[Digitimes] Kaveri delayed

[SiliconWars]

I doubt AMD would be doing much better but they certainly aren't benefiting from becoming fabless since they are still tightly contractually tied to their former fab. A fab which is over a year behind the main alternative for AMD, TSMC.

They would be even further behind if AMD was paying the R&D for the next node, that's the point. 22nm is not coming cheap and is far outside of AMD's ability to pay for.

AMD had to be contractually tied to GF or else they'd have nowhere to fab x86 CPU's. AMD needed to be tied to GF. All they wanted was to get rid of the fab and workers and have somebody else pay the R&D. Now things aren't so rosy you expect them to just walk away from the deal scot-free? GF isn't a charity, they gave AMD what would have been working fine had it not been for the collapse of the PC market.

GF's current 32nm would be the exact same if AMD had completed the node instead. All that stuff was started long before the contracts were signed, so AMD would be stuck forever with their current 32nm, a shrinking couple of $billion in the bank and no ATI.

What would they be fighting Intel's current i3's with had they not bought ATI?

 

[Vesku]

The settlement AMD made with Intel let it be fabless, they didn't need to be owners of GF at that point. Have to wonder about how well the WSA was negotiated for the AMD side of the business when former CEO Ruiz happened to be appointed Chairman of Globalfoundries upon its spin off.

AMD had to finally reveal how much the WSA tied their hands once they started paying out $100s of millions for not receiving product. Then they extended the agreement for a short term reprieve from forced payments. It's quite easy to see why it took them so long to find someone to step in as CEO when the board canned Dirk Meyer. Although given how limp the AMD BoD has appeared from a public perspective I have to wonder if Dirk didn't actually decide to retire himself with no prompting from the BoD. He was neck deep in the Bulldozer development process from its beginnings as a canceled 45nm project and he'd be as well positioned as anyone in the company to see what a train wreck the 32nm launch was going to be.

 

[erunion]

Asus have shown up first FM2+ motherboards which could means that Kaveri isn't delayed and would be released in Q4.

http://www.techpowerup.com/187726/asus-launches-worlds-first-motherboards-for-amd-fm2-apus.html

Launching the chipset but delaying the CPU wouldn't be new for AMD.

 

[SiliconWars]

AMD had to finally reveal how much the WSA tied their hands once they started paying out $100s of millions for not receiving product. Then they extended the agreement for a short term reprieve from forced payments.

That's how the business works. If AMD had booked a years wafers from TSMC, then cancelled them for any reason they'd still have to pay whatever get-out clause was in the contract. You can't expect GF to set aside the wafers for AMD then foot the bill when AMD decides they don't want them.

AMD could have met their wafer obligations and dropped prices of the chips instead, but they opted to save what, $50 million or so instead? And with the drop in wafers they've been able to keep prices of APU's stable.

I just don't get why GF is being made out as the bad guys here when all they've done is stick to the contract and shown a lot of willingness to change it to AMD's benefit.

 

[mrmt]

And it would have been even less had they not bought ATI and instead tried to keep up with Intel in the fab race.

It costs ~$5 billion for a 32nm fab and ~$1 billion for the R&D for it. AMD would have been stuck with their single 32nm fab in Dresden, still paying the wages of 3000 fab guys there and absolutely no chance of progressing further because of being unable to afford the jump to 22nm. Oh, and they wouldn't have ATI or the console wins now.

What you are saying here is that AMD was a doomed company that should have been liquidated well before the ATI acquisition.

What's the point of a company that burns 5.5 billion in an acquisition and end up being worth less than 3 billion combined?

This company has effectively destroyed value and threw away shareholder's money. If AMD's only choice was to acquire ATI or go busy, then it should have gone bust. The shareholders would be better if AMD had closed down the shop and sold all the assets.

 

[mrmt]

That's how the business works. If AMD had booked a years wafers from TSMC, then cancelled them for any reason they'd still have to pay whatever get-out clause was in the contract. You can't expect GF to set aside the wafers for AMD then foot the bill when AMD decides they don't want them.

AMD could have met their wafer obligations and dropped prices of the chips instead, but they opted to save what, $50 million or so instead? And with the drop in wafers they've been able to keep prices of APU's stable.

Who else on the market besides AMD is tied to the foundry partner until 2024?

