Why don't AMD do a Rockchip?

[NTMBK]

Let's face it- Kaveri alone is not going to fulfil AMD's WSA obligations. It's looking like a nice chip, but it's just not going to have enough volume to hit that target. AMD's only other products coming out of GloFo are the 32nm Piledriver FX and Opterons, and those are rapidly dying off with no replacement in sight. So it looks like AMD are going to have to eat another massive WSA payment.

Why are they letting this happen? Global Foundries has the standard menu of ARM IP available to fab on their process. Why don't AMD do what Rockchip do, and just take a load of completely standard ARM IP (Cortex-A12s, Mali GPUs) with no custom elements at all, put together a low-end 28nm tablet SoC as cheaply as they possibly can, and sell it as cheaply as possible? Even if AMD makes zero net profit on a product line like this, it still burns through a big chunk of the WSA obligations and saves it a hefty penalty payment. Hell, AMD could sell the chips at a loss and still have it work out cheaper than WSA payments- there's definitely scope for undercutting the competition.

Seems like a straightforward plan. So why is it not happening?

 

[Ancalagon44]

Does the WSA agreement allow them to fab any kind of chips, or just x86 chips?

I think if they did this without looking to make a profit, they could be accused of dumping in order to artificially lower prices, which could land them in hot water. They also might have to worry about diluting the AMD brand. They might be worried that people will associate AMD with low quality Chinese tablets and phones.

That being said, ARM chips are also used in embedded applications - such as networking switches etc. They could have bid for that business - perhaps even the Nintendo 3DS processor.

They could possibly start a new brand and hope that consumers are not educated as to where these chips are coming from.

 

[lefty2]

AMD has no obligation to GlobalFoundaries. It specifically paid $700 million to get out of that.

 

[Ancalagon44]

AMD has no obligation to GlobalFoundaries. It specifically paid $700 million to get out of that.

The question is, could they have got out of it by actually fabbing chips, and reduced the hit to the wallet?

 

[NTMBK]

Does the WSA agreement allow them to fab any kind of chips, or just x86 chips?

Good question. Does anyone know about this?

I think if they did this without looking to make a profit, they could be accused of dumping in order to artificially lower prices, which could land them in hot water. They also might have to worry about diluting the AMD brand. They might be worried that people will associate AMD with low quality Chinese tablets and phones.

Accusations of dumping could be an issue, I guess. But they could always create a new brand for terrible ARM chips to reduce damage to the AMD name- how about CMD, "Crappy Micro Devices"

 

[lefty2]

The question is, could they have got out of it by actually fabbing chips, and reduced the hit to the wallet?

No, because they were so late with their 28nm process.

 

[NTMBK]

AMD has no obligation to GlobalFoundaries. It specifically paid $700 million to get out of that.

That was for a time limited period. They are still locked into the WSA for many more years.

 

[monstercameron]

Good question. Does anyone know about this?



Accusations of dumping could be an issue, I guess. But they could always create a new brand for terrible ARM chips to reduce damage to the AMD name- how about CMD, "Crappy Micro Devices"

just like via and their sub brand wondermedia
http://www.wondermedia.com.tw/en/index.jsp

 

[lefty2]

That was for a time limited period. They are still locked into the WSA for many more years.

Not true. You actually got that backwards - the agreement that they got out of was time limited.

 

[ShintaiDK]

Not true. You actually got that backwards - the agreement that they got out of was time limited.

Got any link?

 

[NTMBK]

Not true. You actually got that backwards - the agreement that they got out of was time limited.

It's limited until 2024, isn't it?

 

[lefty2]

Got any link?

Here:
http://electroiq.com/blog/2012/03/a...ductor-wafer-agreement-frees-up-28nm-choices/

The new agreement most notably gives AMD "flexibility to manufacture 28nm parts elsewhere," reports FBR Capital Markets. GLOBALFOUNDRIES waived the exclusivity arrangement for AMD to manufacture certain 28nm APU products at GLOBALFOUNDRIES for a specified period.

 

[NTMBK]

Here:
http://electroiq.com/blog/2012/03/a...ductor-wafer-agreement-frees-up-28nm-choices/

That is talking about the exclusivity clause, not the wafer sales agreement. Big difference.

