That's a bit surprising (if not ironic) but I think it may make sense in a way. It's been pretty clear that Mudabala (an Abu Dhabi fund that bought AMD fabs in 2008 which then became GlobalFoundries) wanted to unload that investment after they stopped shoving money into failed process developments (GloFo licensed their 14nm from Samsung as a reminder after their own 14 failed, and their 7nm failed too), so no surprise on their end.
From Intel's perspective, there are also some US assets from IBM, which GloFo "acquired" in 2014 (for -1.5 billion at the time), which includes some oldish US fabs, but also a patent portfolio. It certainly goes into the current US political narrative that Gelsinger has been pushing.
But perhaps more importantly, I think that what Intel is buying is what was sorely lacking them : people and a methodology of working with external customers.
From all I've heard over the years, Intel's process and design teams are so insular and out of touch with the rest of the industry's practices that they had a terrible time just working with customers. It wasn't pretty when they tried the two previous time to open up their process. Loads of announcements, few products if any coming out, and when it worked, they ended up buying their customers anyway, see Altera.
If Intel truly wants to go in the foundry direction, they'll get some interesting outside experience, and while it may not make sense from a pure process point of view, considering how much of a sore point their inability to make it work has been on their previous attempts, the idea may have a lot of merit.
Perhaps a very smart move from Gelsinger, time will tell, in the meantime I'll have a laugh at Intel buying AMD's old fabs :)
> assets from IBM, which GloFo "acquired" in 2014 (for -1.5 billion at the time)
You used the term "acquired" along with a minus sign in front of 1.5 billion but just in case other people don't get the joke, IBM gave their fabs to Global Foundries and PAID them $1.5 billion to take them.
Yep. I'm glad others are aware of this. There were certain manufacturing processes that needed to be sustained for "national security" reasons. GF was an imperfect solution but it was better than the alternatives at the time.
Intel did offer foundry services, at least 3 years ago or so, albeit designing stuff for that node required putting everything in separated environment, and simulating in separate compute farms. Even TSMC which was and is far ahead does not demand this level of paranoia, only documentation is put in secure isolated environment, other stuff being managed in the more reasonable way of unix groups, which are, well, good enough.
Anyway I wonder if GlobalFoundries will be it's own business unit or otherwise get enough independence to do things the right way / differently than in the past? I often find large companies who are 'not good with customers' aren't really great at acquiring competency at being good with customers if they just buy and assimilate it.
Heck I've been a part of companies who had a big customer focus and they acquired smaller companies who weren't good with customers, and somehow the smaller company infected the organization and suddenly they became bad with customers :(
LOTS of companies are either suing or thinking of suing GF for failure to uphold technology development/adoption agreements. IBM is one of those.
This Intel situation is certainly part of "keeping it in the USA" though it would have been far easier and cheaper to prevent outsourcing back in the mid-1990s when Silicon Valley's silicon ebbed out of the country. It was a night-and-day change and lots of knowledgeable people were scattered to the wind back then. Now much of that knowledge is having to be reinvented and rediscovered from scratch (because it was tacit knowledge that never could be recorded into books or other writing).
This probably is the best way for Intel to become a foundry. They tried 10 years ago and the entire process was 100% Epic Fail. Not surprising given the pain seen when AMD split off its fabs to form GF, when it abandoned being an IDM vertical fab. When you are an IDM, many process-design interfaces break or have to be formalized in ways that were never imagined or learned by the organization. That's how Intel failed its foundry attempt before so simply avoid Intel culture by buying an already working culture makes a lot of sense.
> (GloFo licensed their 14nm from Samsung as a reminder after their own 14 failed, and their 7nm failed too)
Can someone with insight explain how this can happen? GloFo is a company worth billions, how can they just fail at this while Samsung succeeds. What's so hard about this in particular? I don't think I recall companies at this scale just failing at something that is supposed to be their area of expertise.
I‘m looking forward to historians writing a big post mortem about this in a few decades. For an outsider it is really hard to get to the bottom of what makes a company succeed or fail in this space. It seems like „throwing money at it“ is reaching its limits in this case
I think the charitable answer is that bleeding edge process development is getting very hard and many exited/stumbled. IBM failed at 14nm too, and Intel which famously called itself 2 years in front of the rest of the industry for decades has been stumbling hard since 2015 and still hasn't really replaced their 14nm on the most visible parts of their lineup.
