AMD is now officially weapon-free to build future processors and GPUs on 7nm and denser when GlobalFoundries resigns. The company has concluded discussions with foundry partner and former subsidiary GlobalFoundries, and while the plant will continue to supply wafers of 12m and above, AMD will no longer have to pay from here to jump to competing foundries. As you can see, making a wafer in a foundry other than GloFo is actually a double hazard. Simply put, these are obstacles that still bind the company to its past. But all that could change if GlobalFoundries officially comes out of the race and significantly changes the nature of its relationship with AMD. You see, the agreement between the two companies was that GlobalFoundries will continue to produce new process nodes and amD will continue to buy – although the former no longer occurs, the latter can now be modified. One important aspect of the new deal is that if AMD does not meet its annual platelet purchase target for 2019, 2020 and 2021, GlobalFoundries will have to pay “a portion of the difference” between actual platelet purchases and the planned target for this year. While this isn`t exactly a take-or-pay deal AMD made with GlobalFoundries a few years ago, it will still have to use/sell 12LP and 14LPP chips in bulk to avoid paying fees to its partner. However, since AMD doesn`t disclose what platelet volumes are required, it`s unclear how they will affect the company`s product mix in the coming years. In the meantime, it`s worth noting that while the latest WSA change sets out detailed volume and pricing plans through 2021, AMD`s overall agreement with GlobalFoundries still runs through 2024. Over the next few years, AMD and GlobalFoundries will still have to decide how the plant will supply AMD in the final years of the deal.
This will lead to a fascinating situation, to say the least, given GlobalFoundries` recent change in management. At a high level, it`s pretty easy to see how AMD could use more than 12nm of capacity by 2021, but AMD`s need for such a large node (or GlobalFoundries` other specialized node) in the 2022-2024 period isn`t as obvious. This was due to the fact that the foundry business was beginning to suffer compared to an increasingly financially troubled AMD and it made no sense at the time to maintain an R&D-intensive industry. “Our engineering substrates form the basis for the production of high-performance, highly reliable semiconductor devices required by the electronics industry,” said Dr. Bernard Aspar, COO of Soitec. “With our manufacturing facilities in France and Singapore, we have established the world`s largest capacity with the most advanced technical substrates to meet the demands of this growing 5G market. We are very pleased to continue our partnership with GLOBALFOUNDRIES through this multi-year agreement. The end result is that from that point on, AMD has planned all of its major 7nm processors and GPUs currently announced for using TSMC`s 7nm process, and AMD is still free to use Samsung if they wish. In addition, with the latest CES update, AMD will continue to rely heavily on GlobalFoundries for larger nodes, as AMD will remain the long-term strategic provider for 12nm and up. The new agreement sets AMD`s purchase obligations and GlobalFoundries` prices until 2021. “Eight out of ten smartphones in the current market contain silicon manufactured by GLOBALFOUNDRIES and the demand for our differentiated HF solutions continues to grow, as the industry moves to 5G,” said Dr. Bami Bastani, Senior Vice President und General Manager für Mobile and Wireless Infrastructure bei GF.
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