GlobalFoundries Stops All 7nm Development: Opts To Focus ...

GlobalFoundries on Monday announced an important strategy shift. The contract maker of semiconductors decided to cease development of ... Home> Semiconductors GlobalFoundriesStopsAll7nmDevelopment:OptsToFocusonSpecializedProcesses byAntonShilov&IanCutressonAugust27,20184:01PMEST Postedin Semiconductors CPUs AMD GlobalFoundries 7nm 7LP 127Comments |AddAComment 127Comments +AddAComment 7LPCannedDuetoStrategyShift What’sNextforGlobalFoundries? GlobalFoundriesPressRelease GlobalFoundriesonMondayannouncedanimportantstrategyshift.Thecontractmakerofsemiconductorsdecidedtoceasedevelopmentofbleedingedgemanufacturingtechnologiesandstopallworkonits7LP(7nm)fabricationprocesses,whichwillnotbeusedforanyclient.Instead,thecompanywillfocusonspecializedprocesstechnologiesforclientsinemerginghigh-growthmarkets.Thesetechnologieswillinitiallybebasedonthecompany’s14LPP/12LPplatformandwillincludeRF,embeddedmemory,andlowpowerfeatures.Becauseofthestrategyshift,GFwillcut5%ofitsstaffaswellasrenegotiateitsWSAandIP-relateddealswithAMDandIBM.Inabidtounderstandmorewhatisgoingon,wesatdownwithGaryPatton,CTOofGlobalFoundries. 7LPCannedDuetoStrategyShift GlobalFoundrieswasontracktotapeoutitsclients’firstchipsmadeusingits7nmprocesstechnologyinthefourthquarterofthisyear,but“afewweeksago”thecompanydecidedtotakeadrastic,strategicturn,saysGaryPatton.TheCTOstressedthatthedecisionwasmadenotbasedontechnicalissuesthatthecompanyfaced,butonacarefulconsiderationofbusinessopportunitiesthecompanyhadwithits7LPplatformaswellasfinancialconcerns. ItisnoteworthythatwhenGlobalFoundriesfirstannouncedits7LPplatforminSeptember2016,itsaidthatitwouldstartriskproductionofprocessorsusingthistechnologyinearly2018(PR),whichmeansthatthefirstchipsshouldhavebeentapedoutbeforethat.WhenthecompanydetailedtheprocessinJune2018,itsaidthatitexpectedtostart“volumeproductionrampinginthesecondhalfof2018”(PR),whichwouldbeclosetoimpossibleifcustomerstapedouttheirfirstchipsonlyinQ4. Generally,itlookslikethecompanyhadtoadjustitsroadmapsomewherealongtheway,movingthestartofhigh-volumemanufacturing(HVM)furtherinto2019.WhetherornottheseadjustmentshadanyimplicationsonGlobalFoundriesisuptodebate.KeepinmindthatAMD’sfirst7nmproductwasdesignedforTSMC’sCLN7FFfromthebeginning,sothecompanydidnotbetonGF’s7LPinlate2018anyway,andnorushwiththemanufacturingtechnologywasneededforGF’skeycustomer. Alongwiththecancellationofthe7LP,GlobalFoundriesessentiallycannedallpathfindingandresearchoperationsfor5nmand3nmnodes.ThecompanywillcontinuetoworkwiththeIBMResearchAlliance(inAlbany,NY)untiltheendofthisyear,butGlobalFoundriesisnotsureitmakessensetoinvestinR&Dfor‘bleedingedge’nodesgiventhatitdoesnotplantousethemanytimesoon.ThemanufacturerwillcontinuetocooperatewithIMEC,whichworksonabroadersetoftechnologiesthatwillbeusefulforGF’supcomingspecializedfabricationprocesses,butobviouslyitwillrefocusitsprioritiesthereaswell(moreonGF’sfutureprocesstechnologieslaterinthisarticle). So,thekeytakeawayhereisthatwhilethe7LPplatformwasabitbehindTSMC’sCLN7FFwhenitcomestoHVM–andGlobalFoundrieshasneverbeenfirsttomarketwithleadingedgebulkmanufacturingtechnologiesanyway –therewerenoissueswiththefabricationprocessitself.Ratherthereweredeepereconomicreasonsbehindthedecision. EconomicReasonsBehindtheMove