As to what failing means, it can be many things, sometimes you just have way too many defects to have the process be commercially viable (if your cost is 10x your competition and you can't fix it, you don't have a process), some bad technical choices because there's been less and less cross industry cooperation (things like the ITRS that gave a rough roadmap hasn't been a thing for a while, last I checked), and introducing new technologies (EUV or new metals) may compound those. Sometimes chips in your new process are more dense (which is good), but perform poorly because of one of the previously mentioned stuff to the point it's hard selling new chips that perform worse than previous gen. In Intel's 10nm case there was a bit of everything and it will be very interesting to know exactly what factored in more (Cobalt is often rumoured, a very overconfident choice for MPP was my initial understanding, I haven't really followed on this).
In the case of GloFo, it's perhaps simpler than that : GloFo was part since 2007 of an alliance between them (initially as AMD), IBM and Samsung called the Common Platform [1] that had more or less standardised a process, with a lot of the heavy research done by IBM (I would say, out of spite for Intel) and then used by GloFo and Samsung.
14nm was the first that everyone was on their own, because IBM failed their research. In the end, Samsung managed to get it done, and GloFo either failed or... didn't try really hard ? This is where I'm gonna speculate a tiny bit and be less charitable, I don't think that GloFo was sufficiently funded in terms of process development, despite their parent owner being able to.
And it definitely looked like from the outside, at least from my point of view, they were always in dire need of money except for acquisitions, and late with everything (including the process inherited from the alliance). Most of the business decisions done (including buying Chartered and reverse buying IBM's 22nm fabs) seemed to be about pure business and missed the technical understanding of the business and what it required to keep it going.
At the end of the day, for them, licensing 14 from Samsung was a great out of that mess. But that didn't happen for 10, and we (at least I) don't really know why. My guess is that GloFo would probably have been happy to keep going on with that arrangement, but I may be completely wrong on that one.
At the time I seem to recall that both had some issues filling up their order book (which seems a bit insane today, considering the current shortage) and that may have played into it from Samsung's point of view.
Yes, I was surprised as well. That Global Foundries doesn't seem to know about this suggests to me some shenanigans on the street.
However, if they did buy GloFo it would give them a straight forward path to having a "Fab for hire" service ala TSMC and their own fabs as well. Kind of a have your cake and eat it too thing if you can bring GloFo's ability to bake chips up to the requisite standard.
No, Global foundries doesnt have a viable 5nm or 3nm node yet, yeah they have suspended all 7nm operations and researching on creating the 5nm node, but it will take time. It makes more sense to buy TSMC than GloFo.
Not just buying their old fabs, I believe GlobalFoundries is still AMD's main foundry, so most of AMD's products would be built by Intel. The 'Intel Inside' stickers are going to get very confusing!
Theoretically, no two patents overlap, otherwise they'd infringe on each other. So any newly acquired patent covers something every existing patent does not, including your own portfolio's coverage.
> But perhaps more importantly, I think that what Intel is buying is what was sorely lacking them : people and a methodology of working with external customers. From all I've heard over the years, Intel's process and design teams are so insular and out of touch with the rest of the industry's practices that they had a terrible time just working with customers.
This is not a problem at all. If they wanted to go this direction it's as simple as dumbing down, cheapening their process a bit, and giving free reign to make decisions on what they will be fabbing to technically competent salespeople.
With Intel's resources they could've even developed such commodity process separately to their own process, and ran them in parallel.
They had almost a whole decade to do that. It's just they simply didn't.
They've wanted to go in this direction for many years and so far failed. We've had meetings with them over the years and both times their offering was uncompetitive. I'm not sure what the sales people are supposed to do if the core technologies fabless customers want are not available.
I lot of people don't realise Intel are already in the foundary business. I'm not surprised their customers are not shouting about it - why would you want to tell everyone you are using an arguably failed process.
Intel wants to get into the foundry business. 99% of what Intel does is for their own chips. They don't have the support infrastructure of being able to deal with external customers. Global Foundries has that.
You don't just decide to make a chip. There are hundreds of foundry specific libraries, design rules, and more. There are always problems with the EDA CAD tools for new processes and you need lots of support people to answer questions and help debug problems that your customers are having.
Intel has tried being a foundry before multiple times over the last 20 years. They always fail and give up after a couple of years.
Well, Globalfoundries was exactly in the same situation directly after they were spun off from AMD and they bought Chartered Semiconductors to get foundry knowledge into their company. They also hired a lot of ex-freescale and ex-IBM people.
Wait I thought GloFo essentially gave up the node race and was settling into 'not the latest and greatest' market a la TI. Is that not a correct assumption?
>>before multiple times over the last 20 years. They always fail and give up after a couple of years.
That would be the concern. What happens to the chip market when intel rediscovers its inherent anti-competitive nature and shuts down any non-intel product?
