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Globalfoundries has announced it has agreed to terms with Advanced Micro Devices to acquire the remaining stake in Globalfoundries, fulfilling the company's long-term vision of becoming an independent contract maker of semiconductors. AMD and Globalfoundries also signed a new wafer supply agreement, which defines pricing and volumes of chips that GF makes for the chip designer.

The agreement, part of an amendment to the commercial wafer supply agreement (WSA) with AMD, positions Globalfoundries as a pure-play, semiconductor foundry company with AMD as one of its primary and strategic customers. Globalfoundries will now be wholly owned by the Advanced Technology Investment Company (ATIC).

"Today marks the start of a new era for Globalfoundries as it becomes a truly independent foundry. Globalfoundries has a clear vision to be the leading semiconductor foundry partner to AMD and one of the world's top technology companies. We continue to execute on our strategy to propel ATIC's long-term investment philosophy into true value creation for our shareholder and customers," Ajit Manocha, chief executive officer of Globalfoundries.

The acquisition of shares is part of a revised WSA for 2012 between Globalfoundries and AMD aimed at strengthening their strategic business partnership and commitment to delivering leading-edge technology solutions.

"AMD's 32nm processor shipments increased by more than 80% from the third quarter to the fourth quarter and now represents a third of AMD's overall processor mix. In fact, Globalfoundries exited 2011 as the only foundry to have shipped in the hundreds of thousands of 32nm HKMG wafers," added Mr. Manocha.

Globalfoundries waived the exclusivity arrangement for AMD to manufacture certain 28nm APU products at GF for a specified period.  As a result, AMD agreed to pay Globalfoundries a cash payment of $425 million, of which $150 million is being paid on March 5, 2012, $50 million will be paid by July 2, 2012, $50 million by October 2, 2012 and $175 million in the first quarter of 2013.  In addition, AMD issued a promissory note to Globalfoundries for the payments due by October 2, 2012 and first quarter 2013.

AMD expects to record a one-time charge of $703 million in Q1 2012 consisting of the above-mentioned $425 million cash payment and the remainder will be a non-cash charge.

In January, Globalfoundries announced plans for more than $3 billion in capital spending in 2012 to fund expansion of its facilities in Singapore, Germany and New York.  Also in January, the company announced that its newest 300mm manufacturing facility, Fab 8 in New York, started running the first silicon as part of a new customer agreement to develop chips for IBM.

The contract maker of chips achieved several significant milestones in its longstanding partnership with ARM, including the industry's first Cortex-A9 processor operating at more than 2.5GHz on 28nm high-performance technology, and the first 28nm ARM Cortex-A9 processor optimization pack (POP) capable of up to 2GHz on a low-power process geared toward smartphones and other mobile application.

Tags: Globalfoundries, AMD, 32nm, 28nm, Semiconductor, ARM

Discussion

Comments currently: 18
Discussion started: 03/05/12 01:36:05 PM
Latest comment: 03/06/12 07:45:22 PM
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[1-8]

1. 
GloFo will need to deliver now or pay the price - literally.
2 3 [Posted by: beenthere  | Date: 03/05/12 01:36:05 PM]
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2. 
i dont get it amd sells and amd pays
0 0 [Posted by: elkabong  | Date: 03/05/12 02:20:42 PM]
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- collapse thread

 
It's better this way. Probably damn could wrote off these expenses as tax deductible
0 0 [Posted by: OmegaHuman  | Date: 03/05/12 02:34:16 PM]
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3. 
AMD will once again have a new excuse whenever they get delayed on a product release.
2 1 [Posted by: PnoyP  | Date: 03/05/12 02:44:21 PM]
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They will have 2 options TSMC and GF to make chips from its really just putting them in the same boat as everyone else.. ie: Nvidia.

