Globalfoundries has named former Cypress Semiconductor executive Jim Kupec to its top marketing position, as the newly established company begins to assemble its executive team.
Globalfoundries is the chip manufacturing company recently formed by a joint venture between Advanced Micro Devices and Advanced Technology Investment Company (ATIC).
Kupec spent 15 years with Cypress Semiconductor, rising through a variety of engineering, operations, and management positions to the role of senior vice president, according to a statement from Globalfoundries.
After leaving Cypress, Kupec became president of United Microelectronics Co. (UMC) USA. Taiwan-based UMC is one of the largest contract chip manufacturers in the world and competes with Taiwan Semiconductor Manufacturing Co. Globalfoundries will compete with both of these companies for customers.
Most recently, Kupec served as chief operating officer of eSilicon, an ASIC (application-specific integrated circuit) design and manufacturing services company.
"The addition of Jim's extensive foundry experience, on both the supplier and customer side of the business, underscores our commitment to building a world-class global foundry services provider," said Doug Grose, CEO of Globalfoundries, in a statement.
Intel concept wide-screen mobile device
(Credit: Intel)
Intel smartphone and mobile Internet device concept designs have potential. So, as Intel prepares to enter the smartphone market with LG Electronics and others, will these designs be realized? And would you buy one?
One thing is certain. A re-badged Apple iPhone running Windows isn't going to upset the Apple cart (pun intended).
So, one obvious challenge is for Intel to get its considerable weight behind a new smartphone or mobile Internet device (MID) design that resets the market.
Just so happens there's a design that Intel has been brandishing for a couple of years now (see photos). It's essentially a high-end wide-screen smartphone or MID (choose your favorite device category nomenclature).
A series of videos demonstrating the Intel Moorestown-based mobile device pretty clearly show how--by virtue of the wide screen--the device would be different.
Intel concept device, with virtual keyboard
(Credit: Intel)Now, if that device could run a browser and basic applications faster than my BlackBerry Storm (which I gauge has circa 1995 PC performance) on a bigger screen, that would be enough for me to buy one.
At least one analyst expects big things from Intel in this market. Doug Freedman of Broadpoint AmTech upgraded Intel to a "buy" this week, partially on expectations that Intel may flourish in the system-on-a-chip market as a result of the chip production deal struck earlier this month with Taiwan Semiconductor Manufacturing. Intel's upcoming Moorestown chip--the linchpin of the deal--is a system-on-a-chip that's targeted, not coincidentally, at high-end smartphones, among other devices.
Freedman had this to say in a research note about Intel: "The TSMC (deal) likely opens the door to highly integrated (system-on-a-chip) solutions for target markets such as consumer, wireless, communications and networking infrastructure, and automotive," he wrote. "Though we cannot assign a value to future business opportunities without specific customer announcements or end-market intentions...We note that a minor incremental opportunity would not have triggered a press release event for Intel or TSMC."
Translation: there's probably something pretty big in the works.
Updated at 10:50 a.m. PST with additional information from announcement and Intel-TSMC conference call.
Intel and Taiwan Semiconductor Manufacturing Co. will collaborate on Atom chip production, the companies announced Monday.
For its part, Intel is eying big markets--such as smartphones--where it is currently not a player, but TSMC is. "Many of our customers already had an existing IP (Intellectual Property) infrastructure on TSMC that they would like to take advantage of as they ramp Atom-based products. That's essentially what the agreement is about," said Anand Chandrashekar, senior vice president at Intel, speaking Monday morning in a joint Intel-TSMC conference call. Atom is currently the most widely used processor in Netbooks.
Chips are targeted at end products such as handhelds, Netbooks, and consumer electronics, Chandrashekar said.
"(It's about) enabling Atom on TSMC (and) enabling TSMC to go after these new market segments as well as Intel going after these market segments together," Chandrashekar said.
Under the agreement, Intel would port its Atom processor CPU cores to the TSMC technology platform including processes, IP, libraries, and design flows. TSMC, however, will not market Atom chips as a TSMC product. It will serve solely as a manufacturer of Atom-related silicon, company executives said Monday. All products that emerge from the collaboration will be Intel-branded products.
Collaborating with another manufacturer on chip production is an unusual move for Intel, which prides itself on doing chip manufacturing in-house. It is not unprecedented, however, as Intel has consigned production of select silicon to outside manufacturers in the past. TSMC is the largest contract chip manufacturer in the world.
The upcoming Atom processor code-named Moorestown--due late this year or early next year--will be a system on a chip (SOC) that combines the processor, graphics, memory controller, and video encode/decode into a single chip package. An accompanying chip will provide functions such as wireless, storage, and I/O (input/output).
