AMD to manufacture console APU at GLF

[mrmt]

Inside the usual tap dancing and desperation, at least one important information to investors:

http://www.earningsimpact.com/Trans...edit-Suisse-2013-Technology-Conference/Page/5


I said, we don't disclose where we make the products and in foundry, so I'm not confirming or denying where we make it. But I can tell that in 2014[typo] we will making game consoles products at global.

 

[ShintaiDK]

The WSA still shows its bitter face.

 

[SiliconWars]

As previously mentioned multiple times, AMD has no issues with the WSA. In fact the latest time they've said this was at the same event 2 days, with the words that there "will be no problem meeting the remaining $400 million 2013 WSA". That will be $1.15 billion paid throughout 2013 with no problems.

There are plenty of alternate reasons why AMD would go with GF instead of TSMC.

 

[Ajay]

Inside the usual tap dancing and desperation, at least one important information to investors:

Geez, the wording on that - it's like pulling teeth. Stuff like this doesn't do anything to make investors feel more secure :|

 

[mrmt]

The WSA still shows its bitter face.

Actually it's a good thing. Move to your subpar foundry your subpar embedded products.

The question that nobody asked is whether AMD will be able to keep TSMC as a foundry partner, because as by the last amendment, they have to go subpar-only in the future.

 

[SiliconWars]

Actually it's a good thing. Move to your subpar foundry your subpar embedded products.

Yes clearly subpar, as can be witnessed by all the superior competing products out there. Like um...


...*crickets*

The question that nobody asked is whether AMD will be able to keep TSMC as a foundry partner, because as by the last amendment, they have to go subpar-only in the future.

The reason nobody asked it is because they didn't want to appear absurd by making such a laughably outlandish claim.

 

[Ajay]

Actually it's a good thing. Move to your subpar foundry your subpar embedded products.

The question that nobody asked is whether AMD will be able to keep TSMC as a foundry partner, because as by the last amendment, they have to go subpar-only in the future.

Good point!

And good question. I recall that AMD had to move new products developed on at a different foundry to GF after a certain period of time (which complete sucks for AMD*). I don't think that applies to GPUs or if it only applies to CPU based products.


* Worst deal I've ever seen. IIRC, contracts have to be mutually beneficial to be legal. Since the WSA remains in place it must be mutually beneficial somehow (at least on paper), but I don't see it.

 

[SiliconWars]

* Worst deal I've ever seen. IIRC, contracts have to be mutually beneficial to be legal. Since the WSA remains in place it must be mutually beneficial somehow (at least on paper), but I don't see it.

You can't see how exclusive access to 60K cheap wafers per month is beneficial?

Edit - would be ~40K now since the 2013 WSA.

 

[mrmt]

The reason nobody asked it is because they didn't want to appear absurd by making such a laughably outlandish claim.

That laughable, outlandish claim was made by Devinder Kumar himself last year.

Hell of a job, isn't it. You know, being paid 7 figures to make laughable, outlandish claims to investors around the world... Not bad at all.

 

[SiliconWars]

So Kumar said AMD would no longer be able to fab any chips at TSMC did he?

 

[Phynaz]

As previously mentioned multiple times, AMD has no issues with the WSA.

Is it just you that has mentioned this, or has somebody within the industry said this?

 

[mrmt]

So Kumar said AMD would no longer be able to fab any chips at TSMC did he?

Yes, he did. On the last WSA amendment Q&A. That quote was posted multiples time here, and also the link for the audio of that Q&A.

 

[SiliconWars]

Is it just you that has mentioned this, or has somebody within the industry said this?

http://cc.talkpoint.com/cred001/120313a_jw/?entity=45_6UG3KMJ

20 mins in. Or just look through the transcripts from Q1 to Q3 2013 as they've maintained all year that there will be no problem paying the WSA.

 

[SiliconWars]

Yes, he did. On the last WSA amendment Q&A. That quote was posted multiples time here, and also the link for the audio of that Q&A.

What he said in 2012 was that they were obligated to make all microprocessors at GF, then they went and fabbed Kabini at TSMC. Then the consoles. And obviously graphics. That's not much of an obligation...

Exclusivity Agreement

Unlike the limited waiver of exclusivity in their 2012 WSA, there is no such clause in the 2013 WSA. "We are obligated to make all microprocessor products at GF, and we will do that.", said Devinder Kumar during the call.

I've no idea why you're dragging this up again now but it clearly wasn't the case in 2013. At worst he'll have meant all x86 products, still leaving graphics and any ARM products at TSMC if AMD so chooses.

 

[mrmt]

What he said in 2012 was that they were obligated to make all microprocessors at GF, then they went and fabbed Kabini at TSMC. Then the consoles. And obviously graphics. That's not much of an obligation...

Do you understand that there is 1 year between tape out and launch, and that AMD would have to delay Kabini, Temash and both console APU's in order to backport everything to GLF ghostfet 28nm, don't you?

 

[ElFenix]

* Worst deal I've ever seen. IIRC, contracts have to be mutually beneficial to be legal. Since the WSA remains in place it must be mutually beneficial somehow (at least on paper), but I don't see it.

you'd be wrong about that. especially when it's two large, sophisticated parties doing the deal.

the benefit to AMD was that someone was taking this huge capital intensive enterprise (owning fabs) off their hands and paying AMD a bunch of money. of course abu dhabi wanted a guaranteed customer.

