[Anandtech]: GlobalFoundries Stops All 7nm Development !!

[IEC]

That exact part is censored, but there is no obvious way out for AMD, the only way is mutual termination, or GloFo literally burning to the ground. The only thing that is sure is they are allowed to procure more than the default rate from external sources in an event like this, but it doesn't say they have to pay less fines for it ...

It's quite simple, they will amend it. Failing to do so would give AMD grounds to sue for breach of contract.

7NM OPERATIONAL PLAN
The Parties shall work in a spirit of partnership and good faith to focus resources to assist FoundryCo to develop its 7nm process technology in accordance with its time schedule. AMD shall provide such cooperation as reasonably required to enable FoundryCo to manufacture 7nm products for AMD consistent with AMD’s time schedule for 7nm Products. The details of such cooperation will be mutually agreed and set forth in an operational plan, which plan shall be based on the elements further described in Exhibit A (the “7nm Operational Plan”). The Parties acknowledge that certain elements of the 7nm Operational Plan will be updated from time to time per the Parties’ mutual agreement in order to fulfill the objectives set forth in this Section 8 until the 7nm Operational Plan is complete.

Per the redacted WSA, this is already the *sixth* amendment to it. Expect a seventh.

 

[NostaSeronx]

7LP wasn't cancelled because 12FDX is better.

If there is no demand for 7LP. Then, there is demand for 12FDX. It 1+1=2 level logic here. The two nodes directly competed against each other. Yet, they were manufactured by the same people. The only reason for 12FDX to get demand over 7LP is if it is better in every metric possible.

It was cancelled because GlobalFoundries is quitting the leading edge race and going for more financially viable routes.

GlobalFoundries is not leaving the leading edge race. They are leaving FinFETs which have no customers willing to make the move to 7LP. No money for that single path, why do it. So, they are moving to their nodes which have proven differentiated-ness and profits.

And no, 22FDX isn't anywhere near 7LP either.

22FDX is super close and beyond 7LP. There is a reason why the major massive (>700 mm squared) FPGA makers are going 22FDX over Intel's 10nm, TSMC's 7nm, and GlobalFoundries' 7nm.

 

[zinfamous]

But only after selling 22,000,000 AMD shares on 7/30/18 ... http://ir.amd.com/ownership-summary

Well, they have a time-table for when they are required to sell off certain classes of shares to make good on the most recent WSA/partnership. I think part of this is in the contract with how AMD reduced the debt burden that was @ ~$3 billion as recently as summer 2016, about 20% lower (I believe a certain percentage of Mubadalla's shares were converted from commercial or something like that, and given a time-frame of expiry. Don't quite remember, but something like this happened in 2016 and it confused me a bit).

GloFo and AMD have almost certainly been discussing their agreements wrg to 7nm and what it means for their contracts, and also Mubadalla's 10% ownership stake. It only seems reasonable that when the supplier can no longer provide the required services, that they reduce the size of their ownership stake.

Now, imagine if they had sold off these shares on Monday, at the absolute height of AMD's stock value, then made the announcement at the closing of the markets. Now that would have looked awful, no? ...even if they weren't behind the value and couldn't really control this weird trading cycle, it would have looked very bad.

Mub has been selling down their shares for about 3 years now.

 

[krumme]

Well, they have a time-table for when they are required to sell off certain classes of shares to make good on the most recent WSA/partnership. I think part of this is in the contract with how AMD reduced the debt burden that was @ ~$3 billion as recently as summer 2016, about 20% lower (I believe a certain percentage of Mubadalla's shares were converted from commercial or something like that, and given a time-frame of expiry. Don't quite remember, but something like this happened in 2016 and it confused me a bit).

GloFo and AMD have almost certainly been discussing their agreements wrg to 7nm and what it means for their contracts, and also Mubadalla's 10% ownership stake. It only seems reasonable that when the supplier can no longer provide the required services, that they reduce the size of their ownership stake.

Now, imagine if they had sold off these shares on Monday, at the absolute height of AMD's stock value, then made the announcement at the closing of the markets. Now that would have looked awful, no? ...even if they weren't behind the value and couldn't really control this weird trading cycle, it would have looked very bad.