 

[lefty2]

That is talking about the exclusivity clause, not the wafer sales agreement. Big difference.

the wafer sales agreement is only for existing 32nm products

 

[mrmt]

Good question. Does anyone know about this?



Accusations of dumping could be an issue, I guess. But they could always create a new brand for terrible ARM chips to reduce damage to the AMD name- how about CMD, "Crappy Micro Devices"

AMD subpar foundry didn't have a process tuned for LP until this year. Had they resorted to that kind of plan with 32nm SOI they would be the first company to become a laughing stock in two ecosystems. That said, they are going for a vanilla ARM chip in Q4, exactly thr strategy you are proposing here and right on time to deal with the crash due to Broadwell arrival.

Ed: Btw, they tried to manufacture small chips with Globalfoundries: Krishna and Wichita. They know the CMT line is FUBAR and cannot compete against Intel and get the needed WSA volumes.

 

[ShintaiDK]

the wafer sales agreement is only for existing 32nm products

Again link, since you were wrong last time

 

[mrmt]

Here:
http://electroiq.com/blog/2012/03/a...ductor-wafer-agreement-frees-up-28nm-choices/

Globalfoundries didn't give the WSA up, they made an agreement in the beginning of 2012 to allow AMD to manufacture certain chips in another foundry, but the WSA was still in force. This is the result of the 700MM payment you are talking about.

In December 2012 they made another amendment to the WSA where this waiver was killed, meaning that from now on all MPU products from AMD must be manufactured at Globalfoundries. You can check the new WSA here:

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTY0MjcyfENoaWxkSUQ9LTF8VHlwZT0z&t=1

This is AMD own presentation. The part about the waiver being killed was conveniently omitted by AMD management, but it was mentioned in the Q&A by Devinder Kumar.

 

[lefty2]

Globalfoundries didn't give the WSA up, they made an agreement in the beginning of 2012 to allow AMD to manufacture certain chips in another foundry, but the WSA was still in force. This is the result of the 700MM payment you are talking about.

In December 2012 they made another amendment to the WSA where this waiver was killed, meaning that from now on all MPU products from AMD must be manufactured at Globalfoundries. You can check the new WSA here:

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTY0MjcyfENoaWxkSUQ9LTF8VHlwZT0z&t=1

This is AMD own presentation. The part about the waiver being killed was conveniently omitted by AMD management, but it was mentioned in the Q&A by Devinder Kumar.

Yes, the WSA is still in force... for existing products (i.e Richland and chipsets) , but not for future products. There is nothing in that document that says the WSA applies to future products.

 

[mrmt]

Yes, the WSA is still in force... for existing products (i.e Richland and chipsets) , but not for future products. There is nothing in that document that says the WSA applies to future products.

Maybe because it's not a document but a presentation to show what is changing from the previous WSA.

Here's what AMD annual report has to say about the subject:

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTcyOTI0fENoaWxkSUQ9LTF8VHlwZT0z&t=1

A Wafer Supply Agreement (WSA) governs the terms by which we purchase products manufactured by GF. Pursuant to the WSA we are required to purchase all of our microprocessors and APU product requirements from GF, with limited exceptions.

(...)

Plus you have the audio of the Q&A, as quoted by Brightsideofnews:

http://www.brightsideofnews.com/new...gets2c-revises-globalfoundries-agreement.aspx

"We are obligated to make all microprocessor products at GLOBALFOUNDRIES, and we will do that."

(...)

"As part of our prior amendment, we are also committing to make some GPU products at or below [the] 28nm technology node at GLOBALFOUNDRIES."

That was last december, in a Q&A with financial analysts about the last WSA amendment.

Oh, and BTW, they should have mentioned that the exclusivity waiver was killed in that document, but it's AMD, and being honest with its shareholders is the last thing we can expect from that company. And your hypothesis that the WSA exists only for current products is nonsense, or do you think they will manufacture Richlands until 2024?

 

[NTMBK]

AMD subpar foundry didn't have a process tuned for LP until this year. Had they resorted to that kind of plan with 32nm SOI they would be the first company to become a laughing stock in two ecosystems.

There's a reason I brought up Rockchip- they brought out products on 28nm LP, long before Kaveri's launch. Doing what they were doing could have got some wafers out of the door a bit earlier.