Intel is already in the foundry Business their operating nodes are very large 14nm and 10nm (Which is 12nm) and 7nm process node is broken due to poor yields.
Wow. This is the chipmaking side of AMD that got spun off in 2009.
I didn't realize they still had a sizable US presence. Malta NY (14nm fab) & outside of Burlington VT (90nm fab). The largest employer in VT! Also Singapore & Dresden (12nm).
Supposedly they were going to try to go public. To be honest I have a hard time understanding what's in this purchase for Intel, hard to see this as anything but anti-competitive, but Intel is trying to become a silicon foundry to others & GF knows how to do that. They also have a decent patent warchest.
The former IBM fabs are producing military parts. The US government needs them to stay in operation and they don't need to be on cutting edge processes since that presents problems in extreme conditions.
GlobalFoundries is the largest private employer in Vermont, but the University of Vermont and the University of Vermont Medical Center each has more employees.
Kind of makes you realize how small Vermont is. I just checked and the city of San Francisco alone has about 300k more residents than the entire state of Vermont; 900k to 600k.
The purchase would both increase Intel's manufacturing capacity and pricing power. There used to be half a dozen x86 manufacturers and I'm sure they've enjoyed having it down to two (especially when one of them was weak) much more. What's not to love, from their perspective?
That they'd be increasing capacity in non-cutting edge fabrication, which doesn't really move the needle for Intel's current position.
If the argument is facilities and staff, that's fine. But buying an outdated fab that won't compete with TSM isn't that big of a game changer, Intel already has tons of that.
You're correct. They received a ton of money from government [0], and that money will be used for consolidation, not to improve competitiveness. Intel is buying a bunch of outdated fabs to increase its pricing power on older technology.
1) No money has been received. USICA ($52b number) has not even been passed through congress yet.
2) 12nm is hardly “outdated”, not every use case requires the most cutting edge node. There is plenty of value to be had at that process size.
3) There is more to running a foundry than process size, and Intel is likely interested as much/more in the customer relationship parts, as elaborated extensively in other threads
The $52b comes from USICA and it hasn't passed the House yet as far as I know. Please correct me if I'm wrong.
What are they supposed to do, not compete during the heyday of their industry because they expect a tax credit to be paid out over the next several years?
I think that this is a really interesting move by Intel. The conspiracy theorist in me thinks this is an interesting way for Intel to get at TSMC. A few years back there was a cross licensing agreement between TSMC and GlobalFoundries. The agreement is broad, and covers all patents made by TSMC for the next 9 years [1]. It is easy to see how many problems this could create for TSMC. Either the deal is void, in which case TSMC is and has been likely infringing on Global Foundries' (with an acquisition Intel's) patents... Or Intel has a broad cross licensing agreement with TSMC... The deal was good for TSMC at the time, as Global Foundries had given up on more advanced nodes as the investment was just too much for their shareholders, but with new ownership I see it as an interesting weakness.
Intel has historically been willing to play dirty, like messing with compilers to benefit Intel over Amd[2]. Or like when they gave kickbacks to OEMS [2]. Or when they paid vendors to not support AMD fully in software[2]. Or just plain old false advertising [2]. Actions like these is what led to a 1.25 Billion dollar settlement with AMD [3].
Outside of playing dirty, it is a good strategic move for their new foundry business. You get the tools, know how, processes, and most importantly customers that can make the venture a success. Intel has had a foundry business before [4], but they closed it. "ecosystem is everything with the foundry business and that takes time, money, and technical intimacy," [4]. Intel has money, and they are buying the years in the foundry business they missed along with technical intimacy to more standard tools. So, I think it makes sense from a business perspective, as it gives Intel a recurring revenue for its older processes and in turn greater advantage from its vertical integration.
I would expect a cross licensing deal to include clauses to cover the situation where one of the parties gets acquired. For example, AMD would break their cross licensing deal with Intel if they were bought.
I would hope this is blocked simply due to the reduction in competition. Number one player should not be buying anyone.
OTOH my impression was that GloFo stopped short of EUV due to the cost, not that they couldn't do it. Intel might be able to fix that, but I think they're probably going the way of IBM.
I don't think this should be allowed. Intel is entered the public fab market with an insane amount of production capacity, they shouldn't also be allowed to gobble up the 3rd place industry supplier.
Of course it will happen, it was funded (directly or indirectly) with public money[1]. The only thing that surprises me is that I expected the ink to dry before they used my money to buy their competition.
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From Intel's perspective, there are also some US assets from IBM, which GloFo "acquired" in 2014 (for -1.5 billion at the time), which includes some oldish US fabs, but also a patent portfolio. It certainly goes into the current US political narrative that Gelsinger has been pushing.