Mub has been selling down their shares for about 3 years now.

I tend to agree it makes sense too. The mubadala ownership of amd stock only made sense because of the wsa. It was a very good move to make sure they had that ownership as it gave longerterm incentives. Good move from amd back then as it also added much needed cash and lower interest rates. Nice work from Lisa as usual.

Now comes the big wsa fight i assume
That bang was bound to happen but it just comes earlier than anticipated.

Hector basic strategic moves back in the days was right. The execution was wrong. Ati was way to expensive and mubadala was the most bad owner on this earth... Btw also goes to show how bonus and stock options for ceo can mess things up.

 

[piesquared]

The lead TD for 7LP also worked on 12FDX. So, if it was known 7LP would be cancelled by AMD. Then, the 7th amendment WSA will reflect FDSOI only for GlobalFoundries.

If you won't and can't use 7LP, you better give us your money for 12FDX.

I also have this awkward french report from 2017:

So, TSMC is N7 and GlobalFoundries is 12FDX for 2019 for AMD. TSMC will be targeting the high margin premium market with 7nm. GlobalFoundries will be focused for the fast return low margin value market with 12nm SOI.

12LP partnership was 2018 and only Pinnacle Ridge got the treatment. Raven Ridge 2018 is still 14LPP+ like Raven Ridge 2017. The only reason to do that is if Picasso with Dali is 12FDX.

Yes, this makes perfect sense really.
Is there enough demand for 7nm FinFet for GF to spend the huge amount of capital required? Probably not more than what TSMC can produce. It is a hugely expensive node, and if FDSOI provides a much cheaper solution then it makes far more sense to go that route and not have to compete with TSMC, while attracting far more customers than they would on 7FinFet. On top of that, TSMC's node may have outperformed GF's while being earlier to market. So why fight for limited demand with a possibly less capable and later node. If demand is high for FDSOI that was obviously the correct business decision.
It is also great news for AMD. TSMC will have plenty of 7nm supply. The first batch of their 7nm products will be their lower volume and high margin EPYC Rome and Radeon Instinct products. As more volume comes on line they can introduce more products, and they can utilize FDSOI from GF for suitable products.
Having both TSMC and GlobalFoundries develop 7nm never did seem like it could be sustained nby the industry given how expensive it is to produce chips on it. Especially with the realization of FDSOI.

 

[PeterScott]

Now comes the big wsa fight i assume
That bang was bound to happen but it just comes earlier than anticipated.

No. If there was a fight, it was behind closed doors, and was already over before the public announcements were made by both companies. But more likely it was just a discussion, because there was really nothing to fight over.

The WSA almost certainly has a performance clause, and not delivering 7nm at all, will certainly fail it, so AMD would be free to go elsewhere to get it's 7nm wafers.

WSA will likely remain in effect for the ever dwindling 12nm(and larger process) Wafers that AMD still uses, but that is no hardship, so will remain in place as long as AMD keeps using 12nm (and larger) and GF keeps existing.

WSA will likely keep existing, but it's importance is increasingly marginalized as time goes forward.

As far as new CPU/GPU designs, AMD is effectively free.

 

[iBoMbY]

Until there is a 7th Amendment to the WSA you can expect the payments from AMD to GloFo to go up, not down. There is no indication otherwise I can find in the documents, and again: There is no obvious termination clause AMD could use in the published documents.

 

[krumme]

Until there is a 7th Amendment to the WSA you can expect the payments from AMD to GloFo to go up, not down. There is no indication otherwise I can find in the documents, and again: There is no obvious termination clause AMD could use in the published documents.

Agree; No 7nm gf -> more wsa payment. And new amendment will not change that imo.
And we can expect pressure on 7nm wafer prices also longer term. But that goes for all.

But its not that simple. It makes management far more easy going forward for amd. Now this bad relationship with mubadala can be mentally put behind. Gf can be viewed as just another supplier. The cloudy wsa will mean far less in the comming years even if its not terminated. No more strategic mess. No more wasted management time on unproductive work. This should be an opportunity to focus.