AswenotedinourarticlecoveringGlobalFoundries'snewCEOhireearlierthisyear,formerCEOSanjayJhawasneverabletomakethecompanyprofitable.HiskeytasksweretoincreaseGlobalFoundries’ssales,streamlinethecompanyingeneral,andensurethatitexecutesitsroadmap. Toaddresstheneedsofthemanufacturer’straditionalkeyclient(AMD)andensurethathiscompanywascompetitiveagainstothercontractmakersofsemiconductors,helicensedSamsungFoundry's14LPPfabricationtechnology.Thatstrategyworkedwell.WithSunjayJhaatthehelm,GlobalFoundrieshasmanagedtolandavarietyofnewcustomersandincreaseitssalesofsemiconductorwafersfromapproximately$4.121billionin2013to$6.176billionin2017.Besides,thefoundry’sleading-edgeFab8,whichhasbeenprocessingwafersusingexclusively14LPPprocesstechnologyforwellover1.5yearsnow,isrunningatfullcapacity. ToensurethatGlobalFoundriesremainscompetitiveagainstSamsungFoundryandTSMCinthelongrun,SunjayJhaobtainedIPanddevelopmentteamsfromIBM(alongwithtwofabsandalotofobligations),andpouredinbillionsofdollarsindevelopmentofthe7LPfabricationtechnologyplatform.Thelatterwouldincludethreegenerationsofmanufacturingprocessesand,possibly,acustomhigh-performancetechnologyavailableexclusivelytoIBM.Whileeverythingappearedtoproceedsmoothlywiththe1stGen7nmprocess(DUVonly),the2ndGen7nmprocess(withEUVusedfornon-criticallayers,suchaspadding)stillneededsomeadditionaldevelopmentinvestments,andthe3rdGen7nm(withintensiveusageofEUV)requiredevenmoremoneyfordevelopmentandfurthercouldrequireinstallationofadditionalEUVequipment.Meanwhile,thereweretwothingstoconsider. First.IfGlobalFoundrieskicksoffproductionusingthe1stGen7nmfabricationprocess,itwouldhaveneededtocureallofitsteethingtroublesandofferitsclientsaroadmapforward.Thelatterwouldhaveincluded2ndGenand3rdGen7nm,butnothingstopsthere.Customerswouldhaveaskedfor5nmandthenfor3nmnodes.Meanwhile,youcannottellyourclientsthatyouarepackingupafteracertainnodeandthenhopethatthisnodewillbeasuccess(thesameistrueforDUV-only1stGen7nm). Second.Developmentofleading-edgeprocesstechnologiesisextremelyexpensive.Everynewnoderequiresbillionsofdollarsininvestments.Thosecostsareeventually amortizedovereachchipthecompanymakes,sotokeepincreasingR&Dcostsfromdrivingupchipprices,foundriesneedtoproducemorechips.Tomakemorechips,theyneedtoeitherrunmultiplefabsthatusethesameprocesstechnology(thesearegoingtocost$10+billionintheEUVera),orbuildgiantfabsthatprocessagargantuannumberofwafers(thesearegoingtocost$20+billionintheEUVera).Meanwhile,GlobalFoundrieshasonlyoneleading-edgefabfeaturingcapacityof60,000waferstartspermonth.Asaresult,eitherGlobalFoundrieshastopasstheseR&Dcostsontothefinitenumberofwafersitprocesses–andbecomeuncompetitiveagainstrivalsintheprocess–oreatthecostswithreducedprofitability. Meanwhile,havingspentwellover$20billiononGlobalFoundriesoverthelast10years,Mubadala,theownerofthecompany,isnotinclinedtolosemoremoneyorinvesttensofbillionsinthehopesofbecomingprofitableoneday.TheinvestorwantsGlobalFoundriestostopbleedingandstartgeneratingprofits. “Thecultureof[ourinvestments],theonesI’vebeeninvolvedwith,wasaboutaccumulatingassetsandthenjustmaintainingit,”saidMubadalaCEOKhaldoonAlMubarakinaninterviewwithBloombergearlierthisyear.“Theshiftthathashappenedoverthelastcoupleofyears,thatI’vetriedtopushatMubadalatoday,isamonetizationstrategythatmakessense,notwithaviewtocashoutbutwithaviewtoreinvest.” GaryPattonadmitsthatGlobalFoundriesneverplannedtobealeadingproducerof7-nmchipsintermsofvolume.Furthermore,thecompanyhasbeenseeingincreasingadoptionofits14LPP/12LPtechnologiesbydesignersofvariousemergingdevices,keepingFab8busyandleavingfewerstep-and-scansystemsfor7LPproducts. Withoutanotherbigfab,itwouldbeimpossibletomakeanynewleading-edgeprocesstechnologycompetitiveagainstSamsungandTSMCduetoaforementionedscalereasons.Meanwhile,buildinganewfab(orevenexpandingtheFab8withanothercleanroommodule,whichissomethingthatGFconsideredseveralyearsago)andcreatinganothernodeortwowouldrequireanother$10–$15billionfromMubadala,whichisnotinclinedtoinvestjustnow.Asaresult,theGlobalFoundrieshasdecidedtoswitchentirelytospecializedprocesstechnologiesforemerginghigh-growthmarkets.ThisstrategicshiftenablesittoreducespendingonR&D,slowdownprocurementofnewequipment,reduceitsworkforceby5%(mostofwhichwillbeinMalta),andpotentiallyavoiddirectcompetitionagainsttheaforementionedcontractmakersofsemiconductors. What’sNextforGlobalFoundries? 