AMD has announced an amended wafer supply agreement (WSA) with GlobalFoundries, clarifying the relationship the two companies will have through 2024. AMD and GF have been consciously slowly uncoupling from each other for nearly a decade at this point, and while the two firms will continue to work together for the next few years, this latest WSA gives AMD total freedom to explore deals with other manufacturing partners. The new amended document states:
“The A&R Seventh Amendment also removes all prior exclusivity commitments and provides the Company with full flexibility to contract with any wafer foundry with respect to all products manufactured at any technology node.”
When AMD first spun GlobalFoundries off into its own company, the two firms had an ironclad agreement: AMD would tap GF for 28nm and all future nodes, eventually transitioning all of its third-party foundry work over to its partner.
This never really happened. While AMD did build chips like Llano and Bulldozer at GF, AMD’s 28nm Radeon GPUs always stayed at TSMC. AMD had to move its original Krishna and Wichita APUs to the Taiwanese foundry and away from GF (these became Kabini and Temash). As GF struggled to ramp nodes, AMD began to separate itself from the company. At 14nm, GlobalFoundries licensed the Samsung implementation of that node and AMD stuck by its deal. The two companies eventually launched a full range of products on 14nm. GF continues to make the I/O die for all non-APU Ryzen and Epyc CPUs that use one, and handles legacy manufacturing for Radeon and Ryzen 14nm products. If AMD is still building anything from the Bulldozer era, it’ll continue to be built at GlobalFoundries.
Unfortunately, GF decided to pull out of 7nm development and to instead focus on its mature nodes. As a result, AMD negotiated a deal with GlobalFoundries back in 2019, in which AMD would be allowed to move 7nm, 5nm, and 3nm products to TSMC, but it would still be required to use GF for 14nm and above. That aspect of the deal is what has now been rescinded, allowing AMD to partner with any foundry it wants.
AMD has, however, agreed to continue buying a certain minimum volume of product at GlobalFoundries, and believes it will purchase $1.6B worth of wafers from 2022 – 2024. This amount reflects a drawdown of AMD’s previous levels of spending. AMD documents from 2018 show the firm spent $1.6 billion at GF in that year alone.
It’s not clear that AMD has any particular plan to launch trailing edge products at other foundries. This latest change to the WSA effectively completes an unwinding that began years ago, when GlobalFoundries forced AMD to sell its own stake in the company.
GlobalFoundries has announced its own expansion plans this year. The company will spend $1.4 billion to raise output at facilities in the US, Singapore, and Dresden, approximately $350 million at each. The new expansions will come online in 2022 and build chips from 12nm – 90nm. GlobalFoundries did not announce any 22FDX-specific investment as part of these recent capacity increases; its long-delayed 12FDX node is currently expected in 2023 – 2024.
GF has previously stated that it delayed 12FDX due to limited customer demand, and it’s spent the past five years slowly building a more robust toolchain and adding customers for 22FDX instead. There have been rumors that the company might bring its IPO forward this year, and it’s said to be aiming for revenue growth of 9-10 percent over 2020’s $5.7 billion in revenue.
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