AMD Does Not See Necessity in Third Foundry Partner

AMD Plans to Stick to Globalfoundries and TSMC

by Anton Shilov
07/20/2012 | 02:26 PM

Advanced Micro Devices does not see any necessity for another source for its products, the third foundry partner. The chip designer believes that given its volumes two suppliers are enough despite of obvious issues that both Globalfoundries and Taiwan Semiconductor Manufacturing Co. ran into in the last eighteen months.


"Today, we have a foundry relationship with two industry leaders in the space. [...] We also said in the past that the number of foundries we can support or can support us is also a function of the overall size the company has. With the size that we have today, it is difficult to see that we could add a third partner," said Thomas Seifert, chief financial officer of AMD, during quarterly conference call with financial analysts.

At present AMD manufactures its central processing units (CPUs) and accelerated processing units (APUs) at Globalfoundries, which last year could not deliver enough chips made using 32nm silicon-on-insulator (SOI) technology with high-k metal gate (HKMG). The company contracts TSMC to make low-end APUs as well as all of its graphics processing units (GPUs), but the recent issues with TSMC's supply of chips manufactured at 28nm nodes have affected many of the industry players this year, even though AMD denies problems with TSMC.

Back in the days, ATI Technologies - which is currently AMD's graphics products group - used to manufacture inexpensive GPUs at United Microelectronics Corp., TSMC's main rival at the time. This helped the company to quickly ramp up new chips to fulfill demands OEMs with the help of two contract makers of semiconductors.

Although UMC is clearly behind TSMC in terms of advanced manufacturing processes nowadays, the company could still make some chips for AMD using previous-generation technologies to boost the volumes and lower the manufacturing costs, provided that there was demand for them. Apparently, the demand for AMD's products nowadays is relatively limited due to macroeconomic reasons as well as massive competition from Intel Corp. and Nvidia Corp., which is why it makes no sense for AMD to have a third foundry partner.