GlobalFoundries to Acquire MIPS

GF's fabs aren't that old. They were neck-and-neck with TSMC until 02018, when they could do 12nm: https://web.archive.org/web/20190107061855/https://www.v3.co...

Imagine canning your 7nm process last minute only few years before the chip shortage.

Must be the most moronic decision ever.

and it's not like 20/20 hindsight either, because every hardware enthusiast knew at the time Intel was having troubles and was worried TSMC (and Samsung at the time) were going to be the only fabs producing leading edge lithographies.

I think it would require some work to call it a “moronic decision.” My suspicion is that even if they could see the future and predict that shortage, 7nm by 2020/2021 was not on the table for them.

These nm values are really bullshit anyway, but the tech node that was supposed to be Intel’s 7nm, which ended up being called “Intel 4” (because they branded some 10nm tech as Intel 7), only came out in like 2023. Given they Global Foundries was always behind Intel, suddenly leapfrogging them by 2-3 years would be quite a feat.

Oh no, it is a moronic decision and everyone thought so even then. It was a competitive process, they said volume production was due in late 2018 and they canned it at the very last minute citing it financially not feasible. You can read details at this news article (https://www.anandtech.com/show/13277/globalfoundries-stops-a...) or thousands of forum discussions regarding the news. No need to even look that far, just skimp the discussions on the forum topic below the news article I linked and it was plain as a day to anyone what would happen.

> These nm values are really bullshit anyway, but the tech node that was supposed to be Intel’s 7nm, which ended up being called “Intel 4” (because they branded some 10nm tech as Intel 7), only came out in like 2023. Given they Global Foundries was always behind Intel, suddenly leapfrogging them by 2-3 years would be quite a feat.

This is a very weak argument. Intel was ahead of everyone, now everyone is ahead of Intel. Remember TSMC's blunder processes like 20nm? How they turned around after that? Or how GloFo has had always mediocre processes but they finally hit the nail in the head with their 14/12nm? Fab business has always had companies leapfrogging each other, it turns out the worst sin is not trying. GloFo's greedy investors chose to bury the business in the ground for their short term profits.

Its odd all these MBAs and few in the tech space appear to know that when a technology company stops investing in the future they are done. It might take 20+ years for that to happen but it will. Sure, stretch the timeline for the next node/product/etc but _NEVER_ stop pushing the enveloper because if you can't invest in it now, you won't be able to in a few years time when your resources are even more constrained as your customer base dwindles, or your technology becomes more commoditized or simply left behind as companies that did invest no longer have a need for their older products/lines.

Might not be the investors, might be squarely management's fault. A lot of investors are pretty passive.

I thought it was a bad decision at the time, but it does seem like a defensible one to me, for three reasons.

First, nobody knew if even TSMC was going to succeed at bringing a 7nm process to market. 02018 was maybe the height of the "Moore's Law is over" belief. There was a lot of debate about whether planar semiconductor scaling had finally reached the limit of practical feasibility, although clearly it was still two orders of magnitude from the single-atom physical limit, which had been reached by Xie's lab in 02002. Like Intel, SMIC didn't reach 7nm until 02023 (with the HiSilicon processor for Huawei's Mate60 cellphone) despite having the full backing of the world's most technically productive country, and when they did, it was a shocking surprise in international relations with the US.

Second, even if GF had brought 7nm to market, there was no guarantee it would be profitable. The most profitable companies in a market are not always the most technically advanced; often the pioneers die with arrows in their backs. If you can make 7nm chips in volume, but the price for them is so high that almost everyone sticks with 12nm processes (maybe from your competitors), you can still lose money on the R&D. Moore's Law as originally stated in "Cramming" was about how the minimum price per transistor kept moving to smaller and smaller transistors, and historically that has been an immensely strong impetus to move to smaller processes, but it's clearly weakened in recent years, with many successful semiconductor products like high-end FPGAs still shipping on very old process nodes. (Leaving aside analog, which is a huge market that doesn't benefit from smaller feature size.)

Third, we don't know what the situation inside GF was, and maybe GF's CEO did. Maybe they'd just lost all their most important talent to TSMC or Samsung, so their 7nm project was doomed. Maybe their management politics were internally dysfunctional in a way that blocked progress on 7nm, even if it hadn't been canceled. There's no guarantee that GF would have been successful at mass production of 7nm chips even in a technical sense, no matter how much money they spent on it.

In the end it seems like GF lost the bet pretty badly. But that doesn't necessarily imply that it was the wrong bet. Just, probably.

> It was a competitive process

Do you have any evidence, besides GF's own PR/IR department, that the process ever actually worked in volume? Because from my point of view, how they ended things looks exactly how I would spin away a multibillion-dollar investment into a failed process.

>Imagine canning your 7nm process last minute only few years before the chip shortage.

https://www.eetimes.com/samsung-globalfoundries-prep-14nm-pr...

"Samsung expects to be in production late this year with a 14 nm FinFET process it has developed. GlobalFoundries has licensed the process and will have it in production early next year."

GlobalFoundries licensed 14nm from Samsung. How do you know GlobalFoundries is capable of 7nm?

This was from 02014, btw.

GlobalFoundries didn't design their own 14/12nm process it was licensed from Samsung.

that's my point. how does OP know GlobalFoundries is capable of 7nm if they can't even do 14nm. do you have any insider info that you can share?

btw, what's with the leading zero here?

