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ATIC buys AMD's remaining share in GLOBALFOUNDRIES

by Tarinder Sandhu on 5 March 2012, 16:55

Tags: AMD (NYSE:AMD), GLOBALFOUNDRIES

Quick Link: HEXUS.net/qabdjr

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Processor company AMD streamlined its business by going fabless in 2008. At that time AMD's fabrication plants - factories that are used to manufacture the actual silicon used in CPUs and GPUs - were spun-off to form an interim company called The Foundry. Later becoming known by its current name of GLOBALFOUNDRIES (GF), AMD retained a 44.4 per cent share of the joint business, with the lion's share, 55.6 per cent, controlled by the Advanced Technology Investment Company (ATIC), which remains to this day an investment vehicle for the Abu Dhabi government.

ATIC steadily increased its share in GF to around 90 per cent by the start of 2012. Now, however, ATIC has agreed to purchase AMD's remaining stock, meaning GF is to become a fully-independent manufacturing company with no ties to AMD other than contractual manufacturing obligations penned under a continually-updated wafer supply agreement.

In an excerpt from the press release, Ajit Manocha, GF's CEO, said: "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."

ATIC's complete takeover of GF doesn't mean that AMD's left out in the cold; the two companies will continue to work together, with AMD remaining one of GF's most prominent customers. But one interesting development is that GF waives the exclusivity agreement with AMD for the manufacture of "certain 28nm products at GF for a specified period." Reading between the very large lines, AMD is upping sticks and giving TSMC more business.

As an aside, we know that AMD and GF have had, at times, a tortuous relationship, with AMD pointing the finger at GF for the late arrival of silicon used in its Llano APUs.

The financial consideration of this transaction seems convoluted. GF is waiving a $430m payment obligation from last year's wafer supply agreement, though AMD will pay GF a cash payment of $425m over two fiscal years. Whatever the net result, AMD is now a fully fabless company in every sense of the word.



HEXUS Forums :: 3 Comments

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YES, regardless of the cost over the next two years… it means that AMD can finally let it go and stop losing money in that side! Good news for AMD then, looking like a good year :)
As I've said before, I really, really hope GF steps up to being a very capable and competitive fab but it now gives AMD some much-needed breathing space, to use alternative fabs if necessary to stay competitive.
as an idea - AMD paid GF $209 million for fiscal quater 4, 2011 , which is 50% of the total payoff for the next 2 years