What happens to ibm i dont know. They look bad and beaten. Anyone?

 

[del42sa]

https://www.eetimes.com/document.asp?doc_id=1333637

Globalfoundries suspended work on a 7nm node. It will lay off less than 5% of its workforce and make its ASIC group a wholly-owned subsidiary so it can partner with one of the remaining 7nm foundries.

It would have cost GF $2-4 billion to ramp up the 40-50,000 wafers/month capacity needed to have a chance of making a return on the node. “The financial investment didn’t make as much sense as doing something else,” said Tom Caulfield, the former general manager of Fab 8 named chief executive of GF in March.

“The lion’s share of our customers…have no plans for” 7nm chips. Industry-wide demand for the 14/16 node was half the volume of 28nm, and 7nm demand may be half the level of the 14/16nm node, Caulfield said.

“When we look out to 2022, two-thirds of the foundry market will be in nodes at 12nm and above, so it’s not like we are conceding a big part of this market,” he added.

“AMD was hoping GF was a second source, so it could have as many wafers as it needed but now they have to compete with Apple and others for TSMC’s attention.” Given Samsung’s decision to start production by early next year on a 7nm node with EUV steppers “everyone is flocking to TSMC for 7nm, supposedly even Qualcomm,” said Gwennap.

IBM, GF’s other close partner, has more breathing room to find a new foundry for its Power10 processor, not slated to ship until 2020 or later.

 

[NostaSeronx]

What happens to ibm i dont know. They look bad and beaten. Anyone?

They actively participated in STMicroelectronics FDSOI nodes.

14nm FDSOI evolved into 22FDX(+10% over 14nm FDSOI)
14nm FDSOI upgraded evolved into 22FDX+(+10% over 14nm FDSOI upgrade) and 12FDX(>25% over 22FDX+).

This work demonstrates the suitability of FDSOI technology for high performance and energy efficient circuits

---
1-

GF is realigning its leading-edge FinFET roadmap to serve the next wave of clients that will adopt the technology in the coming years.

2-

GF is intensifying investment in areas where it has clear differentiation and adds true value for clients, with an emphasis on delivering feature-rich offerings across its portfolio.

https://www.anandtech.com/show/13277/globalfoundries-stops-all-7nm-development/3
3-

GlobalFoundries will continue to invest in its FDX-branded FD SOI-based platforms, such as 22FDX and 12FDX. Gary Patton did not pre-announce any new versions of the company’s FD-SOI fabrication processes, but clearly indicated that the FDX will remain very important for GlobalFoundries...

https://www.anandtech.com/show/13277/globalfoundries-stops-all-7nm-development/2
----
7nm FinFET is on hold indefinitely, but 7FDX is not since most of the R&D cost of FDSOI is deferred.

The organization(CEA-Leti) recently developed test devices on 10nm FD-SOI technology and produced models for 10nm and 7nm on FD-SOI

10nm/64CPP - Planar - M1/44nm - Std. Cells/Q1’16
7nm/48CPP - Planar - M1/36nm - Std. Cells/Q1’17

From 2015-05-01 to 2017-12-31, closed project
via WAYTOGO FAST

The project represents the first phase of a 2 phase program aiming at establishing a 10nm FDSOI technology for 2018-19.

So, 10nm will be soon and optimized to 7FDX. Which will be relatively easy from 22FDX and 12FDX experience. Or, GlobalFoundries can skip 10nm FDSOI for 7nm FDSOI. Two 7nm FDSOI-derived nodes one optimized for DUV 7FDX(No 7FDX+ EUV) and another for EUV 5FDX(No 5FDX DUV). Keeping it simple, but I am pretty sure Canon Nanotechnologies NZ3C will Bulldoze/Steamroll over ASML's DUV/EUV machines.

CEA Leti is now working with GF on GF's 12FDX development and according to CEO Marie Semeria has 15 researchers stationed at GF's fab in Dresden.

CEA Leti has modeled a 10nm FDSOI process and run test devices that match the modeled results. CEA Leti has also modeled 7nm and because 10nm did not need all of the performance boosters that are available Marie Semeria said she is confident 7nm is possible.

