AMD sheds its stake in GlobalFoundries

AMD gets rid of its last manufacturing assets to focus on chip design

Advanced Micro Devices is shedding its remaining manufacturing assets, giving up its stake in foundry company GlobalFoundries and setting the stage to fully focus on chip design.

AMD took initial steps to focus on chip design when it spun off its manufacturing operations to GlobalFoundries, which began operating in 2009. AMD is now divesting its stake of around 9 percent in GlobalFoundries and also paying US$425 million in cash over two fiscal years to the company as part of an amended chip supply agreement.

GlobalFoundries will be fully owned by Advanced Technology Investment Company, which is a part of the Abu Dhabi government's Mubadala Development investment arm. AMD initially retained GlobalFoundries as its exclusive chip supplier after the 2009 spinoff, but the new deal provides the flexibility for AMD to seek other chip makers.

In a separate statement, GlobalFoundries said that acquiring AMD's stake completes a vision of becoming an independent foundry company. GlobalFoundries has factories in the U.S., Germany and Singapore, and is building a plant in Abu Dhabi, which could become operational in a few years.

AMD will take charges of $703 million, including the payment and non-cash charge of $278 million, for the first fiscal quarter of 2012 related to the transfer of its equity stake to GlobalFoundries.

The relationship between AMD and GlobalFoundries has seen bumps, which has affected AMD financially. AMD reduced its revenue projection for the third fiscal quarter of 2011 due to a limited supply of its PC chips related to manufacturing and yield issues on GlobalFoundries' 32-nanometer manufacturing process. AMD is already having low-power PC chips manufactured from GlobalFoundries competitors like Taiwan Semiconductor Manufacturing Co. (TSMC).

The transfer of cash from AMD to GlobalFoundries comes as a result of an amended wafer supply agreement. GlobalFoundries will not remain the exclusive supplier of chips based on the newer 28-nm process for AMD. However, AMD plans to have some chips produced using GlobalFoundries' 28-nm process, said AMD spokesman Drew Prairie, in an e-mail.

"GlobalFoundries has waived the exclusivity arrangement for us to manufacture certain 28-nm APU products at TSMC for a specified period," Prairie said.

AMD's latest PC chips are made using the 32-nm process, but laptop and desktops chips due next year will be made using the 28-nm process. AMD is also taking a new direction on chip design in which it will mix and match third-party intellectual property with its own x86 and graphics processors inside chips.

The companies have set the new terms of pricing under the amended wafer supply deal, under which GlobalFoundries has waived $430 million due from AMD related to chip supplies. The companies have set the wafer price for 2012 and the framework for chip pricing for 2013.

Join the PC World newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Agam Shah

IDG News Service
Show Comments

Essentials

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?