But perhaps more importantly, I think that what Intel is buying is what was sorely lacking them : people and a methodology of working with external customers. From all I've heard over the years, Intel's process and design teams are so insular and out of touch with the rest of the industry's practices that they had a terrible time just working with customers. It wasn't pretty when they tried the two previous time to open up their process. Loads of announcements, few products if any coming out, and when it worked, they ended up buying their customers anyway, see Altera.
If Intel truly wants to go in the foundry direction, they'll get some interesting outside experience, and while it may not make sense from a pure process point of view, considering how much of a sore point their inability to make it work has been on their previous attempts, the idea may have a lot of merit.
Perhaps a very smart move from Gelsinger, time will tell, in the meantime I'll have a laugh at Intel buying AMD's old fabs :)
You used the term "acquired" along with a minus sign in front of 1.5 billion but just in case other people don't get the joke, IBM gave their fabs to Global Foundries and PAID them $1.5 billion to take them.
Yep. I'm glad others are aware of this. There were certain manufacturing processes that needed to be sustained for "national security" reasons. GF was an imperfect solution but it was better than the alternatives at the time.
Anyway I wonder if GlobalFoundries will be it's own business unit or otherwise get enough independence to do things the right way / differently than in the past? I often find large companies who are 'not good with customers' aren't really great at acquiring competency at being good with customers if they just buy and assimilate it.
Heck I've been a part of companies who had a big customer focus and they acquired smaller companies who weren't good with customers, and somehow the smaller company infected the organization and suddenly they became bad with customers :(
This Intel situation is certainly part of "keeping it in the USA" though it would have been far easier and cheaper to prevent outsourcing back in the mid-1990s when Silicon Valley's silicon ebbed out of the country. It was a night-and-day change and lots of knowledgeable people were scattered to the wind back then. Now much of that knowledge is having to be reinvented and rediscovered from scratch (because it was tacit knowledge that never could be recorded into books or other writing).
This probably is the best way for Intel to become a foundry. They tried 10 years ago and the entire process was 100% Epic Fail. Not surprising given the pain seen when AMD split off its fabs to form GF, when it abandoned being an IDM vertical fab. When you are an IDM, many process-design interfaces break or have to be formalized in ways that were never imagined or learned by the organization. That's how Intel failed its foundry attempt before so simply avoid Intel culture by buying an already working culture makes a lot of sense.
Can someone with insight explain how this can happen? GloFo is a company worth billions, how can they just fail at this while Samsung succeeds. What's so hard about this in particular? I don't think I recall companies at this scale just failing at something that is supposed to be their area of expertise.
As to what failing means, it can be many things, sometimes you just have way too many defects to have the process be commercially viable (if your cost is 10x your competition and you can't fix it, you don't have a process), some bad technical choices because there's been less and less cross industry cooperation (things like the ITRS that gave a rough roadmap hasn't been a thing for a while, last I checked), and introducing new technologies (EUV or new metals) may compound those. Sometimes chips in your new process are more dense (which is good), but perform poorly because of one of the previously mentioned stuff to the point it's hard selling new chips that perform worse than previous gen. In Intel's 10nm case there was a bit of everything and it will be very interesting to know exactly what factored in more (Cobalt is often rumoured, a very overconfident choice for MPP was my initial understanding, I haven't really followed on this).
In the case of GloFo, it's perhaps simpler than that : GloFo was part since 2007 of an alliance between them (initially as AMD), IBM and Samsung called the Common Platform [1] that had more or less standardised a process, with a lot of the heavy research done by IBM (I would say, out of spite for Intel) and then used by GloFo and Samsung.
14nm was the first that everyone was on their own, because IBM failed their research. In the end, Samsung managed to get it done, and GloFo either failed or... didn't try really hard ? This is where I'm gonna speculate a tiny bit and be less charitable, I don't think that GloFo was sufficiently funded in terms of process development, despite their parent owner being able to.
And it definitely looked like from the outside, at least from my point of view, they were always in dire need of money except for acquisitions, and late with everything (including the process inherited from the alliance). Most of the business decisions done (including buying Chartered and reverse buying IBM's 22nm fabs) seemed to be about pure business and missed the technical understanding of the business and what it required to keep it going.
At the end of the day, for them, licensing 14 from Samsung was a great out of that mess. But that didn't happen for 10, and we (at least I) don't really know why. My guess is that GloFo would probably have been happy to keep going on with that arrangement, but I may be completely wrong on that one.
At the time I seem to recall that both had some issues filling up their order book (which seems a bit insane today, considering the current shortage) and that may have played into it from Samsung's point of view.
