In a brief Securities and Exchange Commission Form 8-K filing, AMD this afternoon has revealed that it has once again amended its wafer supply agreement with US fab (and AMD fab spin-off) GlobalFoundries. Under the terms of the amended seventh amendment, AMD will see out its existing commitment to use GlobalFoundries through 2024, with the latest amendment setting purchase targets for 2022, 2023, and 2024. Beyond those new targets, however, the agreement releases AMD from all further exclusivity commitments to GlobalFoundries. AMD is now free to use any fab on any process node that it wants.

As a quick refresher, the seventh WSA amendment, which was signed in January of 2019, set terms for the AMD/GlobalFoundries relationship through the end of 2024. Among other things, it set wafer purchase targets for the first three years of the agreement (2019-2021), leaving the last three years to be negotiated at a later time. Meanwhile, that agreement also began the process of decoupling AMD from GlobalFoundries by allowing AMD to utilize other competing fabs for 7nm and smaller, while GlobalFoundries remained AMD’s exclusive provider for chips made on 12nm and larger nodes.

The latest amendment, in turn, essentially finishes what the seventh amendment started. In what AMD/GloFo are calling the “A&R Seventh Amendment”, the updated amendment sets wafer purchase targets for 2022, 2023, and 2024. The full details on these targets are not yet available, however according to the 8-K filing, AMD expects to buy approximately $1.6 billion in wafers from GlobalFoundries in the 2022 to 2024 period.

As with the previous agreement, these targets are binding in both directions. GlobalFoundries is required to allocate a minimum amount of its capacity to orders from AMD, and AMD in turn is required to pay for these wafers, whether they use this capacity or not. For finished wafers, the agreement sets new, undisclosed prices. Meanwhile for any capacity AMD does not use, they will once again be required to pay GlobalFoundries a portion of the difference. GlobalFoundries will be also getting pre-paid for some of these orders in 2022 and 2023, though the 8-K form does not disclose by how much.

Arguably the bigger news here is that, outside of AMD’s minimum wafer purchase requirements over the next three years, the latest amendment otherwise further separates AMD and GlobalFoundries going forward, as it removes all other exclusivity commitments. This leaves AMD free to place orders at any fab on any process node that the company wishes, as opposed to having to use GlobalFoundries for 12nm and beyond.

Now with that said, the net impact of this change is likely to be limited as AMD was already free to pursue other fabs for 7nm and smaller nodes – which will be the vast majority of AMD’s needs over the next three years. But it does underscore how AMD and GlobalFoundries are slowly moving farther apart, as GlobalFoundries has left the race for cutting-edge manufacturing nodes.

It should also be noted that the latest WSA does technically extend the agreement one last(?) time. The previous seventh amendment was set to expire March 31st, 2024. Whereas the new amendment expires on December 31st, 2024. However other than adjusting it to cover the full calendar year, there are no current signs that AMD plans to significantly extend their current agreement with GlobalFoundries. By dropping all exclusivity agreements – and especially in the midst of this chip crunch – it looks like AMD is slowly winding down its dealings with GlobalFoundries for high-performance logic chips.

In the meantime, however, AMD still has three years and $1.6 billion in wafer orders to place at GlobalFoundries. According to a separate statement from AMD, these 12/14nm wafer orders will be used to fulfill orders for trailing-edge logic products, as well as for I/O dies for AMD’s current-generation Ryzen and EPYC CPUs. As with their trailing-edge prodcts, the company will still need to keep producing their current-gen products for a time, even after they’re supplanted with newer technologies. And, given the ongoing chip crunch, having a contractually-guaranteed supply of chips is no doubt a great relief to some executives within AMD.

Still, it’s somewhat difficult to imagine AMD needing over a billion dollars in last-gen logic and I/O dies going into the next three years. In 2019 we remarked that “AMD's needs for such a large node (or GlobalFoundries' other specialized nodes) in the 2022-2024 timeframe are not nearly as obvious” and that remains true to this day. So it will be interesting to see if AMD places enough orders to use all of that capacity, or whether they'll end up leaving some of it on the table.

Finally, GlobalFoundries also sent out a brief statement sharing their thoughts on the newest WSA amendment.

“We have partnered with AMD for more than a decade, playing a key role in accelerating their business, and look forward to extending our partnership for years to come. GF will provide wafers from our Fab 8 Malta, NY, facility, reinforcing both companies’ commitment to manufacturing in the United States.

This agreement gives AMD the support they need to continue their explosive growth in the server and high performance computing markets, and it demonstrates GF’s commitment to redefining the fabless-foundry relationship and helping out customers win their respective market segments”

 

Source: AMD IR

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  • ikjadoon - Thursday, May 13, 2021 - link

    > So we will have to see just what AMD will use the increasingly dated 12/14nm process for over the coming years.

    IIRC, all of AMD’s Chromebook APUs (both Ryzen and Athlon brands) are built on 12nm or 14nm. Maybe they’ll just ship a metric ton of those, as Windows 10X dies a quiet death.

    The volume demand for Chromebooks may eat a little bit into that $1.6 billion, but how cheap are Chromebook APUs to fabricate? $15-20/die?

    All 12nm or 14nm, https://www.amd.com/en/processors/chromebook

    Chromebooks are up 275% YoY, with shipments up from 3+ million to 12 million: https://chromeunboxed.com/chromebook-sales-q1-2021...
    Reply
  • rocketbuddha - Thursday, May 13, 2021 - link

    Will not help. People who have reviewed the Ryzen 3x based chromebooks have found that it is not performing in the level say the equivalent 12nm+ did against the Intel 14nm + competition in the Windows world.
    Looking at how Snapdragon 7c is faltering in Chrome OS vs Mediatek P70, I am inclined to think that Google is more to blame for not optimizing for AMD x64 architecture over Intel's.

    https://chromeunboxed.com/lenovo-thinkpad-c13-yoga...

