GlobalFoundries Puts 7nm ‘On-hold Indefinitely; Spins Off ASIC Division As Subsidiary

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Things are heating up in the semiconductor world. Mobile gadgets will start to ship with 7nm processors this year, as Apple and Huawei will introduce the A12 and Kirin 980 processors. At the computing end, Intel's still chasing its own tail at a time when Santa Clara's competitors continue to close in on its chip lead. Well, Intel won't have to worry about one more semiconductor fab catching up. Jerry Sanders' failed dream-spun off chip fabrication company, GlobalFoundires has announced that it will stop focusing on 7nm node development.

Santa Clara Based GlobalFoundries Announces Plans To Quit Developing 7nm Microprocessor Nodes And Instead Focus On Existing, Well Established Processes

Out of all existing fabs, it's TSMC in the lead with the Taiwanese company already having sourced orders from Apple, and more relevantly, from AMD. AMD's 7nm Zen 2, Vega and EPYC CPUs will be manufactured by TSMC. The company's Chief Technology Officer Mark Papermaster announced the move yesterday, at the same time GlobalFoundries also put out a press release that highlighted its latest strategic change.

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The move marks a final nail in the coffin for AMD's original intention to take Intel head-on with bleeding edge semiconductor design and then, to use external funds after the GlobalFoundry divestiture for the same purpose. AMD founder Jerry Sanders started GloFo originally as AMD's attempt at an in-house chip fabrication project, but the timing of the move wasn't right.

The move to stop 7nm was anticipated ever since GlobalFoundries' current CEO Thomas Caulfield took over in March. The company had already invested into its 12 and 22FDX nodes in February, and these had an actual customer base. 7nm, on the other hand, requires a lot more investment and with AMD having worked closely with TSMC for its products on the process, GlobalFoundries' chances of getting AMD's orders were slim from the very beginning.

GlobalFoundries Also Announces Decision To Spin Off ASIC Division As A Subsidiary; Suspension Of 7nm's Impact On IBM Unclear

If you'll remember, AMD bought out IBM"s foundry manufacturing business a couple of years back and had promised to manufacture all of the latter's server chips. With the fab now suspending 7nm operations, a big question remains about the future of its relationship (and promise) with IBM. To that effect, GlobalFoundries also made a second announcement, that might provide more insight into this matter.

This relates to the company's decision to transform its ASIC business into a subsidiary that will be separate from the fab's mainstream operations. This sounds only a little strange until you take a look at one of the functions of this newly-created subsidiary. According to GlobalFoundries, the ASIC division will, in addition to other things, "provide clients with access to alternative foundry options at 7nm and beyond."

This suggests that at least one of the company's existing customers is affected by its decision to stop 7nm and there's a huge chance that the customer is IBM. After all, IBM's Power11 will require 7nm, although the chip isn't due for more than a year or two. Nevertheless, interesting times. Thoughts? Let us know what you think in the comments section below and stay tuned. We'll keep you updated on the latest.

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