[fellix]

AMD, Globalfoundries Restructure Relationship

Advanced Micro Devices Inc. and the company that manufactures most of its computer chips have restructured their relationship, a deal that will trigger a $703 million charge for AMD and give it more freedom to have some of its products made elsewhere.

The agreement announced late Sunday includes a $425 million payment by AMD to Globalfoundries, a company that includes AMD's former manufacturing operations in Germany. AMD also agreed to give up its remaining 8.8% stake in Globalfoundries.

AMD spun off what became Globalfoundries in 2009, and that company later acquired Singapore's Chartered Semiconductor Manufacturing Ltd. The company's operations in Dresden, Germany, currently make AMD's microprocessor chips, which compete with those sold by Intel Corp. Such chip-manufacturing services are known as foundries.

[3dilettante]

With Seamicro and now this, AMD is taking at face value around billion dollars in charges, with more than half of it being cash.

I'm not sure from the description of the GF deal how much of this goes into the total AMD expects to pay GF this year, or how much of this charge was money AMD was going to pay anyway per the prior wafer agreement.
The money going to the fab is expected to go from 900 million to 1.5 billion.


There's an interesting dynamic with these two events.
Seamicro has a number of former AMD staff that AMD is paying big money to make exclusive use of, while GF has a number of former AMD staff that AMD is paying big money for the priviledge of not making use of.

[Alexko]

Could someone explain to me why AMD is paying to have less of GloFo's stock? I fail to see the logic in that.

[3dilettante]

It looks like they're paying to adjust the wafer agreement in order to change pricing and to allow AMD to not use GF exclusively for some range of APU products at 28nm. Breaking the earlier links apparently came with that price.

There seems to be a lack of clarity as to what each change is for, and this may be partially due to a lack of visibility on what AMD would have been doing if not for this new agreement.

The amount of cash being paid for the gift of not using GF doesn't sound like something to be proud of if you're the fab. Whatever benefit AMD gets from being freed up to use other foundries for its APUs has to overcome a hefty penalty.

Perhaps all of AMD's plans cannot be satisfied by GF's volumes, pricing, yields, or some combination thereof.
It's not clear if the release from certain exclusivity clauses at 28nm means things become close again at 20nm, or the final break was meant to happen then.

At least some irony is in play because AMD is paying to ditch a process whose features were decided upon prior to the spinoff.

edit:
The take-or-pay change in the agreement could also be a sign of a lack of faith in AMD's volumes or ability to pay.
GF is going to offer its services according to some schedule, and AMD can either accept or pay some amount of money.
It would seem better if AMD took up on the offer so it could sell some of those chips, as opposed to not taking them and paying money anyway.

I'm not sure what kind of replacement volumes at 28nm AMD is expecting to get from elsewhere, such that it can turn its nose up at GF's product.
That might mean that it doesn't expect to sell as much, can't afford to pay for full volume, or the price/yield is so askew that it's better to pay a fee and not get something from GF.

[3dilettante]

Instead of editing my edits further, one additional thought is that this agreement is partly the fallout from AMD's cancellation of Krishna and Witchita, whose volumes could have been locked in prior to their cancellation.
Another round of uncertainty is whether the changed wafer agreement is also in reaction to uncertainty in volume for 32nm product, or even the 2013 28nm products like Kaveri, which if they planned at GF would have begun ramping in the latter part of 2012.

As buddy-buddy as PR goes from AMD and GF, it doesn't seem that warm when it comes to actions.

[cal_guy]

Also AMD was going to pay $430 million to GF as a result of GF making the targets in 2011. So going from $430 million to $425 million over two years is a significant gain.

[Davros]

Bug found in amd cpu's
http://permalink.gmane.org/gmane.os....d.kernel/14518

[Alexko]

Originally Posted by Davros

Bug found in amd cpu's
http://permalink.gmane.org/gmane.os....d.kernel/14518

All CPUs have bugs, it's no big deal.

[Davros]

they do ?
I remember the pentium fdiv bug which reulted in replcements
what bugs where there in the core 2 or p4 ? or athlon cpu's ?

[hoho]

Google for "your_CPU_name errata" and find out. There are bugs in all of them. Only question is how serious they are

[pcchen]

Most CPU bugs are relatively minor and in most case can be handled by software. Also, many CPU have "micro-code update" which can correct many types of CPU bugs.

The most serious bugs are those occurred rather frequently and can't be patched via micro-code update or software (at least without serious performance problem). The infamous FDIV bug is one, and another example is, early AMD Phenom CPU have a bug in its TLB which can cause hard lock (though very rarely), so they have to disable TLB in BIOS and OS, which degrades performance.

[Davros]

well you learn something new every day

[swaaye]

AMD Dual Core "Optimizer".

[Sulik]

Except that in this particular case, the bug has no workarounds (other than modifying the compiler to avoid the offending code sequence) and impacts normal execution (the bug is trigger by normal popping register from the stack prior to returning from a subroutine), so it's actually quite nasty, as you can't possibly know if you're going to hit the problem or not unless you recompile all your applications (which isn't possible for most people).