Intel is now the only company that designs and also makes its own products "in house"
0 1 [Posted by: vid_ghost  | Date: 03/05/12 03:09:33 PM]
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IBM and Samsung too.
2 0 [Posted by: tafreire  | Date: 03/05/12 06:16:22 PM]
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Sun/Oricle/Via etc or don't you count theses?
0 1 [Posted by: tedstoy  | Date: 03/05/12 10:15:22 PM]
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from wikipedia "As a fabless semiconductor company, VIA conducts research and development of its chipsets in-house, then subcontracts the actual (silicon) manufacturing to third-party merchant foundries, such as TSMC."

oracle owns sun and I don't even know if they own fabs (I don't think so)
0 0 [Posted by: madooo12  | Date: 03/06/12 12:13:01 AM]
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4. 
show the post
0 3 [Posted by: Azazel  | Date: 03/05/12 09:11:20 PM]
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- collapse thread

 
Amd won't leave server world! It will produce new multi port CPU with risc co processor and more cores - modules. This is going to happen in 2013.
In ARM world they will collaborate with quadcom with new gpus! This way they will fight Intel and Nv on two fronts with minimal expense and risk for them.
Amd naw can manufacture where ever it wants, rumors about IBM are true they will manufacture 17W Trinity apus in 18nm technology.
It's possible that next gen Intel cpus will have resonance mesh bat iz shore that next gen of Amd cpus will be maid with try gate transistors...
0 0 [Posted by: Zola  | Date: 03/06/12 11:47:47 AM]
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5. 
Now why IBM started talking to AMD and contracting chip manufacture starts to make sense.
0 1 [Posted by: tedstoy  | Date: 03/05/12 10:12:56 PM]
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6. 
" fulfilling the company's long-term vision of becoming an independent contract maker of semiconductors."

so AMD actually wanted that, who knows?

but now the guys at abu dhabi fully own a semi-conductor manufacturing company, maybe they'll use it to drill oil or to make some kabsa

0 0 [Posted by: madooo12  | Date: 03/06/12 12:08:45 AM]
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7. 
it is really stupid to sell your own manufacturing fabs to get some money, in the long term it'll cost you more and you'll have to face delays, problems, leaks in the process, besides ATIC is not really interested in developing processes only for AMD.

AMD will be an ordinary customer.
0 0 [Posted by: madooo12  | Date: 03/06/12 12:14:54 AM]
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8. 
It's a fun that ATIC has got Dresden fabs almost for nothing. Yes, for just a mere 120M$.
Look at the AMD-ATIC deal. http://www.extremetech.co...ads/2012/03/GF-Launch.jpg.
AMD had gotten 825M$ (700+125) and now AMD has to payback to GF 703M$.

Now we see the end of the story, the start of which lies back in 2006 with ATI acquisition for unbelievable bulk of money.
0 1 [Posted by: Azazel  | Date: 03/06/12 04:05:33 AM]
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The death of AMD for their absolute lunacy, will now ,now turn to Intel for their cheap ass price CPU's.welcome to the monopoly party
0 0 [Posted by: Urhu  | Date: 03/06/12 05:43:49 AM]
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Who told about the death of AMD? Maybe anybody but me.

Rory is a cleaver guy. He chose the only possible way for AMD surviving. He drops the competition with Intel and AMD will concentrate on production cheap and low power solutions good enough for majority of people. It will look like the reiteration of K5-K6 era.

I hope this path will make AMD profitable. If not, somebody will buyout AMD.
0 1 [Posted by: Azazel  | Date: 03/06/12 09:19:51 AM]
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it's good to see someone supporting AMD

I had really lost hope after reading this news

I really wish AMD stays in the market or makes a new open architecture which is open to anybody to improve, did I mention it should be open

seriously if the 'totally fused' thing AMD plans to make in 2014 isn't dependent on x86 licensing and is open (AMD says it will be), maybe there will be some great improvements in computing then
0 0 [Posted by: madooo12  | Date: 03/06/12 12:07:45 PM]
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It looks that way, Now Intel fan boys will pay less money for the only monoply's CPU, gee wiz.now they are happy no more bashing AMD.
0 0 [Posted by: Urhu  | Date: 03/06/12 07:45:22 PM]
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