- https://www.semiwiki.com/forum/content/6913-semicon-west-fdsoi-ecosystem.html
Also, WAYTOGO FAST finalized report says 12FDX might utilize some 10nm FDSOI/7nm FDSOI boosts.

 

[zinfamous]

^quite interesting if it all works out that way. From AMD's perspective, the current situation gives them leverage to again renegotiate WSA and possibly back out of most if not all of the fees on their ex-GloFo orders and maybe restructure their debt payment obligations...with the potentially added benefit of returning to GloFo in a few years with some highly-refined Zen cores on an updated 10-7nm node at GloFo, without such restrictions on wafer commitments. If demand is truly high, this would definitely help to alleviate the industry competition for foundry capacity.

Obviously, best case scenario for them and likely fantasy, especially if the Zen design isn't well-suited for that process.

 

[piesquared]

As a consumer i couldn't care less about this WSA. It doesn't affect me why should I care about the financial relationship between AMD and GF.

 

[PeterScott]

^quite interesting if it all works out that way. From AMD's perspective, the current situation gives them leverage to again renegotiate WSA and possibly back out of most if not all of the fees on their ex-GloFo orders and maybe restructure their debt payment obligations...with the potentially added benefit of returning to GloFo in a few years with some highly-refined Zen cores on an updated 10-7nm node at GloFo, without such restrictions on wafer commitments. If demand is truly high, this would definitely help to alleviate the industry competition for foundry capacity.

Obviously, best case scenario for them and likely fantasy, especially if the Zen design isn't well-suited for that process.

Definitely a fantasy. There will never be a 7nm GF node. Once companies throw in the towel on leading edge they never return.

 

[NostaSeronx]

Definitely a fantasy. There will never be a 7nm GF node. Once companies throw in the towel on leading edge they never return.

7nm FinFET* GF node. 7FDX is going strong at GlobalFoundries, some profiles been updated a bit early. I am going to guess 30 months after planned 7LP production start before 7FDX starts.

 

[NTMBK]

Definitely a fantasy. There will never be a 7nm GF node. Once companies throw in the towel on leading edge they never return.

It's kind of scary. Barriers to entry are insanely high, and we're down to three players. Are we going to have a monopoly in leading-edge silicon within the next 5 years?

 

[Topweasel]

That exact part is censored, but there is no obvious way out for AMD, the only way is mutual termination, or GloFo literally burning to the ground. The only thing that is sure is they are allowed to procure more than the default rate from external sources in an event like this, but it doesn't say they have to pay less fines for it ...

Did you read what you typed. Reading a censored document with censoring in exactly the part that would cover this situation. Means that since nothing else in what we can view of the document has covered it that there must not be a way out?

All in the face of GF saying no 7nm and AMD saying they are going all in with 7nm at TSMC. That truth above all truths tells you that there obviously has to be requirements placed on GF's side that aren't being met to allow AMD to do this.

 

[PeterScott]

It's kind of scary. Barriers to entry are insanely high, and we're down to three players. Are we going to have a monopoly in leading-edge silicon within the next 5 years?

Plus Intel is really only a captive foundry for their own parts, when it comes to leading edge.

For most practical purposes we are down to two. Which is already at the point where they can start milking it, by charging higher rates and taking longer time between the process jump.

Definitely scary.

 

[PeterScott]

7nm FinFET* GF node. 7FDX is going strong at GlobalFoundries, some profiles been updated a bit early. I am going to guess 30 months after planned 7LP production start before 7FDX starts.

I see ZERO signs that 7FDX was on GF roadmap in the first place. I have searched their site and there isn't a single mention of 7FDX.

They don't have to publicly cancel something that never existed.

7nm is dead at GF.

 

[iBoMbY]

Did you read what you typed. Reading a censored document with censoring in exactly the part that would cover this situation. Means that since nothing else in what we can view of the document has covered it that there must not be a way out?

That is what you assume is written in the censored part... and how exactly do you assume that? They censored parts that contain business secrets, like exact numbers, but not parts that regulated the termination of the agreement. So I'm 99.9% certain there is nothing in there which allows AMD to terminate the agreement.