[1](https://www.chiphistory.org/546-ibm-microelectronics-common-...)
However, if they did buy GloFo it would give them a straight forward path to having a "Fab for hire" service ala TSMC and their own fabs as well. Kind of a have your cake and eat it too thing if you can bring GloFo's ability to bake chips up to the requisite standard.
Only the IOD are still on GF 14 / 12 nm, along with some APU. Everything else are TSMC.
This is not a problem at all. If they wanted to go this direction it's as simple as dumbing down, cheapening their process a bit, and giving free reign to make decisions on what they will be fabbing to technically competent salespeople.
With Intel's resources they could've even developed such commodity process separately to their own process, and ran them in parallel.
They had almost a whole decade to do that. It's just they simply didn't.
They've wanted to go in this direction for many years and so far failed. We've had meetings with them over the years and both times their offering was uncompetitive. I'm not sure what the sales people are supposed to do if the core technologies fabless customers want are not available.
I lot of people don't realise Intel are already in the foundary business. I'm not surprised their customers are not shouting about it - why would you want to tell everyone you are using an arguably failed process.
You don't just decide to make a chip. There are hundreds of foundry specific libraries, design rules, and more. There are always problems with the EDA CAD tools for new processes and you need lots of support people to answer questions and help debug problems that your customers are having.
Intel has tried being a foundry before multiple times over the last 20 years. They always fail and give up after a couple of years.
Considering the way things are going I am more than a bit intrigued, but not surprised.
That would be the concern. What happens to the chip market when intel rediscovers its inherent anti-competitive nature and shuts down any non-intel product?
But the chance to utilise EMIB would be cool.
I didn't realize they still had a sizable US presence. Malta NY (14nm fab) & outside of Burlington VT (90nm fab). The largest employer in VT! Also Singapore & Dresden (12nm).
Supposedly they were going to try to go public. To be honest I have a hard time understanding what's in this purchase for Intel, hard to see this as anything but anti-competitive, but Intel is trying to become a silicon foundry to others & GF knows how to do that. They also have a decent patent warchest.
https://en.m.wikipedia.org/wiki/GlobalFoundries
If the argument is facilities and staff, that's fine. But buying an outdated fab that won't compete with TSM isn't that big of a game changer, Intel already has tons of that.
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[0] https://www.semiconductors.org/chips/
1) No money has been received. USICA ($52b number) has not even been passed through congress yet.
2) 12nm is hardly “outdated”, not every use case requires the most cutting edge node. There is plenty of value to be had at that process size.
3) There is more to running a foundry than process size, and Intel is likely interested as much/more in the customer relationship parts, as elaborated extensively in other threads
What are they supposed to do, not compete during the heyday of their industry because they expect a tax credit to be paid out over the next several years?
>Sinema’s bipartisan CHIPS For America Act - which is now law - restores America’s leadership in semiconductor manufacturing.
https://www.sinema.senate.gov/fueled-sinemas-chips-act-intel...
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Intel has historically been willing to play dirty, like messing with compilers to benefit Intel over Amd[2]. Or like when they gave kickbacks to OEMS [2]. Or when they paid vendors to not support AMD fully in software[2]. Or just plain old false advertising [2]. Actions like these is what led to a 1.25 Billion dollar settlement with AMD [3].
Outside of playing dirty, it is a good strategic move for their new foundry business. You get the tools, know how, processes, and most importantly customers that can make the venture a success. Intel has had a foundry business before [4], but they closed it. "ecosystem is everything with the foundry business and that takes time, money, and technical intimacy," [4]. Intel has money, and they are buying the years in the foundry business they missed along with technical intimacy to more standard tools. So, I think it makes sense from a business perspective, as it gives Intel a recurring revenue for its older processes and in turn greater advantage from its vertical integration.
[1] https://www.anandtech.com/show/15038/globalfoundries-and-tsm... [2]https://www.anandtech.com/show/3839/intel-settles-with-the-f... [3] https://www.cnet.com/news/intel-to-pay-amd-1-25-billion-in-a... [4] https://semiwiki.com/semiconductor-manufacturers/intel/7912-...
OTOH my impression was that GloFo stopped short of EUV due to the cost, not that they couldn't do it. Intel might be able to fix that, but I think they're probably going the way of IBM.
Allowing smaller market participants to consolidate to face the behemoth is not necessarily going to be perceived as anti-competitive.
Intel is not small by any measure. Now TI and GloFlo, or some other pairing I might agree with.
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1: https://www.sinema.senate.gov/fueled-sinemas-chips-act-intel...