 

[Phynaz]

http://cc.talkpoint.com/cred001/120313a_jw/?entity=45_6UG3KMJ

20 mins in. Or just look through the transcripts from Q1 to Q3 2013 as they've maintained all year that there will be no problem paying the WSA.

Having no problem paying the WSA doesn't mean the WSA isn't a bad thing.

 

[Ajay]

you'd be wrong about that. especially when it's two large, sophisticated parties doing the deal.

the benefit to AMD was that someone was taking this huge capital intensive enterprise (owning fabs) off their hands and paying AMD a bunch of money. of course abu dhabi wanted a guaranteed customer.

Oh, and I forgot this, if AMD finds that the deal isn't beneficial to them for any given quarter, they can pay for privileged of opting out of the wafer deal.

 

[NTMBK]

There were rumours that the XBox One APU was being produced at multiple fabs before launch, just in case one of them had issues with yields. It wouldn't be the first time either. Back when the XBox 360 was being created, the CPU was fabbed in both the IBM fabs and a "backup fab"- Chartered. The IBM fabs hit a snag and had to delay, but Chartered delivered the first silicon a full month before IBM's fabs did, letting the 360 team get to work on debugging real silicon- unlike the PS3 team, who had fabbed the Cell only at IBM's fabs, and had to wait another month before they could start. The 360 was able to make its Christmas 2005 deadline, and the PS3 wasn't.*

It could well be that something similar happened again. Microsoft started running chips at both TSMC and Globalfoundries- but GloFo's 28nm process was badly delayed, as we all know from the endless Kaveri delays. TSMC delivered in time to actually make the Christmas 2013, but Microsoft could still want to run wafers at GlobalFoundries so that they are not dependent on one supplier- and GloFo wafers could well be cheaper than TSMC. (That last part is rampant speculation, I'm not a process guy. )

*The details of this are in Chapter 12 of The Race For A New Game Machine, written by one of the head architects on the PowerPC cores in both the 360 and the PS3. Anyone interested in how a console is actually created should really go read it.

 

[SlowSpyder]

Isn't GloFo handling the console APU's a good thing? I know the WSA terms are not good for AMD, but given that AMD is stuck with the terms for now, isn't giving GloFo that business better than simply paying them a quarterly penalty and still having to pay for the parts from TSMC as well?

 

[SiliconWars]

There is no quarterly penalty, AMD buys wafers from GF every year. They had to pay a penalty in 2012 because the collapse of the PC market meant it was better to pay to get out of their 2012 wafer agreement. That was AMD's decision.

Yes fabbing the consoles at GF is a good thing. GF is cheaper than TSMC, and the dies will be smaller also - that's one reason why the talk was about increased margins. It doesn't really matter in terms of the WSA though because as previously stated, AMD has no problems paying the WSA even without the consoles. In fact they might even need to purchase more wafers from GF in 2014 now.

 

[AtenRa]

Actually it's a good thing. Move to your subpar foundry your subpar embedded products.

It is only natural with your subpar knowledge to make subpar statements. GloFo was first with 32nm before TSMCs 28nm for almost a year. Not only that, but GloFos 32/28nm Gate First is 10-20% cheaper than TSMCs 28nm Gate Last process. But i guess you didnt take that in to consideration as a reason to manufacture the big die Console APUs in to GloFo because it didnt suit your anti-AMD agenda.
Also, AMDs Console APUs are the best and most sophisticated embedded products at the moment. Nobody else, including your beloved Intel, has an embedded product so powerful at the moment and they are not going to make one in the near future.

 

[SlowSpyder]

There is no quarterly penalty, AMD buys wafers from GF every year. They had to pay a penalty in 2012 because the collapse of the PC market meant it was better to pay to get out of their 2012 wafer agreement. That was AMD's decision.

Yes fabbing the consoles at GF is a good thing. GF is cheaper than TSMC, and the dies will be smaller also - that's one reason why the talk was about increased margins. It doesn't really matter in terms of the WSA though because as previously stated, AMD has no problems paying the WSA even without the consoles. In fact they might even need to purchase more wafers from GF in 2014 now.

Ah, thanks for clearing that up. I remember AMD had to take a big hit a year or so ago because that was cheaper than manufacturing the chips that no one would buy. I guess I assumed (maybe read it here?) that there was a minimum amount they had to buy from GloFo.

 

[AtenRa]

Ah, thanks for clearing that up. I remember AMD had to take a big hit a year or so ago because that was cheaper than manufacturing the chips that no one would buy. I guess I assumed (maybe read it here?) that there was a minimum amount they had to buy from GloFo.

There is, and for Q1 2014 it is 250mil US.

 

[mrmt]

Ah, thanks for clearing that up. I remember AMD had to take a big hit a year or so ago because that was cheaper than manufacturing the chips that no one would buy. I guess I assumed (maybe read it here?) that there was a minimum amount they had to buy from GloFo.

They are locked in a take-or-pay contract.