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AMD Gives Up Its Share In GlobalFoundries
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."
AMD is dead.
Long live AMD!
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.
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After some eyebrow knitting, my best guess is "Systems on a Chip"? Eschew obfuscation, expand jargon abbreviations.
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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?
The Admin and the Engineer
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.
Pack it up. AMD is dead.
Tell that do my 4x12 6100s.
Intel is faster per thread on the top end. But, bu the time you have 32/48/64 you're obviously running a parallelizable workload. AMD gives way more bang for the buck.
Speakingof which, they just bought SeaMicro. Apparently they can "cram" 512 atoms or 1024 cores into 10u drawing about 5.5kW.
Well, 5.5Kw will get you 6 1U 4x64 6200 servers, which has 1536 rather faster cores and fits in only 6U, with the same power draw.
I'll bet the SeaMicro box is much, much more expensive too.
Not sure how the SeaMicro numbers add up, TBH.
SJW n. One who posts facts.
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.
Intel is faster per thread on the mid range too. What AMD has is they're cheap.
I'm starting to think GNU is the problem with "GNU/Linux" these days.
Not so much dead, but during times of allocation, they'll find it much tougher to service their regular customers. W/ their own fabs, they at least had a committed capacity that would enable them to service their priority customers. Now that they're totally fabless, fabs like TSMC would be @ liberty to support them only when they have reliable forecasts, but drop them whenever the market is overheated.
After all, AMD's processors are far lower margin than a lot of the other processors that get fabbed from various places. So when there is a market shortage, fabs would prioritize on their high margin chips, and I'll bet that AMD's is not amongst the top there. And if AMD has trouble supporting its top customers, not only will it lose them to Intel, but price would be their only leverage in getting them back.
As for Global Foundries, maybe they could start fabbing FPGAs and other chips from other vendors.
Not anymore. Once you have no dedicated manufacturing capacity of your own, then during times of general market chip shortage, the fabs will go for the higher margin chips, which AMD can't be since they're selling them @ near break-even prices. The only advantage for AMD here is that that during times of inventory glut, they are under no pressure to keep ordering to keep the lines running, but downside even to that is that fabs would give them a lower priority when the market returns.
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 maintenance practices which also had the effect of ruining processes, resulting in drastically low yields and contaminated product that failed early and (not too) often on their customers. They fell short of production goals time and time again. They stopped telling their own employees what the cumulative yield was so that no one would know how bad things really were.
Intel improved their practices and processes from the start and retrained all their "cavemen" and those who could/would not be trained and continued to use clubs to maintain equipment were sacked. Intel, unlike AMD is focused more on quality rather than quantity, which improves yields which, by some magic that AMD has yet to grasp, increases quantity.
There is nothing here that isn't known within the industry. It's just not general public knowledge.
AMD has some excellent products but their manufacturing hasn't been so excellent. If they aren't willing to get rid of the cavemen and strictly enforce quality, then this may be their final act.
6 servers with 4 cpus in each one, with 16 cores per server does not equal 1536 cores, its 384.
You're out by a factor of 4 there. AMD don't produce a 64 core CPU.
You can buy a 64 core system that contains 4 16 core 6200 opterons.
The benefit is that if they can't sell the volume required to justify the cost of upgrading GlobalFoundries to a smaller process they can use someone else who can already do it.
There are many advantages for AMD, they should have done this some time ago. Dedicated founderies with multiple customers can afford to front the billions required to keep on the leading edge of the feature size curve, and can't be mugged by Intel.
Have you got your LWN subscription yet?
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 high end CPUs. Any foundry can make ARM CPUs, which is why Apple can take them to TSMC, Samsung or whoever. Incidentally, I'll predict that Apple will easily get a far more favored customer status from TSMC, particularly during times of allocation, since their margins would be a lot better than what AMD can afford.
As one poster above pointed out, Intel's leadership in the semiconductor sector comes directly from the fact that they alone are a vendor willing to spend top $$$ on their fab R&D. The fabless model is good for startups and low end players who don't have a long term plan to keep growing or retain market share, but if a company is a big player, then owning as much of their supply chain as possible is a good thing, since it puts their costs within their control.
they're not going to prioritize low margin CPUs from AMD.
As opposed to what? Which are the high margin ICs fabbed on the open market?
SJW n. One who posts facts.