TSMC already makes SOCs for companies such as Qualcomm and Texas Instruments.
Intel's goal is to get its x86 architecture-based Moorestown SOCs into future cell phones. The chipmaker recently announced a deal with LG Electronics whereby LG will use Intel's Moorestown processor in upcoming smartphones.
The challenge for Intel will be matching the energy frugality of silicon from longtime cell phone silicon suppliers like Qualcomm and Texas Instruments. Toshiba recently disclosed that it is using Qualcomm's Snapdragon chip in a forthcoming phone, and Qualcomm supplied the main processor in the first phone using Google's Android OS.
Updated at 3:00 p.m. PST with comments from an Intel spokesperson.
Intel said on Wednesday it will close chip plants to align its manufacturing capacity to current market conditions. Between 5,000 and 6,000 employees will be affected.
The world's largest chipmaker will halt production at five "older" factories.
The company plans to close two existing assembly test facilities in Penang, Malaysia, and one in Cavite, Philippines, and will halt production at Fab 20, an older 200mm wafer fabrication facility in Hillsboro, Ore., Intel said. Additionally, wafer production operations will end at the D2 facility in Santa Clara, Calif., the company said.
"The actions at the four sites, when combined with associated support functions, are expected to affect between 5,000 and 6,000 employees worldwide," Intel said in a statement. "Not all employees will leave Intel; some may be offered positions at other facilities. The actions will take place between now and the end of 2009."
Intel said it will consolidate and streamline some older capacity without impacting the deployment of new, leading-edge 45-nanometer and 32-nanometer manufacturing capacity.
Intel spokesperson Chuck Mulloy, in a phone interview, said this move is connected to what the company said in its earnings conference call last week when chief financial officer Stacy Smith said that Intel would aggressively reduce factory utilization levels in order to avoid oversupply.
"During the normal course of events it's a long-term planning process to take the older capacity offline. And all of these factories are on a roadmap to be rolled out of the network at some point. But the financial decline that we're facing today accelerated that process," he said.
Advanced Micro Devices said Monday that it will incur $70 million in restructuring costs in the fourth quarter, according to a filing with the Securities and Exchange Commission.
The filing also cited fourth-quarter layoffs of 600 employees. An AMD spokesperson said that approximately 500 layoffs were announced in November, but that the company "ended up closer to 600."
The restructuring dollar figure is new, AMD said. The company now estimates that the "restructuring expense that it will record in the fourth quarter of fiscal 2008 will be approximately $70 million, based on the restructuring plan approved by the Company on December 19, 2008."
Of the $70 million, about $34 million is related to severance and employee benefits, $13 million is related to contract or program termination costs, approximately $17 million is connected to asset impairments, and about $6 million is related to exit costs at facilities.
Previously, AMD had reported in a Form 10-Q filing that it expected to cut approximately 500 employees and take a charge to operations in the fourth quarter of fiscal 2008 of approximately $50 million.
Future cost reductions are also planned. "Further cost reduction actions will result in additional charges in the first half of fiscal 2009, which the company cannot estimate at this time," according to Monday's Form 8K filing.
AMD also said that on December 19 it determined that it would incur a material charge for impairment of assets during the fiscal quarter ended December 27 related to the 2006 acquisition of ATI Technologies. "The Company concluded that the current carrying value of its goodwill...was impaired." AMD added: "This conclusion was reached based on the results of an updated long-term financial outlook for the businesses of the former ATI Technologies Inc. in light of the current market conditions and economic outlook" and "due to the deterioration in the price of the Company's common stock and the resulting reduced market capitalization."
AMD expects that the impairment charge "will be material, but, as of the time of this filing...is unable to estimate the amount or range of amounts of the impairment charge. The Company will disclose such an estimate or range of estimates in a filing with the SEC promptly and in any event within four business days of determining such an estimate or range of estimates," according to the Form 8K.
The Sunnyvale, Calif.-based chipmaker split in two earlier this year in order to defray the burdensome costs of its manufacturing operations. The manufacturing operations received a massive investment from Mubadala Development Co. and is now run as a separate concern called The Foundry Company.
The price of its stock has sunk from about $6 in June of this year to a little more than $2.
SanDisk is evaluating a production halt over the holidays at its manufacturing facilities in Japan, reflecting an overall slowdown in the flash memory chip industry.
SanDisk solid-state drives that use NAND flash memory
(Credit: SanDisk)"The joint venture is evaluating plans for operations over the holiday season, including a possible stoppage of some production lines," a SanDisk spokesman said Friday. "We constantly consider manufacturing schedules in light of market requirements and this is particularly true during the holiday season," he added.