 

[sm625]

Looking back, what AMD should have done was to simply purchase IP from a company like ATI or PowerVR. Spend their time and money integrating and profiling. They could have dispensed with the north/southbridges 2-3 years sooner, and had an on-die NAND controller like all the smartphone SoC vendors have. By focusing on profiling , they could have made a smaller, faster, more intelligent CPU with higher-than-intel IPC at lower cost. That was what kept them alive for 20+ years. After 2005 they grew too big and too stupid. AMD could have evolved toward GPGPU without even touching ATI. The IP blocks in most GPUs arent worth all that much money.It's mainly the software/firmware that makes them valuable (or worthless). The old AMD would have brought us something more open and cheaper than what we have now. LEt's face it, radeon IGP is jsut ongodly expensive. Even the A6 trinity isnt nearly as cheap as it should be. And it cant be, because they spent way too much money on it.

 

[SiliconWars]

Who else on the market besides AMD is tied to the foundry partner until 2024?

Who else in the market spun off their fabs? How long will Intel be tied to their fabs, paying underutilisation charges? What's the difference?

 

[CHADBOGA]

Who else in the market spun off their fabs? How long will Intel be tied to their fabs, paying underutilisation charges? What's the difference?

AMD has to pay the foundries profit margin, Intel doesn't.

 

[SiliconWars]

What you are saying here is that AMD was a doomed company that should have been liquidated well before the ATI acquisition.

Pretty sure that's nothing like what I said.

What's the point of a company that burns 5.5 billion in an acquisition and end up being worth less than 3 billion combined?

What's the point in a company that sits on 5.5 billion while the other companies in competition with it race ahead? That's what Nvidia is doing, that's why they can't compete with the other ARM guys.

This company has effectively destroyed value and threw away shareholder's money. If AMD's only choice was to acquire ATI or go busy, then it should have gone bust. The shareholders would be better if AMD had closed down the shop and sold all the assets.

AMD is a technology company not a company that exists to make shareholders money. The lack of dividend payments should be enough to keep that kind of investor away, so if anyone was expecting anything more then they should have done their homework a bit better.

 

[SiliconWars]

AMD has to pay the foundries profit margin, Intel doesn't.

Intel has to pay foundry R&D and capex, AMD doesn't. Which of these costs a helluva lot more? Starting to figure it out yet?

 

[ShintaiDK]

Looking back, what AMD should have done was to simply purchase IP from a company like ATI or PowerVR. Spend their time and money integrating and profiling. They could have dispensed with the north/southbridges 2-3 years sooner, and had an on-die NAND controller like all the smartphone SoC vendors have. By focusing on profiling , they could have made a smaller, faster, more intelligent CPU with higher-than-intel IPC at lower cost. That was what kept them alive for 20+ years. After 2005 they grew too big and too stupid. AMD could have evolved toward GPGPU without even touching ATI. The IP blocks in most GPUs arent worth all that much money.It's mainly the software/firmware that makes them valuable (or worthless). The old AMD would have brought us something more open and cheaper than what we have now. LEt's face it, radeon IGP is jsut ongodly expensive. Even the A6 trinity isnt nearly as cheap as it should be. And it cant be, because they spent way too much money on it.

Exactly. There was 100 ways to get GPU tech. And AMD picked the most expensive and destructive one.

 

[mrmt]

Who else in the market spun off their fabs? How long will Intel be tied to their fabs, paying underutilisation charges? What's the difference?

Intel can close down their fabs anytime they want. But you didn't answer my question: who else is tied to its foundry partner until 2024?

 

[monstercameron]

Intel can close down their fabs anytime they want. But you didn't answer my question: who else is tied to its foundry partner until 2024?

not quite following...after they close down their fabs, what competitive edge does Intel have?

 

[ShintaiDK]

Intel has to pay foundry R&D and capex, AMD doesn't. Which of these costs a helluva lot more? Starting to figure it out yet?

TSMCs margins are above 40%. I am sure you can do the rest of the math. Not to mention the pure profit and advantage of having a node advance, soon 2. 100W 246mm2 APUs and 140W 315mm2 FX CPUs vs 84W much better performing 177mm2 HW part with IVR. And utter dominance in the server and mobile segment. When you got a better product, you can also charge more for it.

 

[ShintaiDK]

not quite following...after they close down their fabs, what competitive edge does Intel have?

The uarch is still much, much, much better. Just use SB as an example.

 

[mrmt]

not quite following...after they close down their fabs, what competitive edge does Intel have?

Of course Intel won't sell or close down their factories, but there is nothing legally binding them to not to.

