Roulston Technology Partner Timothy Prickett Morgan on AMD Selling Stake in Global Foundries

March 8, 2012

Advanced Micro Devices decided to sell off its remaining 9% stake in GlobalFoundries three years after spinning off the company to reduce manufacturing costs. AMD will continue to outsource chip manufacturing to GlobalFounderies. However, as part of the agreement AMD will pay $425 million over the next two years to waive off an exclusive agreement to manufacturer certain 28 nanometer Fusion APU chips that gives AMD the ability to strike manufacturing deals with other foundries. An unfavorable supply deal and major production issues soured the working relationship between the two companies over the last several years. GlobalFoundries has had troubles in particular with its 32 and now 28 nonometer processes ramps which has hurt AMD’s finances in recent quarters. For example, AMD was not able to get enough Fusion APU parts to satisfy desktop and notebook customers, and the “Interlagos” Opteron 6200 server processors were delayed a few months because of yield issues. AMD can now leverage GlobalFoundries with the threat to dual-source its APUs. Tim Morgan believes that is exactly what they will do stating, “This might prove to be motivation enough to work on yield improvement for both 32 nanometer and 28 nanometer processes. AMD’s GPU partner, Taiwan Semiconductor Manufacturing Corporation, which also makes Nvidia’s GPUs, has 28 nanometer processes on the ramp now and would probably like the extra business.” To read the full article please visit http://www.theregister.co.uk/2012/03/06/amd_rejigs_globalfoundries_deal/

Tim Morgan is the Systems Editor of the UK based Register and is President and Editor in Chief of IT Jungle. He has been keeping a keen eye on the midrange system and server markets for 15 years, and was one of the founding editors of The Four Hundred, the industry’s first subscription-based monthly newsletter devoted exclusively to the IBM AS/400 minicomputer, established in 1989. For the past decade, Prickett Morgan has also performed in-depth market and technical studies on behalf of computer hardware and software vendors that helped them bring their products to the AS/400 market or move them beyond the IBM midrange into the computer market at large.

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