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    AMD Shifts to TSMC as Globalfoundries Ends 7nm Development

    Written by

    Jeffrey Burt
    Published August 29, 2018
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      Globalfoundries officials forced a realignment in the small community of next-generation semiconductor manufacturers when they announced this week that the foundry was pulling back on plans to develop a 7-nanometer process.

      Instead, the company will shift its resources to its 14nm and 12nm processes, which officials said are seeing higher demand from customers. The move leaves a handful of chip manufacturers—essentially (TSMC), Samsung and Intel—still moving in the direction of 7nm.

      It also sent more business to TSMC. Advanced Micro Devices is preparing to build the next generation of its CPUs and GPUs on a 7nm process. At the same time that Globalfoundries officials announced their plans, AMD executives said their next-generation chips will be built by TSMC. That includes the upcoming 7nm GPU, dubbed “Navi,” which will launch later this year, and the 7nm server CPU based on the Zen 2 core that will come next year, according to Mark Papermaster, AMD’s CTO and senior vice president of technology and engineering.

      The company has taped out multiple 7nm products at TSMC, including those two, Papermaster wrote in a post on the company blog.

      “Our work with TSMC on their 7nm node has gone very well and we have seen excellent results from early silicon,” he wrote. “To streamline our development and align our investments closely with each of our foundry partner’s investments, today we are announcing we intend to focus the breadth of our 7nm product portfolio on TSMC’s industry-leading 7nm process.”

      At the same time, AMD will continue working with Globalfoundries’ 14nm and 12nm processes for its Ryzen and Epyc processors and Radeon GPUs, Papermaster wrote. The vendor’s product roadmaps won’t be changed because of the switch from Globalfoundries to TSMC for its 7nm products.

      The move by Globalfoundries won’t have much of an impact on the major chip makers, according to Rob Enderle, principal analyst with The Enderle Group. AMD had been working previously with both Globalfoundries and TSMC, so the shift will be relatively easy.

      However, Globalfoundries dropping the development of its 7nm process will hurt the foundry in the long run, Enderle told eWEEK in an email.

      “The future is always smaller, which means that Globalfoundries’ business, unless they can move to the newer processes, will decline over time,” he said. “While they aren’t in danger short-term, the issue for them is they have effectively showcased a potential end for the company, which will be problematic when it comes to valuations and sustaining revenues over a strategic period. In short, they have effectively announced they are going out of business at some future point because of an inability to evolve. That doesn’t bode well for the firm’s long-term opportunities.”

      It’s also a big deal for the industry, strengthening TSMC’s position, Enderle said.

      “This kind of competitive dynamic is important to the industry because it shifts power and relevance between major players,” he said. “Globalfoundries becomes less important while TSMC is ascending.”

      Globalfoundries was created in 2009 when AMD spun off its manufacturing business in a move that gave the chip maker a much-needed infusion of cash and made it a fabless chip company. The two companies continued a strong working relationship, though AMD did use TSMC for some of its manufacturing needs, including for the custom chips AMD developed for gaming consoles from Microsoft and Sony.

      Globalfoundries has undergone some recent changes, including naming Tom Caufield, who has been with the foundry since 2014, CEO in March. At the time, the company still planned the expensive effort of developing a 7nm process, but in a statement, Caufield said most fabless customers “are looking to get more value out of each technology generation to leverage the substantial investments required to design into each technology node.”

      “Essentially, these nodes are transitioning to design platforms serving multiple waves of applications, giving each node greater longevity,” the CEO said. “This industry dynamic has resulted in fewer fabless clients designing into the outer limits of Moore’s Law. We are shifting our resources and focus by doubling down on our investments in differentiated technologies across our entire portfolio that are most relevant to our clients in growing market segments.”

      Freeing up the money that would have gone into the 7nm efforts will mean more that can be invested in other emerging areas, including 5G, autonomous driving and the internet of things (IoT), he said. The ditching of the 7nm plans also means there will be layoffs, Caufield said.

      AMD’s Papermaster noted that the changes in the IT landscape that convinced Globalfoundries to make its move are the same ones that are fueling AMD’s aggressive 7nm push.

      “The industry is at a significant inflection point as the pace of Moore’s Law slows while the demand for computing and graphics performance continues to grow,” he wrote. “This trend is fueling significant shifts throughout the industry and creating new opportunities for companies that can successfully bring together architectural, packaging, system and software innovations with leading-edge process technologies. That is why at AMD we have invested heavily in our architecture and product roadmaps, while also making the strategic decision to bet big on the 7nm process node.”

      Jeffrey Burt
      Jeffrey Burt

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