AMD’s fabs now on their own: GlobalFoundries

Sunnyvale (CA) – It is official: The new name of AMD’s spun-off manufacturing arm is “GlobalFoundries”. The actual separation of GlobalFoundries and AMD is expected to take several months, but we already noticed reignited enthusiasm among AMD and GlobalFoundries employees, which is something AMD and its manufacturing entity will need to survive in a global market that is challenged by a severe recession.

The name “GlobalFoundries” may be a an exaggeration at this point in time, as the new company owns only one a production site in Dresden, Germany and its new 32 nm fab in Luther Forest (Saratoga County, NY) will not come online for more than a year, in a best case scenario. However, the name may be appropriate when it refers to its customer base: It will serve AMD initially, but plans to offer manufacturing capabilities to other “global customers” customers.   
The spin-off will have interesting implications on AMD, which was rumored to have run into production volume barriers with its fabs in the past and will now have to share those capabilities with others. Previously, those limits have been overcome with contract manufacturers: TSMC and Chartered are certified for SOI CPU production, while UMC can only produce “bulk” chips (GPUs). The new manufacturing company said that it plans to invest about $6 billion to expand its manufacturing capabilities over the next few years (including $4.2 billion allocated to the Luther forest campus.)

In the light of Intel’s recent announcement that it is partnering with TSMC (also an AMD partner) to customize Intel’s Atom processor to broaden the application areas and availability of the chip, AMD indicated that it will be closely working with ARM (Intel’s primary target with Atom), to enable “advanced technology capabilities” to “facilitate the adoption of next-generation consumer electronics.” In that view, the rivalry between AMD and Intel may even be stronger than it has been in the past.

GlobalFoundries said it is proceeding with plans to expand its Dresden, Germany, manufacturing lines by bringing a second 300 mm manufacturing facility with bulk silicon capabilities online in late 2009. The Dresden cluster will be re-named Fab 1 with Module 1 initially focused on production of 45 nm SOI technology, and Module 2 transitioning to 32nm bulk silicon capabilities. The Luther forest fab will be called Fab 2 and is expected to create 1400 new direct jobs and more than 5000 jobs in the region.
GlobalFoundries will start with about 3000 employees, pretty much all of them carried over from AMD. The company will be led by CEO Doug Grose, previously  senior vice president of manufacturing operations at AMD, and chairman Hector Ruiz, previously CEO and chairman of AMD.  In term sof ownership, AMD holds 34.2% of the fabs while investor Advanced Technology Investment Company (ATIC)  holds the remaining 65.8%.