Semiconductor IP News and Trends Blog
Globalfoundries Execution or AMD Divestment?
Is AMD’s move a vote of no confidence in Globalfoundries or the final execution of a competitive long established roadmap that benefits both companies?
Anything that happens to one of the largest IP ecosystem-based semiconductor foundries warrants the industry’s attention. Last week AMD agreed to relinquish its remaining 8 percent holdings in Globalfoundries. This move caused speculation that the IDM lacked confidence in the foundries capabilities to maintain high production yields at the 32nm and 28 nm node processes.
Manufacturing silicon chips at the very lowest process nodes is fraught with challenges. That’s why it is called the bleeding edge of technology, where engineers have to bend the Laws of Physic’s (or at least bend the light) to even draw the atomic size transistors onto the silicon substrates. Even chip giant Intel has had to push out delivery of it’s 28nm products.
Does AMD really lack confidence in Globafoundries capabilities to build today’s smallest silicon chips? Or is there another explanation for the AMD divestment story?
Years ago, AMD’s pre-acquisition goal was to become a stand alone, fabless company. Similarly, Globalfoundries wanted to evolve into a pure-play foundry with no ties to a specific chip vendor. Complete divestment now allowes both companies to achieve these goals and – in theory – become more open and competitive.
Does divestment really represent a parting of the ways? Not according to comments from AMD’s CFO Thomas Seifert at a recent analyst call. When asked by Romit J. Shah of Nomura Securities if AMD would move to another foundry supplier at 28nm, Seifert replied:
“No, that is not really true. If you look at the roadmaps that we have presented at Financial Analyst Day, there is a 28-nanometer successor product to Trinity (successor to Llano) on the roadmap that we will ramp next year, and that is also manufactured at Globalfoundries.”
AMD does have some 28nm products currently in production at TSMC fabs. These are running for a limited time and on a limited scale, mainly the result of pre-existing contracts from ATI – ADM’s graphic arm. Indeed, the Llanor processors or A-Series chips, a mix of both AMD and ATI technology from different fabs, seem to be playing well together.
Perhaps the most important news in last week’s announcement was AMD’S shift from a die-scale agreement back to a multi-year wafer-scale agreement – as in previous years. This shift suggests that AMD acknowledges the “known good die” quality of the 32 – 28nm process node, i.e., that Globalfoundries can deliver competitive wafer-level yields.
Everyone seems a bit jittery as the industry reaches what may be the end of Moore’s Law. But competitiveness in the marketplace seems the best way to determine future winners and losers. AMD’s agreement to relinquish it’s remaining 8 percent holdings in Globalfoundries should free up both companies to compete more fairly in this dynamic marketplace.