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 current dedication to make use of GlobalFoundries by means 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 means of the tip 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 aren’t but obtainable, 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 are going to as soon as once more be required to pay GlobalFoundries a portion of the distinction. GlobalFoundries shall 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, outdoors 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 web affect of this variation is more likely 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 shifting farther aside, as GlobalFoundries has left the race for cutting-edge manufacturing nodes.
It must also be famous that the most recent WSA does technically prolong 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 aside from adjusting it to cowl the complete calendar yr, there are not any present indicators that AMD plans to considerably prolong their present settlement with GlobalFoundries. By dropping all exclusivity agreements – and particularly within the midst of this chip crunch – it seems to be 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,…
