The move comes amid significant changes for AMD, which last week announced it was buying microserver maker and Intel partner SeaMicro.
Advanced Micro Devices has shed the last stakes it had in
Globalfoundries, the chip fabrication company that was created when AMD spun
off its manufacturing business in 2009.
The move, announced March 4, means that while AMD will
continue to contract with Globalfoundries for manufacturing some of its chips,
it can now more fully engage other foundries, such as Taiwan Semiconductor
Manufacturing Co. (TSMC). After spinning off the manufacturing business in
2009, AMD had contracted with Globalfoundries as its exclusive chip
manufacturer. AMD has engaged other chip makers in recent years.
Globalfoundries officials said the company is now fully
independent and fully owned by Advanced Technology Investment Co., which is
owned by the government of Abu Dhabi.
The change comes through an amended wafer supply agreement
between the two companies. Under the amended agreement, AMD will shed its
remaining 9 percent stake in Globalfoundires and pay $425 million in cash over
the next two years. AMD expects to take charges of $703 million in the first
quarter ending its stake in Globalfoundries.
In addition, Globalfoundries agreed to waive $430 million
that AMD was set to pay under the old wafer supply agreement. The two companies
also have set the price for wafers for 2012 and have created a framework for
pricing next year.
Globalfoundries also will no longer be the exclusive maker of
AMDs upcoming 28-nanometer chips. Instead, Globalfoundries will make some of
the chips, with other foundries manufacturing the others.
The amended wafer supply agreement demonstrates that AMD and
Globalfoundries remain committed as long-term strategic business partners, AMD
CEO Rory Read said in a statement. We made significant progress last year to
strengthen our relationship, and were pleased with Globalfoundries recent
performance in meeting our delivery requirements across our product line.
AMD executives in the third quarter of 2011 were forced to
cut their financial forecasts
after problems at Globalfoundries fab in
Dresden, Germany, limited the supplies of AMDs 32nm Llano processors and other
45nm chips. AMD leaned hard on Globalfoundries to fix the issues, and executives have said
over recent months that they have been pleased with the improvements at the
Globalfoundries executives applauded the new agreement with
AMD, saying it adds to the momentum the foundry has built up in recent months.
The company in January announced plans to spend more than $3 billion this year
to expand its facilities in Singapore, New York and Germany. In addition,
Globalfoundries also noted that its new 300mm fab in New York began operations
to develop new chips for IBM, and that it is continuing to grow its partnership
with ARM Holdings.
marks the start of a new era for Globalfoundries as it becomes a truly
independent foundry," CEO Ajit Manocha said in a statement. "Globalfoundries
has a clear vision to be the leading semiconductor foundry partner to AMD and
one of the world's top technology companies."
Read has aggressively reshaped the company since becoming CEO last year. In the
latest move, AMD announced on Feb. 29 plans to buy microserver maker SeaMicro
for $334 million. The move not only enables AMD to become a larger player in the burgeoning
market for high-performance, low-power servers for the Web and cloud markets,
but also dealt a blow to larger rival Intel.
built its business using Intels Atom chips to power their highly efficient
systems, and in January announced its new SM10000-XE server
, which runs on
Intels Xeon X3-1260L processors. AMD is expected to quickly begin transitioning the SeaMicro servers to its own