mentioned, MIPS - all of which have far greater performance than ARM does. Supercomputers do depend more on interconnects, but they still like to make do w/ fewer CPUs w/ greater perfo
    • by tlhIngan (30335)

      I hope they know what they're doing because I for one do not look forward to a PC marketplace dominated by only Intel and Nvidia.

      And you won't.

      Because Intel needs AMD just like Microsoft needs Apple. If Intel wanted, they could crush AMD in a heartbeat, but they won't because once AMD dies, Intel's going to get a lot of scrutiny, even if the sole reason AMD died was their CEO did something stupid and it wasn't Intel's fault.

      So AMD keeps the regulators off Intel's back, just like Apple keeps regulators off M

    • by Bryan Ischo (893) *

      The difference between an Intel-only world and an Intel-AMD world would not be very great at this point. x86 development is already a walking corpse and there will not be significant advances in x86 performance ever again, regardless of whether or not AMD is in the market. x86 will only get about 50% faster than the current top of the line i7. The costs to moving the x86 performance bar have become high enough and the x86 market outlook is stagnant at best with mobile devices taking center stage. x86 do

  • I don't know what it makes you if you don't even own SHARES in a fab....

    • by cshark (673578)
      The fab isn't really the important part of the industry anymore. It's the ideas, the product design that's important. Have we not learned anything from our friends at Apple?
      • by unixisc (2429386)

        Unlike AMD, Apple was never a microprocessor manufacturer - not even when they were part of the AIM alliance for PPC. Since they just bought their CPUs from IBM and Motorola, there was no question of them owning their fabs, but they did own their other manufacturing, and still do.

        For Apples A-series processors, the situation is very different, since these are simple designs that most standard foundries can manufacture, w/o elaborate process tweaks that are necessary when making x64s or POWERs or other hi

      • by gl4ss (559668)

        yes, that anyone who buys a design can be a cpu provider.

  • Back when they first announced their foundry spin off, I posted The Following: [slashdot.org]

    1) AMD Spins off Fabs.
    2) Intel/VIA/TMSC/IBM buys AMD Fabs.
    3) Intel/VIA/TMSC/IBM Fabs charges huge price to manufacture AMD CPU's.
    4) AMD CPU Prices skyrocket. Unable to find a cheap reliable FAB, AMD loses price competitive edge.
    5) AMD Stock tanks.
    6) ...
    7) LOSS.

    We are now currently at Step 2. Although I never would have known three years ago that Step 2 would turn out to be "Globalfoundries Buys AMD out of Fabs" but either way, her

    • by oxdas (2447598)

      I thought Global Foundries was owned by the King of Dubai (seriously, they sold it to the government/royal family of Dubai).

  • AMD has seen the writing on the wall: there is very little incentive to spend the money required to further the state of the art in x86. Intel is slowing down its development pace on x86 and AMD is as well; there simply isn't much money in making faster x86 processors because they have already achieved sufficient speed for 95% of what 95% of consumers do with x86 CPUs 95% of the time.

    What would be the point of sinking huge funds into becoming more competitive in a market that is going to become increasingl

  • This story strikes me as more gloomy for Global Foundries. AMD is effectively paying to get out of their stake in the company. Last I knew Global had ST and AMD for major customers only. Now with AMD obviously unhappy with the line yields and slow execution on advanced processing nodes we can only assume that they will at least in the short term be looking to TSMC. If Global is not able to quickly back fill with orders from somewhere else their cost situation is only going to get worse. The only bright poin
    • by unixisc (2429386)
      I know Wiki ain't the last word, but according to them, GF also fabs for Qualcomm and Broadcomm as well.
  • by Anonymous Coward

    The e-350 was a very nice chip. Low power, but I could run vm ware under windows so I could run linux on a vm under win7 and still have 6- 8 hours of battery life in a 3.x lb laptop. AFAIK, atom cpus don't have hardware vm support or 64 bit support. While this summer's intel cpus will probably do better, I needed that last year, not this year. Sure, it'll play old games, but more importantly, it supported vmware, could be light, and had good battery life.

  • I'm not sure how you can be a chip manufacturer without any foundries or production facilities whatsoever, but I think I speak for everyone when I say, "Good luck, AMD!!"
  • Is my understanding of this correct? I think that's a really bad move. When you have to rely on someone else to manufacture your product, only bad things can happen. When it's something as complex as a CPU, the risk shoots up several orders of magnitude.

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