Milpitas, Calif.-based SanDisk and Toshiba have joint production lines for NAND flash chip manufacturing in Japan.
This follows a Bloomberg report that said Toshiba is considering a "partial stoppage" of flash memory production in Japan over the holidays.
Though the Japanese company is being cagey about how it couches the stoppage, these production halts appear longer and broader than typical holiday slowdowns.
Toshiba and SanDisk have a 36 percent share of the global NAND flash market, according to a JPMorgan report cited by Bloomberg. Samsung is the market leader with 43 percent.
A recent report from iSuppli said that this year "is the first time in the history of the NAND flash market that revenue will decline on an annual basis."
Micron Technology, which has a joint NAND flash production venture with Intel, said in October that it was stopping production at its Boise, Idaho, facility and cutting its workforce.
Prices of the benchmark NAND flash memory chip have plummeted 70 percent this year, according to DRAMexchange, cited by Bloomberg.
In related news, other Japanese chipmakers including Renesas Technology, NEC, and Fujitsu may extend the time they halt holiday production too, according to Bloomberg.
Advanced Micro Devices talked more about options for reducing its participation in a new manufacturing venture during its third-quarter earnings call on Thursday. The chipmaker also offered more details on conversion to 45-nanometer processors.
AMD 45-nanometer die
(Credit: AMD)Earlier this month, AMD announced that it was splitting into two companies: one for designing chips (AMD), the other for manufacturing them (The Foundry Company). The latter company will be owned approximately 56 percent by Advanced Technology Investment Co. (ATIC) and 44 percent by AMD.
During the conference call, AMD Chief Financial Officer Bob Rivet responded to a question from an analyst about an "exit strategy" for the foundry (manufacturing) side of the business by saying that AMD will "turn in more shares and ownership of the company" if necessary.
As Rivet put it, the foundry deal provides that "when a capital call is required for the foundry business, it allows us to either pay our fair share of that capital call or turn in more shares and ownership of the company...We'll make that determination at each point in time...There's a natural way to get out of it if we want to."
All of this--whether accounting is done on a consolidated or nonconsolidated basis--can get a little confusing for nonaccountants (and AMD even volunteered that it's "confusing") but Rivet put it this way. "Think of it this way: The Foundry Company piece of the bucket will have profits and losses...but they're all cashless. The cash generating machine of AMD is the AMD design product (company)."
Both Rivet and CEO Dirk Meyer also discussed AMD's conversion to 45-nanometer chips. "We'll be fully converted in first half of next year," said Meyer. Rivet added that it will be a "very fast ramp" to 45 nanometer chips. AMD is currently shipping processors based on 65-nanometer technology. Smaller geometries typically result in faster processors that use less power.
Speaking about AMD's 45-nanometer Shanghai server processor, Meyer said, "You'll see OEM (server) systems in the market this quarter," and added that AMD is "shipping the desktop variant this quarter and you'll see OEM systems in the market early next quarter."
Responding to a question about AMD's Netbook chip strategy and its response to Intel's Atom processor, Meyer said: "Clearly the Netbook is a new form factor and new market opportunity and one we're not participating in right now, today."
He said more details will come at an upcoming analyst meeting. "We do have strategies together with our OEMs for pushing solutions both down into smaller form factors and lower notebook price points."
Update Tuesday 4:12 a.m. PDT: AMD has made the official announcement of the manufacturing spin-off.
On Tuesday, Advanced Micro Devices will announce a long-expected restructuring, according to sources familiar with the deal.
As expected, the No. 2 supplier of PC processors will split into two companies: one for designing chips, the other for manufacturing them. The capital-intensive business of manufacturing chips is weighing on AMD as it reels under a $5 billion debt load.
The investment is expected to allow AMD to remain directly involved in chip manufacturing--crucial for competing with Intel, which has used its manufacturing prowess to great advantage.
AMD would not comment Monday.
The company has secured about $5.7 billion of "confirmed, pledged investment," with some of the money earmarked for a future manufacturing facility in Malta, New York, according to sources.
AMD will own part of the new manufacturing entity, for the time being to be called The Foundry Company, while Advanced Technology Investment Co. (ATIC) will own the rest. One of the investors, Abu Dhabi-based Mubadala Development Co., invested approximately $622 million in AMD last November.
Mubadala already holds an 8.1 percent stake in AMD. Upon closing the deal, Mubadala will own 19.3 percent of AMD, according to sources.
