AMD plans to purchase $1.6 billion worth of wafers from GlobalFoundries in the 2022 to 2024 timeframe, the chipmaker revealed today (May 13) in an SEC filing.
In the face of global semiconductor shortages and record-high demand, AMD is renegotiating its Wafer Supply Agreement to secure additional capacity. The partners’ previous agreement required both parties to agree to any changes to annual wafer purchase targets and wafer pricing beyond 2021.
The “Amended and Restated Seventh Amendment to the Wafer Supply Agreement” applies to purchases at the 12 nm and 14 nm technology nodes for the period beginning May 12, 2021 and continuing through December 31, 2024.
GlobalFoundries is the supplier for the 14 nm I/O dies that are a part of AMD’s second and third generation Epyc server chips, Rome and Milan. AMD’s disaggregated chiplet approach enables it to use different process nodes in the same package, so while Rome and Milan’s CPU dies are on TSMC’s 7nm CPU process, the I/O dies leverage GloFo’s 14nm process. The ability for I/O die development to be on a different cadence than CPU cores is a major advantage of the chiplet approach.
According to the 8-K filing, GlobalFoundries has agreed to meet a minimum supply threshold for the years 2022, 2023 and 2024. And in return, AMD has agreed to compensate GlobalFoundries to the tune of approximately $1.6 billion for the wafers.
Aside from the server I/O dies, AMD can also use the chips in its “trailing edge CPUs, APUs and GPUs for PCs and things like Chromebooks,” said Patrick Moorhead, principal analyst and founder of Moor Insights & Strategy. “They don’t talk about it a lot, but AMD also does business in the embedded market, which sometimes has a ten-year agreement,” Moorhead told HPCwire. These lagging-generation chips can be used in high-volume embedded devices, such as factory floor robots, and in low-volume but long-tail products like x-ray machines and CT scanners, which don’t change designs very frequently, said Moorhead.
Another analyst Jack E. Gold, president and principal analyst of J.Gold Associates, told HPCwire “14nm is adequate for a good number of functions and that node could power those functions for many generations, so it’s not surprising that AMD would ask GlobalFoundries to continue to process those chips for them. The other major chip companies (e.g., Intel, Nvidia, Qualcomm) also have parts that are not on the latest process nodes.”
The partners have a long history going back to the 2009 spinoff of the chip manufacturing business from AMD. GlobalFoundries was AMD’s primary fab partner through the first-generation of Epyc Naples, fabricated on GlobalFoundries’ 14nm process. AMD planned to stay with the fab for its 7nm parts, but in 2018, GlobalFoundries suddenly dropped its 7nm development program in the face of unfavorable economic conditions, and AMD lined up TSMC as its 7nm supplier.
For some tech-watchers, today’s news raises the question of whether GlobalFoundries might decide to put leading-edge nodes back on its roadmap.
“Given the shortage in processing capability in the market right now, all the chip companies are looking for more capacity to produce chips, and I would not be surprised to see GlobalFoundries get some additional investment to move to a more competitive position in the leading edge of process nodes,” said Gold. “And of course the U.S. and other governments are looking to invest to make US and EU more competitive, so that could help GlobalFoundries (even though the ownership is still mostly Middle Eastern).”
Moorhead said he doesn’t expect GlobalFoundries to get back into leading-edge development. “The die has been cast already,” he said. “I think when it comes to parts that have to be made in the U.S., I think they’re going to be made at IFS (Intel Foundry Services). If they don’t have to do with — I’ll call it — critical infrastructure, it might be done at the TSMC facility in Phoenix. And there is a high likelihood that Samsung in Austin will be making another investment. They used to have a leading edge [in Austin] back when leading edge was 16 nanometer.”
Nearly three weeks ago GlobalFoundries moved its global headquarters from Silicon Valley to Malta, New York, the site of Fab 8, the company’s most advanced semiconductor manufacturing facility.
“The move from GF’s previous headquarters to its state-of-the-art fab in New York is part of the company’s commitment to address the soaring global chip demand, with a focus on semiconductor manufacturing innovation,” the company said.
GlobalFoundries will be providing AMD’s wafers from the Fab 8 facility, thus “reinforcing both companies’ commitment to manufacturing in the United States,” said Laurie Kelly, vice president of global communications, GlobalFoundries, in a statement issued today.
“We have partnered with AMD for more than a decade, playing a key role in accelerating their business, and look forward to extending our partnership for years to come,” said Kelly.