    <Quote>
    Regular benchmarks probably don’t tell the whole story here since AMD ships with a bit more onboard GPU ability than a comparable Intel chip (until Tiger Lake comes along, anyway), but I felt a bit of slowdown here and there with my standard workflow. Keeping 10-15 windows open across multiple Virtual Desk on dual displays, 10th-gen Intel devices don’t tend to show any signs of slowdown, but I saw it with this AMD 3500C.
    :
    When it comes down to it, you really have to decide if a few things matter to you. Do you like solidly built, feature-rich devices or do you just need a Chromebook that performs well? If performance, battery and screen are all you are after, something like the Acer Chromebook Spin 713 will be faster, have a better screen, and longer battery life for at least a few hundred dollars less.
    <EndQuote>
    Reply
  • bpurkapi - Friday, May 14, 2021 - link

    If you are paying big bux for a chrome book you are doing it wrong. They are not feature rich and are a way to offload old tech and still make some money for hardware companies. They are a commodity at this point.

    Benchmarking chromebooks is a bit silly - "Keeping 10-15 windows open across multiple Virtual Desk on dual displays, 10th-gen Intel devices don’t tend to show any signs of slowdown, but I saw it with this AMD 3500C." I understand wanting to know what they can do but its so out of context with what other devices can do that it really doesn't tell you a ton.

    Also, Chrome Unboxed is not a wonderful reference. I've subbed to them for awhile and it is essentially a chromebook marketing channel at this point.

    Light duty they are great at. I have one that has lasted several years. I love the thing but only use it for specific tasks - access to remote/virtual desktop, a sound input for my stereo, tablet mode when i want to lounge.

    I had the ASUS Eee PC in college which was linux and had similar subpar hardware for the time. It worked good enough. The truth is that chromebooks are wayyyy better than the 200 i paid for that laptop, but that is mostly due to better software and web services.
    Reply
  • rocketbuddha - Saturday, May 15, 2021 - link

    I have three chromebooks. All three are refurbished units
    The first one is a 2018 Acer celeron 15 inch non touch, then Acer Pentium N4200 touch screen convertible and Asus Pentium N4200 touch non convertible. The latter 2 I got in early 2020 due to Virtual Zoom classes for my kids for Covid.
    The highest price I paid was 230$ before taxes.
    Both my kids are comfortable working with them
    I will not pay > 400 for a chromebook.
    Acer one is larger and heavier, but is far better than the Asus whose only advantage is that it has 64GB internal storage compared to 32 GB for Acer.

    These Ryzen powered chromebooks are a joke as far as price is concerned. The Core i3/i5 ones based even on 10th gen Core processors are cheaper and faster than those. If the manufacturers price them below 400$ then definitely they would be good for the money. Tiger lake i3 pummels the 10th gen i5 in benchmarks. Power is no contest. Even in Windows the last generation Surface used a custom processor with the 37xx series and it got totally wholloped by the Core i5 in all but some games due to the Graphics which Intel was always behind. Every person who reviewed that said that AMD Surface 3 makes no sense in any kind of usage. With the new Surface 4 being based on AMD 48xx series it has been a significant improvement in both power and performance.

    Like AMD bought a knife to a gunfight with the 28nm chromebook APUs like 9220c, which got beat by Pentium 4200 in price/power/performance this time also it seems to continue to become irrelevant in the chromebook market.
    Reply
  • clsmithj - Friday, May 14, 2021 - link

    I wanted to see a flood of older GPUs in this GPU dry market. AMD could have been pumping out cards through 2020-2021 had they kept up with GloFo which produced the chips for their Polaris and GCN cards.

    RX 590 (12nm)
    VEGA 64 (14nm)
    VEGA 56 (14nm)
    RX 580 (14nm)
    RX 570 (14nm)
    RX 560 (14nm)
    RX 550 (14nm)
    Reply
  • gijames1225 - Friday, May 14, 2021 - link

    ^^^ This, now would be a decent time to spin up those RX 580 wafers again. Sadly, they could sell for RX 480 launch day prices ($250ish) and both make a killing selling 5 year old tech while also doing gamers a huge solid.

    Newegg has people selling GT 1030 in that price range right now.
    Reply
  • Linustechtips12#6900xt - Friday, May 14, 2021 - link

    would be a great idea for around 250$ like a 590 boosted edition or a 480+++ bassically Reply
  • Hifihedgehog - Monday, May 17, 2021 - link

    Maybe someone could organize a group buy where 1,000,000 people pledge to buy one of the above chips in partnership with the card manufacturers. Maybe a big name like LinusTechTips or something could be the advertiser and that way they help AMD to meet their wafer agreement. Reply
  • Spunjji - Friday, May 14, 2021 - link

    Polaris might make sense for AMD to produce, but Vega really doesn't - the cost of packaging the HBM probably can't be made back vs. the card's likely selling price, even in the current distorted market.

    I am a little surprised they haven't leaned on that more given the current shortage.
    Reply
  • psychobriggsy - Friday, May 14, 2021 - link

    The issue isn't so much silicon as the substrates and packaging material, which would probably affect 12nm silicon as well. But otherwise, I agree. Reply

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