 

[wahdangun]

It's kind of scary. Barriers to entry are insanely high, and we're down to three players. Are we going to have a monopoly in leading-edge silicon within the next 5 years?

I'm guessing, intel will be the next one to throw the towel, they are too vertical integrated but without diversified product, like Samsung.

 

[Topweasel]

That is what you assume is written in the censored part... and how exactly do you assume that? They censored parts that contain business secrets, like exact numbers, but not parts that regulated the termination of the agreement. So I'm 99.9% certain there is nothing in there which allows AMD to terminate the agreement.

No I am stating the obvious. That AMD isn't required to maintain wafer purchases in their desire to move to 7nm. We know AMD's financial situation. Paying the fines or suing to get out from under the WSA is not something that they can afford. So either they were released from their requirement or GF was not able to maintain a requirement that AMD placed on them for the agreement and that released them from their purchase requirement (at least as far as 7nm is concerned). That part should be obvious. Because that was pretty much all but confirmed yesterday. Trying to figure out if GF let them out rather than throw money at 7nm or AMD brought up that their desire to forgo 7nm would dissolve their purchase requirement is matter you and others can debate.

I just find it funny "Well the part you are describing is redacted. So since I can't read it I am going to ignore todays (yesterdays) events and proclaim that AMD can't do what they just said they are doing".

 

[Dayman1225]

I see ZERO signs that 7FDX was on GF roadmap in the first place. I have searched their site and there isn't a single mention of 7FDX.

They don't have to publicly cancel something that never existed.

7nm is dead at GF.

7nm FDX doesnt exist and GF just moved 12nm FDX from 2019 to sometime in the future because "22nm FDX is only now ramping"

 

[Spartak]

No, I don't struggle seeing that. The thing is, with most of the industry looking at TSMC, they have finite 7nm fabs. They can't just build a new one quickly to meet demand. Apple isn't paying TSMC to build out more fab space (as Apple doesn't need it and sure doesn't want to subsidize competitors; they just want priority). So everyone will be waiting for Apple to get priority (so they'll already be behind and waiting; yes it helps some in that Apple helps spur development and get things through the early phase where the process isn't as mature so certainly its not all bad, but its not like they can magically make process development go faster or improve either so any problem and these other companies could be looking at an extended delay on when they can start production), and then they will have to try and work deals where they speculate on how much production they need with little room to adjust from there (and now with no GF, TSMC can jack up the price with less competition). And if TSMC itself has issues, they will be limited in what they can do about it unless Samsung is more competitive. And if Apple has a product that is selling hot or they expect it to, they can gobble up more of the capacity for longer time. Heck, if Apple just decides that they want to "compete" by just hogging as much capacity as possible, making it so that other products can't get produced, they could. They have the money to be able to lock up TSMC production and create headaches. So far, Apple hasn't had a reason to do that, so its been mostly fine.

Actually you do or you just wilfully ignore the very strong cyclical nature of Apple sales that frees up production capacity at the start of every year, for say, over ten years now.

 

[teejee]

As a consumer i couldn't care less about this WSA. It doesn't affect me why should I care about the financial relationship between AMD and GF.

Please check the thread title and what site the forum belongs to. This is not a discussion intended for average joe but for tech enthusiast at Anandtech's forum.

 

[Hitman928]

https://www.eetimes.com/document.asp?doc_id=1333637

Meh. If you read between the lines, it's essentially what happened at 28 nm and 14/16 nm. They were way behind schedule with a process that they couldn't get to perform as they hoped so they've given up trying to compete and now will focus on making the most of what they already have. Perhaps it will save the company, perhaps not, but I think within the next few years your going to see a lot more cuts than the 5% they've already announced. It's sad to see all that IBM foundry knowledge / talent get wasted at GF.

They're looking now to sell to the companies who can't afford the latest and greatest and who wait back a generation or two for prices to come down. They're also hoping they can generate enough demand from IoT and similar devices who need efficient digital performance a long with decent analog / RF performance at the same time. We'll see how well their plan works.