[Albuquerque]

Originally Posted by Davros

well you learn something new every day

Want to bore yourself to death? Check out the epic list of errata for my i7-3930k

[Acert93]

With all these AMD-ATI folks leaving I get the feeling, right or wrong, that the AMD-CPU folks are running the show in a way that is making them jump ship. Which, again as an outsider, seems odd as ATI is the division doing the best, has the best technology, and is the best asset to leverage across multiple markets and could really be a trend setting for the future. Just doesn't seem... right.

Godfrey Cheng is now no longer with AMD.

[Dave Baumann]

Godfrey was working in the CPU division for the past few years.

[Acert93]

Thanks for the clarification Dave.

[Osamar]

There seems to be a migration

http://www.forbes.com/sites/briancau...s-intel-rival/

[CarstenS]

Q1/2012 number are out:
http://phx.corporate-ir.net/phoenix....255&highlight=

AMD has IMO one of the best product stacks in their history plus a competitive advantage in GPU business, yet they made a loss. How?

Originally Posted by AMD

Q1 2012 Results

-- AMD revenue $1.59 billion, 6 percent sequential decrease and a 2
percent decrease year-over-year
-- Net loss $590 million, loss per share $0.80, operating loss $580
million
-- Non-GAAP(1) net income $92 million, earnings per share $0.12,
operating income $138 million
-- Gross margin 2 percent, non-GAAP gross margin 46 percent

Originally Posted by AMD

- Graphics segment revenue was flat sequentially and decreased 7 percent
year-over-year. GPU revenue was up in a seasonally down quarter, due
to higher improved desktop GPU ASP in the channel, offset by
seasonally lower game console royalty revenue. The year-over-year
decrease was primarily driven by lower demand for desktop and mobile
graphics.
-- Operating income was $34 million, compared with $27 million in
Q411 and $19 million in Q111.
-- GPU ASP was flat sequentially and increased year-over-year.
-- AMD reached a major milestone with worldwide availability of its
full line of next generation 28nm AMD Radeon(TM) HD 7000 Series
desktop GPUs in less than three months. In addition to the AMD
Radeon HD 7950 Series GPU, AMD introduced the first graphics card
to break the 1 GHz barrier, the AMD Radeon HD 7770 GPU. AMD also
launched the AMD Radeon HD 7800 Series GPU featuring 2GB of GDDR5
memory for serious gamers.

[UniversalTruth]

Originally Posted by CarstenS

AMD has IMO one of the best product stacks in their history plus a competitive advantage in GPU business, yet they made a loss. How?

It doesn't seem people think in the same way and the proof is:

Graphics segment revenue was flat sequentially and decreased 7 percent
year-over-year.
The year-over-year decrease was primarily driven by lower demand for desktop and mobile
graphics.

Although I agree that their products portfolio is not bad, I think it's simply not good enough either.
How exactly do you expect the company to be growing when their market is shrinking?

[AlphaWolf]

http://finance.yahoo.com/news/amd-be...225004279.html

Originally Posted by AP

SUNNYVALE, Calif. (AP) -- Chipmaker Advanced Micro Devices Inc. said Thursday that it had a net loss in the latest quarter, largely because of an accounting charge related to a revised supply agreement with its primary manufacturer.

http://seekingalpha.com/article/5126...t?source=yahoo

Originally Posted by Rory Read

Our improved execution resulted in better-than-expected revenue of $1.59 billion for the seasonally down first quarter, a 6% sequential decrease and a 2% decrease year-over-year. First quarter non-GAAP income was $92 million. This is a 64% improvement from the year-ago period, which was driven by gross margin improvements resulting from a richer product mix and operational efficiencies.

Basically they beat the analysts estimations for the quarter and posted a net loss because of a $703 million 1 time charge.

[Dave Baumann]

The one-time charge is actually the one that is discussed at the top of this page (post 2001).

And UT, your quote from the press release misses the relevant information:

• Graphics segment revenue was flat sequentially and decreased 7 percent year-over-year. GPU revenue was up in a seasonally down quarter, due to higher improved desktop GPU ASP in the channel, offset by seasonally lower game console royalty revenue. The year-over-year decrease was primarily driven by lower demand for desktop and mobile graphics.

[3dilettante]

Originally Posted by CarstenS

Q1/2012 number are out:
http://phx.corporate-ir.net/phoenix....255&highlight=

AMD has IMO one of the best product stacks in their history plus a competitive advantage in GPU business, yet they made a loss. How?

The big ticket item was AMD taking hundreds of (edit: make that millions not billions) of dollars in charges to not use GF for certain products.
Even if GPUs were doing gangbusters, they still don't amount to much in the grand scheme of things.
Well, maybe it could matter if they had Nvidia's professional market presence and revenue, but they don't.

AMD's APU products range from nice to tepid, depending on the product. Brazos does very well, although it sells in large numbers for a low price.
Larger APUs sell quite a bit of silicon for the lower price ranges, and Llano's manufacturability has only improved from disastrous to not all that good.
AMD's position against Intel in non-APU chips is still that of being a significantly discounted bargain alternative that sells up to twice as much silicon for the same price for at best slightly inferior results.

[Mariner]

Originally Posted by 3dilettante

The big ticket item was AMD taking hundreds of billions of dollars in charges to not use GF for certain products.

Cripes!