7LPCannedDuetoStrategyShift What’sNextforGlobalFoundries? GlobalFoundriesPressRelease Tweet PRINTTHISARTICLE PostYourComment Pleaseloginorsignuptocomment. POSTACOMMENT 127Comments ViewAllComments NuclearArmament-Monday,August27,2018-link Thisisstupid,stoptryingtomilksiliconbeyond11nmandstartusinggalliumarsenideorindiumgalliumarsenide.TheFujitsuAP2000usedBiCMOSandGaAsfabricationbackintheearly1990s,forcryingoutloud.Getridofsilicon,it'soutdatedandneedstobereplaced!YouhaveBILLIONSofdollarsandgetgovernmentsubsidies,whynottakearisk?! Reply rahvin-Monday,August27,2018-link TheonlyproblemofcourseisthatGalliumbasedSemi'sareabout100Xtothecostwhichiswhynooneusesthemforanythingoutsidecertaincategorieswherethecostisjustifiable. Reply Khenglish-Monday,August27,2018-link iii-vmaterialscanalsoonlyresultinn-channelHFETsorNPNBJTs.Youcan'tmakeanactivepull-updevice,whichisrequiredforanyVLSIuse.Onlyveryhighpowerresistivepull-uporcurrentsteeringlogicispossible. Reply evanh-Monday,August27,2018-link Pricebyitselfdoesn'texplainthewhy.Priceisonlyanoutcomeduetolackofvolumeproduction.Thisistrueforanymassproducedproduct.Khenglishgivesarealreason. Reply rahvin-Monday,August27,2018-link Priceismorethanvolumeproduction,thematerialsarefarmoredifficulttoobtain,purifycombineandhandlethansiliconandfrequentlyinvolvehighlytoxicchemicals.Siliconontheotherhandrequiresanenormousamountofenergybutdoesn'tinvolvetoxicchemicalprocessing.TakealookatthewikiarticleandtheprocessestoproduceGaAscyrstals,it'snotsimple.https://en.wikipedia.org/wiki/Gallium_arsenide Reply evanh-Tuesday,August28,2018-link Noneofwhichmakesitexpensive. Reply SirPerro-Tuesday,August28,2018-link LetmeresumeSiliconpropertiesfromwikipedia...-Abundantandcheap-Haseconomiesofscalesonitsside-Verystableandcangrowtohighdiameterswithgoodyields-Verygoodthermalconductorfordenselypackedtransistors-Itsnativeoxideworksverywellasinsulatorwithexcellentelectricalproperties-HasmuchhigherholemobilitywhichenablesCMOStransistorswithmuchlowerpowerconsumption-Isapureelement,avoidingtheproblemsofstoichiometricimbalanceandthermalunmixingofGaAs-Ithasanearlyperfectlattice,impuritydensityisverylowandallowsverysmallstructurestobebuiltAndGalliumArsenidedrawbacksinclude...-Naturally,GaAssurfacecannotwithstandthehightemperatureneededfordiffusion-GaAsdoesnothaveanativeoxide,doesnoteasilysupportastableadherentinsulatinglayer,anddoesnotpossessthedielectricstrengthorsurfacepassivatingqualitiesoftheSi-SiO2-BecausetheylackafastCMOSstructure,GaAscircuitsmustuselogicstyleswhichhavemuchhigherpowerconsumption;thishasmadeGaAslogiccircuitsunabletocompetewithsiliconlogiccircuits-Problemsofstoichiometricimbalanceandthermalunmixing-GaAshasaveryhighimpuritydensitywhichmakesitdifficulttobuildintegratedcircuitswithsmallstructures,sothe500nmprocessisacommonprocessforGaAsSoyouknow,usuallystatementslike"Thismultitrilliondollarindustryiswrong,whattheydoisstupid,theyshoulddoX"comingfromrandomdudesontheinternetarebullshit. Reply FunBunny2-Tuesday,August28,2018-link "Soyouknow,usuallystatementslike"Thismultitrilliondollarindustryiswrong,whattheydoisstupid,theyshoulddoX"comingfromrandomdudesontheinternetarebullshit."yeahbutDearLeaderhasdonethatforalifetime,andlookwhereitgothim.:) Reply evanh-Tuesday,August28,2018-link Mysoleargumentiseconomiesofscaleiswhatdefinesthecost. Reply MikewindDale-Monday,July19,2021-link Andyourargumentiswrong.Economyofscaleisonefactorthatdeterminescost,butitisnottheonlyfactor.Ifeconomyofscaleweretheonlydeterminantofcost,thenwewouldexpecteveryproducttobeproducedbyasinglemonopolist,withasinglefactory.Anytimethereweretwocompetingfactories,theycouldreducetheircostsbybuildingasinglefactoryoftwicethesize.Theresultwouldbethateveryproductonearthwouldbeproducedinasinglefactory,ownedbyasinglecompany.Butthat'sobviouslynotthecaseintherealworld. 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