Cloud Computing: AMD and Globalfoundries Divorce
March 6, 2012
AMD is giving up what remains of its ownership of its manufacturing plants, turning its 8.8% position over to the Abu Dhabi owners of Globalfoundries.
AMD will keep getting its chips made by Globalfoundries under a new negotiated take-or-pay wafer pricing commitment through 2013 but it doesn’t have to use Globalfoundries exclusively for certain of its anticipated 28nm APUs.
That concession, following serious 32nm yield, ramp and cost overrun problems at Globalfoundries last year, is going to cost AMD $425 million altogether: $150 million Monday, $50 million July 2, another $50 million October 2 and finally $175 million in 1Q13. As a result it’ll take a one-time charge of $703 million this quarter…
Under a renegotiated agreement that lost Globalfoundries money AMD was only paying for each viable 32nm die Globalfoundries produced but that deal reportedly expired January 1. After that it was supposed to start paying for every wafer good or not.
Now it’s looking at paying Globalfoundries $1.5 billion this year, up from $904 million last year, and it can send more work to Taiwan Semiconductor if it likes, likely all of it eventually. TSMC has been making all of AMD’s discrete GPUs.
Separately it’s paying $281 million out-of-pocket for SeaMicro, a further strain on its purse.
Globalfoundries was formed by the government of Abu Dhabi and its Advanced Technology Investment Company (ATIC) in 2009 when it took over the AMD plants pulling AMD’s feet out of the fire. It later added Chartered Semiconductor Manufacturing to Globalfoundries at a cost of $1.8 billion.