ATIC--also based in Abu Dhabi--will have equal voting rights with AMD in The Foundry Company and own 55.6 percent of the new entity. ATIC will invest an initial $2.1 billion, of which $1.4 billion will be invested directly in the new company and $700 million will be paid directly to AMD, according to sources close to the deal.
In addition, ATIC will commit a minimum of $3.6 billion and up to $6 billion in additional funds over the next five years for the upgrade and expansion of fabrication facilities in Dresden, Germany, and construction of a new facility in upstate New York, near the town of Malta.
Mubadala, for its part, will purchase 58 million newly issued AMD shares valued at $314 million and warrants for 30 million additional shares, giving it a total stake in AMD of approximately 19.3 percent on a fully diluted basis, sources said.
Mubadala will also have the right to designate a representative for election as a member of the board of directors of AMD.
All of this is expected to greatly improve AMD's liquidity.
AMD CEO Dirk Meyer and other company executives are expected to make the announcement Tuesday.
The investment is characterized by one source as coming from investors with "a long-term vision, who want to help (AMD) scale the foundry operations to compete globally." A foundry is a manufacturing facility.
AMD has been laboring for months over details of the restructuring, which it has termed "Asset Smart." AMD Chief Financial Officer Bob Rivet said during AMD's second-quarter earnings conference call that Asset Smart would be "a major reformation of the company."
Also, at that time, AMD announced that Meyer would take over as CEO and Hector Ruiz would relinquish that post but remain as chairman to oversee AMD's transition to Asset Smart.
AMD already has a relationship with IBM in which AMD uses IBM's advanced test manufacturing facilities.
Update on July 24, 5:50 p.m. PDT with additional information and corrections.
UPDATE: According to Kirk Ladendorf, the author of The Austin American-Statesman article, the Statesman will issue an update, likely sometime during the week of July 28. In short, it appears that AMD's contention that Dirk Meyer was misquoted is true.
Advanced Micro Devices will split into separate companies as it spins off its manufacturing operations, according to a report.
The Austin American-Statesman had one of the most unambiguous statements to date when it interviewed AMD's new CEO, Dirk Meyer, last week: "Meyer says the company is just months away from a major restructuring that will spin the manufacturing operations off into a separate company, with new ownership," the report said.
AMD spokesperson Drew Prairie says Meyer was misquoted, but did not give details on the company's future plans. He did say that "it's fundamentally important to AMD to transform how we manufacture our wafers."
One thing is clear: AMD has been laboring for months over the details of the restructuring. "We have made enormous progress. Certainly have an incredibly high level of expectation we will be able to do that before the end of the year," said AMD chairman Hector Ruiz--who stepped down as CEO last week--during the second quarter earnings conference call on July 17.
What may happen before the end of the year is a partial reorganization of the company rather than a clean spin-off of all manufacturing assets. But the basic import of the Statesman comment isn't necessarily inaccurate. AMD Chief Financial Officer Bob Rivet said during AMD's second-quarter earnings conference call that Asset Smart "will be a major reformation of the company." Asset Smart is AMD's terminology for the restructuring of its manufacturing operations.
"Part of the reason for the timing of the CEO transition...(is) we're just about at the goal line on Asset Smart," Prairie said. "It's at a point where it requires 100 percent of Hector's time and focus to see it through."
One of the biggest pieces of news that emerged from AMD's earnings announcement last week was that Meyer would become CEO and Ruiz would remain as chairman to oversee AMD's transition to Asset Smart. This arrangement has led to speculation that AMD would spin off the manufacturing part of the business. The question seems to be: How much of this would AMD retain?
AMD already has an Asset Smart relationship with IBM, Prairie said. "We have a very good relationship with IBM on the process technology side. That's one of the examples we have held out where we have gone Asset Smart in the past. Not having to have a 300 millimeter test facility on our books because we use their facilities."
However, Ashok Kumar, senior vice president at CRT Capital Group, said that one of the likeliest partners for AMD when it restructures manufacturing operations is Singapore-based Chartered Semiconductor Manufacturing. Taiwan Semiconductor Manufacturing Company (TSMC), which currently makes AMD's graphics processors, has also been cited as possibly playing a role in AMD's restructuring.
AMD is leaning increasingly on IBM as it battles with Intel for next-generation microprocessor manufacturing leadership. And the payout to IBM is significant.
AMD fab
(Credit: AMD)First some background: On Tuesday, AMD announced that IBM had successfully produced a working test chip using next-generation Extreme Ultra-Violet (EUV) lithography for the critical first layer of metal connections across an entire chip. Previous projects utilizing EUV produced working chip components on only a very small portion of the chip.
