Intel’s new CEO Pat Gelsinger has been touring Europe to talk about Intel’s manufacturing plans, even talking to French President Macron and Italian Prime Minister Mario Draghi spend a lot in the EU. However, there may be other offers for the x86 chip maker, as reports suggest that Intel may be looking at AMD's manufacturing arm turned into a "specialized foundry", GlobalFoundries.
According to people familiar with the subject, talking to him Wall Street Journal, Intel is exploring the possibility of a deal to buy GlobalFoundries for $ 30 million in a bid to expand its manufacturing capabilities worldwide.
GlobalFoundries operates six chip makers, four 300mm and two 200mm, and its most cutting-edge process node is the 14/12 nm process. This is a touch behind TSMC, Samsung and Intel, which are developing processes at 7nm or more.
GlobalFoundries once actively developed a 7 nm process node to compete on the blood’s edge with these companies, but decided to stop developing in 2018.
Now this is where things get interesting. Intel could potentially buy a chip company to produce processors used with AMD Ryzen chips.
To better understand the series of events that can lead to this, you must first learn about the fascinating history of GlobalFoundries.
GlobalFoundries first set up its own company following an agreement between AMD and an investment firm linked to the Crown Prince of Abu Dhabi to buy the former’s manufacturing arm. AMD was struggling at the time, thanks to pressure from Intel no less, and its CEO had decided that a fabless approach would save him a lot of money in the long run and would immediately provide a sudden influx of much-needed cash.
According to AMD CEO Hector Ruiz at the time, the deal only came through a dinner with the Ferrari Formula 1 team. But this is a story for again.
The important thing is that GlobalFoundries exists, AMD cannot work from here and both companies sign a wafer supply agreement (WSA) to ensure a harmonious relationship between supplier and customer over the next few years.
Practically, the deal linked AMD to the purchase of most of its chips from GlobalFoundries and would be discouraged by various means from purchasing chips from other sites. Advance GlobalFoundries ’decision to stop the development of 7 nm process nodes and for WSA to start undoing.
One of the major changes to the WSA allowed AMD to acquire chips from other foundries for 7 nm and above, but kept the red equipment leased to GlobalFoundries for 12/14 nm and larger nodes.
At the beginning of this year, AMD was even released from this obligation. AMD can now purchase chips from other foundries as it pleases, although a key stipulation in the WSA says it must buy chips from the factory for at least $ 1.6 million by 2024 or incur a fine to pay and GlobalFoundries.
That’s a lot of chips, but AMD currently uses a chip made by GlobalFoundries on every Zen 2 or newer processor it makes. TSMC manufactures the processing core, or CCD, of AMD's Ryzen and Epyc processors in the 7 nm process, but the I / O array, or cIOD, is still manufactured by GlobalFoundries.
So if the story is short, if Intel could hire a deal to buy GlobalFoundries, it would be responsible for the WSA with which AMD is indebted. Still, it must be said that business operations take years to complete, so even if Intel bought GlobalFoundries, which isn’t a certainty, there probably wouldn’t be much left of AMD’s WSA contract, which effectively puts end to all obligations to GlobalFoundries. in 2024.
So if it's not getting AMD in Intel's pocket, why might Gelsinger be interested in buying GlobalFoundries?
Intel currently produces its own CPUs with its own fabs (mostly, anyway). However, the company intends to go face to face with the world’s largest chip makers, TSMC and Samsung, with its own foundry contract business. I would see this dramatic shake-up taking on offers to produce tokens for other companies, rather than just making their own.
But Intel needs even more factories to do so, hence the push towards the EU and more investment in its global fab network.
Just a problem: "It only takes a couple of years to increase capacity," he said Gelsinger said in May.
One way to expand capacity without building them yourself is to buy other people's stories, and GlobalFoundries certainly seems like a prime candidate for that.