That said, they are going for a vanilla ARM chip in Q4, exactly thr strategy you are proposing here and right on time to deal with the crash due to Broadwell arrival.

They aren't making a vanilla ARM chip- they are using vanilla ARM cores, but with Seamicro IP in a totally custom uncore to make it better suited to server workloads. A long way from the totally-vanilla-fire-and-forget tablet part I'm talking about.

Ed: Btw, they tried to manufacture small chips with Globalfoundries: Krishna and Wichita. They know the CMT line is FUBAR and cannot compete against Intel and get the needed WSA volumes.

"FUBAR"? We've not even seen any reliable benchmarks from Kaveri yet, and you're already FUDing.

But yes, Krishna and Wichita were meant to be on 28nm GloFo and got screwed by their slips. This process has been delayed as hell, and being tied to them has seriously messed up AMD. (Not that TSMC's roadmap is looking particularly competitive either.)

 

[Vesku]

Judging from Jaguar product prices AMD could really use GF 28nm LP versions of those chips to compete better on price with low end Intel. They could come out with a single design for that, say a GF version of the A4-5000 or A6-5200 and name it based on what actual performance they get. No idea what has prevented them from doing so, Rockchip having GF 28nm LP product shows it could be done.

 

[mrmt]

There's a reason I brought up Rockchip- they brought out products on 28nm LP, long before Kaveri's launch. Doing what they were doing could have got some wafers out of the door a bit earlier.

Rockchip is a small customer. I doubt that Globalfoundries could have provided, or was sure it could have provided, enough 28nm wafers for AMD in the same time frame of Rockchip otherwise AMD could have just bitten the bullet and postponed jaguar by a quarter and have manufactured in Globalfoundries, and with that, solve the WSA volume issue by two years. The fact that AMD decided to incur in complicated and expensive negotiations with GLF says a lot about the state of GLF 28nm by the time these decisions were being made.

"FUBAR"? We've not even seen any reliable benchmarks from Kaveri yet, and you're already FUDing.

Wanna bet a 12y pure malt scotch bottle that AMD market share in mobile will be smaller in Q414 than in Q413? :whiste:

AMD knows their CMT line is FUBAR. Do you think they would still manufacture it if were not for their WSA commitment?

 

[Vesku]

Rockchip is a small customer. I doubt that Globalfoundries could have provided, or was sure it could have provided, enough 28nm wafers for AMD in the same time frame of Rockchip otherwise AMD could have just bitten the bullet and postponed jaguar by a quarter and have manufactured in Globalfoundries, and with that, solve the WSA volume issue by two years. The fact that AMD decided to incur in complicated and expensive negotiations with GLF says a lot about the state of GLF 28nm by the time these decisions were being made.

If GF can't provide the wafers than that gives AMD more strength in WSA negotiations. So they could design a 28nm LP Kabini and then say "where are our wafers, GF?"

Why this was not done and instead AMD is paying GF to not make chips... Note that the same investment group that controls GF has significant holdings in AMD.

 

[ShintaiDK]

If GF can't provide the wafers than that gives AMD more strength in WSA negotiations. So they could design a 28nm LP Kabini and then say "where are our wafers, GF?"

Why this was not done and instead AMD is paying GF to not make chips... Note that the same investment group that controls GF has significant holdings in AMD.

That investment group have no interest in letting AMD get anything from GloFo. Its a one way deal. AMD only exist to pay for GloFos developments. Thats how the WSA was formed.

 

[mrmt]

If GF can't provide the wafers than that gives AMD more strength in WSA negotiations. So they could design a 28nm LP Kabini and then say "where are our wafers, GF?"

Why this was not done and instead AMD is paying GF to not make chips... Note that the same investment group that controls GF has significant holdings in AMD.

If you read AMD annual report you'll see that the WSA just binds AMD orders to Globalfoundries, but if Globalfoundries slips this is AMD's problem. Globalfoundries is not liable to anything. AMD goes as far as mentioning that if ATIC stops funding GLF, they will have problems and there's nothing they can do about it.

It was not an agreement of equals to strenght their business, but an agreement between a rich fund and an almost bankrupt company to safeguard the former's investment and save the latter's.