Why EUV? The size of transistors and the metal lines that connect them is directly related to the wavelength of light that is used to project a chip design onto a wafer. EUV lithography uses a wavelength of 13.5 nanometers (nm), significantly shorter than today's 193nm lithography techniques, allowing the march toward smaller and smaller chip features to continue (though EUV has its own set of problems discussed below). EUV is currently targeted at the 22nm generation of chips, due in three to five years. Intel, a few years back, was targeting EUV for the 45nm generation of chips but abandoned it.
According to the Tuesday announcement, IBM and its partners patterned the first layer of metal interconnects (between the transistors), then, after other processes, the EUV device structures underwent electrical testing at AMD, with transistors showing characteristics consistent with those of test chips built using more standard techniques, the two companies said.
This development follows a series of joint disclosures over the past six years that highlight the crucial expertise that IBM provides to AMD. The two companies began cooperating on advanced chip manufacturing in 2002, when AMD was having trouble with silicon-on-insulator technology, or SOI. AMD got SOI to work with help from IBM and they have been renewing agreements periodically since then. First, in September 2004, to include development of technologies through 2008 for 32nm manufacturing and then again, in November 2005, the agreement was extended through 2011 for the 22nm process. In other areas, AMD is now cooperating with IBM on "high-k/metal gate" transistor technology for next-generation 32nm chips--a technology that Intel is employing in its current 45nm chips.
This kind of know-how is not cheap. AMD's 2007 10K form says the following about the agreement that extends to December 31, 2011: "We anticipate that, under this agreement, we will pay fees to IBM of approximately $400 million in connection with joint development projects between 2008 and 2011."
Even with the substantial payout of $400 million, AMD goes on to say in the 10K that a termination of the agreement "could significantly increase our research and development costs, and we could experience delays or other setbacks in the development of new process technologies, any of which would materially adversely affect us."
Here's the challenge for AMD. Intel's R&D budget dwarfs AMD's. Intel spends about $6 billion per year on R&D, AMD about one-sixth of this. On the manufacturing front, it's even more of a mismatch. For the 45nm generation of chips alone, Intel plans to eventually have four plants making 45nm processors, which Intel is currently manufacturing commercially. AMD doesn't even have 45nm out the door yet (commercially) and needs a chip manufacturing heavyweight like IBM to stay in the running.
As with any collaboration, part of the impetus is to reduce costs. AMD's work with contract manufacturer Chartered Semiconductor is another cost-saving measure. And AMD is by no means the first company to go outside for help and farm out development and manufacturing, said Don Scansen, a semiconductor technology analyst at Semiconductor Insights. But AMD may do more of this as it continues "to get hammered by analysts and the stock market," said Scansen. "IBM is shouldering most of the process development work out of the Common Platform partners--including AMD."
"IBM is a critical part of AMD's Asset Smart manufacturing (and) R&D strategy," an AMD spokesperson said. "By sharing the R&D cost for semiconductor process technology across the membership of the IBM Alliance, each of the parties, including AMD, get access to leading-edge manufacturing technology."
On its Web site, AMD lists transistors, chip connection, packing, and lithography as areas of collaboration. Much of the collaboration takes place at the Albany Nanotech Center. Not coincidentally, Albany is the same spot where AMD has plans to build a chip plant. The chipmaker said recently that if it decides to go forward with the $3.2 billion fabrication plant, construction would start next January, according to a recent report at Timesunion.com.
IBM has a state-of-the-art manufacturing line in East Fishkill, N.Y.--about 90 miles away from Albany--among other locations.
All this collaboration between IBM and AMD means of course that future manufacturing hurdles are high--for everybody. Including Intel, which has delayed procurement of an R&D EUV lithography tool from Nikon, according to a report in EE Times, casting doubt on the viability of EUV at Intel.
From this perspective, the IBM-AMD EUV statement could be seen as promising for AMD. "AMD's ability to get a full chip done with an EUV tool is pretty significant," Scansen said. Some have even been speculating that EUV would not be ready for 22nm, he said. "(But) this announcement might suggest that development is quickening."
AMD and IBM said Tuesday that the next step in proving viability of the EUV lithography for production will be to apply it not only to metal interconnects but to all critical layers to show that an entire working microprocessor can be made utilizing EUV lithography.
Intel has other ideas on how to get to 32nm and beyond using more conventional lithography and "clever design tricks," according to Scansen. And Intel is already moving forward aggressively with 32nm. The company will switch to immersion lithography at 32nm on a "couple of critical layers," according to a statement made in December of last year by Brian Krzanich, vice president and general manager of manufacturing and operations at Intel. The more traditional dry lithography will still be used on less critical layers.
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