AMD is legally bound to Globalfoundries until 2024.

 

[SiliconWars]

Intel can close down their fabs anytime they want. But you didn't answer my question: who else is tied to its foundry partner until 2024?

Nobody else in the industry has spun off their fabs, therefore you can't compare anyone else's circumstances with AMD's.

You answer me this one. If somebody else came and offered GF more money for fab 1 wafers, what would AMD have done? Taken their business to TSMC, who never has enough capacity to go around as it is? Who else was doing SOI?

AMD needed GF more than GF needed AMD. Do you think GF couldn't sell those wafers elsewhere?

 

[SiliconWars]

AMD is legally bound to Globalfoundries until 2024.

And vs the alternative that was being stuck on 32nm forever, that's a pretty good deal.

The instant that AMD releases a CPU built on GF's 28nm, they'll have done something that was not possible for them to do alone.

 

[CHADBOGA]

Intel has to pay foundry R&D and capex, AMD doesn't. Which of these costs a helluva lot more? Starting to figure it out yet?

AMD is paying a foundry R&D & Capex in the profit margin they have to pay their foundry partner.

As for Intel, they have the volume to make it cheaper for them to be their own foundry.

 

[mrmt]

Nobody else in the industry has spun off their fabs, therefore you can't compare anyone else's circumstances with AMD's.

Why not? We had a lot of factory sales in other industries, and I can't recall any cases where the seller is bound to the acquirer in such draconian terms.

You answer me this one. If somebody else came and offered GF more money for fab 1 wafers, what would AMD have done? Taken their business to TSMC, who never has enough capacity to go around as it is? Who else was doing SOI?

AMD needed GF more than GF needed AMD. Do you think GF couldn't sell those wafers elsewhere?

Tsmc is building an entire factory to fulfill Apple's demand. I can't really see why they couldn't fulfill AMD orders if AMD could ask them. Btw, tsmc fulfills already 40% of AMD shipments + GPU

 

[SiliconWars]

AMD is paying a foundry R&D & Capex in the profit margin they have to pay their foundry partner.

Take a wild guess at what is the cheaper option between paying for wafers or paying for R&D and fab capex (and 3000 workforce) for a company of AMD's size.

As for Intel, they have the volume to make it cheaper for them to be their own foundry.

Exactly. Where is the disagreement?

 

[SiliconWars]

Tsmc is building an entire factory to fulfill Apple's demand. I can't really see why they couldn't fulfill AMD orders if AMD could ask them. Btw, tsmc fulfills already 40% of AMD shipments + GPU

And GF fulfils the other 60%, with the option of far more if AMD wants to take it up if they ever have a part that is going to be in high enough demand. Also comparing Apple to AMD? :whiste:

It was AMD who couldn't meet the original agreement, not GF.

 

[mrmt]

And GF fulfils the other 60%, with the option of far more if AMD wants to take it up if they ever have a part that is going to be in high enough demand. Also comparing Apple to AMD? :whiste:

It was AMD who couldn't meet the original agreement, not GF.

The comparison was just to illustrate that amd does not need globalfoundries. They could outsource their production to ibm or tsmc or simply get better prices at glf, but because of the wsa they are tied to globalfoundries in a way nobody else on the market is.

 

[SiliconWars]

The comparison was just to illustrate that amd does not need globalfoundries. They could outsource their production to ibm or tsmc or simply get better prices at glf, but because of the wsa they are tied to globalfoundries in a way nobody else on the market is.

You don't know what kind of prices AMD is getting at GF. All we know about it is that GF has shown every willingness to amend the WSA when it was beneficial to AMD to do so, and will be amending it again, no doubt to reflect AMD's inability to pay $1.5 billion per year on wafers. I'm pretty sure GF doesn't have to do this, but they are because they realise that AMD is an important partner.

Again, I just don't see how this is a bad deal for AMD, because they can't tear up their contract and act like they never spun off the fabs? What would GF be getting out of that?

TSMC doesn't have any capacity, they never do. Hardly anyone does and it won't be long before Samsung has theirs sold again as well. Wafer starts are at a premium.

AMD made the choice to scale back on production - they could have kept production at maximum and dropped prices but instead they decided to scale back and cut costs. That was their choice - they aren't being held to ransom by GF they are simply paying the agreed cost of cancelling some wafers. Should GF pay for AMD's unwillingness to stick to the agreed wafer starts?