AMD Amends Wafer Supply Agreement With GlobalFoundries

AMD Secures Changes to Wafer Supply Agreement

In their latest Q4 2018 earnings report, AMD provided a number of updates for the company. One of the ongoing issues is the Wafer Supply Agreement with GlobalFoundries. The two firms have a long history between the two of them that stretches back to when the fabs were a part of the firm. As part of the Q4 update, the company has announced an update to the WSA to avoid some penalties for 7nm.

Due to the spin-off of GlobalFoundries, the company no longer had any fabs. To secure a relationship and deal with the fab, the company committed itself to buy chips from them. It also included some penalties if they did not purchase enough chips or they purchased chips from another fab like TSMC. For AMD, the company was able to secure preferential pricing at a point when their finances were not good.

Free to Source 7nm Chips Without Penalties

Now, however, the situation has shifted a lot. GlobalFoundries has abandoned 7nm for now while AMD is moving onto 7nm for GPUs like Radeon VII Vega 2 and Zen 2 CPUs. In order to avoid paying a penalty when buying 7nm chips from say, TSMC, the company had to amend the agreement. Since GlobalFoundries can’t offer 7nm right now, the company was amenable to change. AMD can now go to any fab they want to get 7nm chips.

Moving forward, AMD will continue to get 12nm and above chips such as 14nm chips from GlobalFoundries. This gives AMD the flexibility to get combine supplies from multiple fabs. For instance, the new Zen 2 designs feature a 14nm I/O die and 7nm chiplet. The 14nm part will be supplied by GlobalFoundries while TSMC provides the 7nm part. At least until about 2021, AMD will continue to source chips from GlobalFoundries so chiplet designs will likely stick around.