In a short Securities and Exchange Commission Form 8-Okay submitting, AMD this afternoon has revealed that it has as soon as once more amended its wafer provide settlement with US fab (and AMD fab spin-off) GlobalFoundries. Under the phrases of the amended seventh modification, AMD will see out its present dedication to make use of GlobalFoundries by way of 2024, with the most recent modification setting buy targets for 2022, 2023, and 2024. Beyond these new targets, nevertheless, the settlement releases AMD from all additional exclusivity commitments to GlobalFoundries. AMD is now free to make use of any fab on any course of node that it desires.

As a fast refresher, the seventh WSA modification, which was signed in January of 2019, set phrases for the AMD/GlobalFoundries relationship by way of the top of 2024. Among different issues, it set wafer buy targets for the primary three years of the settlement (2019-2021), leaving the final three years to be negotiated at a later time. Meanwhile, that settlement additionally started the method of decoupling AMD from GlobalFoundries by permitting AMD to make the most of different competing fabs for 7nm and smaller, whereas GlobalFoundries remained AMD’s unique supplier for chips made on 12nm and bigger nodes.

The newest modification, in flip, primarily finishes what the seventh modification began. In what AMD/GloFo are calling the “A&R Seventh Amendment”, the up to date modification units wafer buy targets for 2022, 2023, and 2024. The full particulars on these targets will not be but out there, nevertheless in keeping with the 8-Okay submitting, AMD expects to purchase roughly $1.6 billion in wafers from GlobalFoundries within the 2022 to 2024 interval.

As with the earlier settlement, these targets are binding in each instructions. GlobalFoundries is required to allocate a minimal quantity of its capability to orders from AMD, and AMD in flip is required to pay for these wafers, whether or not they use this capability or not. For completed wafers, the settlement units new, undisclosed costs. Meanwhile for any capability AMD doesn’t use, they may as soon as once more be required to pay GlobalFoundries a portion of the distinction. GlobalFoundries will probably be additionally getting pre-paid for a few of these orders in 2022 and 2023, although the 8-Okay type doesn’t disclose by how a lot.

Arguably the larger information right here is that, exterior of AMD’s minimal wafer buy necessities over the following three years, the most recent modification in any other case additional separates AMD and GlobalFoundries going ahead, because it removes all different exclusivity commitments. This leaves AMD free to position orders at any fab on any course of node that the corporate needs, versus having to make use of GlobalFoundries for 12nm and past.

Now with that mentioned, the online impression of this modification is prone to be restricted as AMD was already free to pursue different fabs for 7nm and smaller nodes – which would be the overwhelming majority of AMD’s wants over the following three years. But it does underscore how AMD and GlobalFoundries are slowly transferring farther aside, as GlobalFoundries has left the race for cutting-edge manufacturing nodes.

It also needs to be famous that the most recent WSA does technically lengthen the settlement one final(?) time. The earlier seventh modification was set to run out March 31st, 2024. Whereas the brand new modification expires on December 31st, 2024. However apart from adjusting it to cowl the complete calendar yr, there aren’t any present indicators that AMD plans to considerably lengthen their present settlement with GlobalFoundries. By dropping all exclusivity agreements – and particularly within the midst of this chip crunch – it appears to be like like AMD is slowly winding down its dealings with GlobalFoundries for high-performance logic chips.

In the meantime, nevertheless, AMD nonetheless has three years and $1.6 billion in wafer orders to position at GlobalFoundries. According to a separate assertion from AMD, these 12/14nm wafer orders will probably be used to satisfy orders for trailing-edge logic merchandise, in addition to for I/O dies for AMD’s current-generation Ryzen and EPYC CPUs. As with their trailing-edge prodcts, the corporate will nonetheless must hold producing their current-gen merchandise for a time, even after they’re supplanted with newer applied sciences. And, given the continued chip crunch, having a contractually-guaranteed provide of chips is little doubt an excellent aid to some executives inside AMD.

Still, it’s considerably troublesome to think about AMD needing over a billion {dollars} in last-gen logic and I/O dies going into the following three years. In 2019 we remarked that “AMD’s wants for such a big node (or GlobalFoundries’ different specialised nodes) within the 2022-2024 timeframe will not be almost as apparent” and that continues to be true to this present day. So will probably be fascinating to see if AMD locations sufficient orders to make use of all of that capability, or whether or not they’ll find yourself leaving a few of it on the desk.

Finally, GlobalFoundries additionally despatched out a short assertion sharing their ideas on the most recent WSA modification.

“We have partnered with AMD for greater than a decade, enjoying a key position in accelerating their enterprise, and stay up for extending our partnership for years to come back. GF will present wafers from our Fab 8 Malta, NY, facility, reinforcing each firms’ dedication to manufacturing within the United States.

This settlement provides AMD the help they should proceed their explosive progress within the server and excessive efficiency computing markets, and it demonstrates GF’s dedication to redefining the fabless-foundry relationship and serving to out clients win their respective market segments”

 



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