It's there to provoke your question

that's beside the point. The point is they executed it pretty well.

It's a meme that's supposed to get people to think in >4-digit timescales, apparently. Always makes me think of octal TBH

That was a huge gift to AMD since it let them use TSMC as for fabrication instead, and they gained a process node advantage over Intel for the first time in history.

My guess is that the guys in Abu Dhabi did not want to do the investments needed to bring 7nm into production. They lost a huge opportunity because of that. At the time, it probably looked like the right financial decision to them, even though practically everyone affected downstream thought it was myopic.

>> Fab business has always had companies leapfrogging each other, it turns out the worst sin is not trying. GloFo's greedy investors chose to bury the business in the ground for their short term profits.

Name company making chips with EUV that is not TSMC, Samsung, or Intel?

I agree, and I wrote a longer comment agreeing with your point at https://news.ycombinator.com/item?id=44503245.

No I don't, but then, how bad it could be? As bad as Samsung's 8nm? Or Intel's 10nm? Even they delivered something in the end. What did GF deliver? A whole fucking nothing. Samsung had Nvidia and Qualcomm as their customers even with its, ehm, not so good 8nm process. It was a sure bet GF was going to have some customers as long as they delivered something (and I don't even count AMD's wafer supply agreement).

As far as I know, Global Foundries ceased efforts at 7nm and lower because they could not afford it.

They had previously signed a contract with IBM to produce silicon at these more advanced nodes that they could not honor, and there was legal action between them.

https://www.anandtech.com/show/13277/globalfoundries-stops-a...

https://newsroom.ibm.com/2025-01-02-GlobalFoundries-and-IBM-...

Intel struggled for years with their 7nm process to the point where they are now fabbing their latest ICs at TSCM.

Pursuing 7nm would have likely bankrupted GloFo.

What I remember from discussions at the time was they were going to tape out very soon and start building for mass production, then UAE fund noped when things got serious.

I know that, but I've brought it up anyway. It's irrelevant who they've licenced it from because they executed it god damn well.

It could be arbitrarily bad. 1% yields, 0.01% yields, 0.00001% yields. Having to write each wafer with an electron beam because they couldn't get EUV to work at 7nm.

First, you point out that Moore's law was about the transistor count per chip at the optimum cost process, and that's very important. We have transitioned from a more-for-less leading edge to a more-for-more leading edge. It's overall sensible for Apple to build giant chips on the newest processor not because it's cheaper but because it gives them an overall more competitive product (they only sell whole devices). Just because Apple and Nvidia keep making bigger chips doesn't mean that Moore's law is working the way it was originally proposed (Intel's marketing department notwithstanding).

In any case, at the time and still I think GF was probably correct in that they would not be able to compete at the leading edge and make money at it. Remember, AMD and IBM separated fabs out for a reason and not having the scale necessary to compete was probably a big part of that. AMD has succeeded on TSMC and IBM seems to be doing ok on Samsung. Most chips are not at the leading edge and don't need to be, and so most fabs don't need to be leading edge to serve customers. There are all kinds of applications where a more mature and better characterized process is better, whether for harsh environments, mixed signal applications, or just low volume parts where $20M of tooling cost is not worth it.

He's talking about AD 1036. Try to keep up

Best to just downvote it then.

Indeed. Consider it trolling, ignore it. It's just stupid.

It's "Long Now" stuff, which really should be called "Medium Now" because they're only using one leading zero.

kragen thinks making most of his readers glitch for a second every time they read one of his dates is worth it on order to advertise for the Long Now. Really unfortunate choice, since he often has decent information to share.

No I don't have insider info. Neither do you. What an ridiculous nit to pick.

3 company managed to do it, was there a law forbidding a 4th one from doing so?

It could be, but on the other hand it could be freaking fantastic, too. The only way we'd know if they've fucking did it, which is my point.

Since it didn't happen, the only thing we know is what they said and they said it was because of "strategic shift"

> Tom Caulfield also mentioned GF needed $3 billion dollars of additional capital to get to 12,000 wpm and they could only fund half of it through cash flow, they would have to borrow the other half and the projected return wasn’t good.

> When Tom took over as CEO he went out on the road and visited GF’s customers. What he found was a lack of commitment to GF’s 7 nm process in the customer base. Many customers were never going to go to 7 nm and of the customers who were, GF wouldn’t have enough capacity to meet their demands. There was also concern in the customer base that 7 nm would take up all the R&D and capital budgets and starve the other processes they wanted to use of investment.

(https://semiwiki.com/wikis/company-wikis/globalfoundries-wik...)

I think the proof of the pudding is in the eating: it's been seven years since the cancellation of 7LP. They have launched nothing even near the leading edge since 12LP+.

If 7LP worked, given this market and its hunger for capacity, it'd be in production at at least small scale. Equipment costs are down and knowledge has disseminated, making it a lot cheaper to launch, especially as "7nm" isn't the leading edge any more.

I don't think it works.

It does mean GF is on the path to long slow decline. The decision was not "we will wait 5-10 years" but "we will not develop any new processes".

I don't fault them for failing to predict the chip shortage and huge opportunity to acquire customers that would result. The fact remains: they will eventually fade away.

You're the one claiming it's the "most moronic decision ever".

The burden of proof is on you to support your claim that they could have executed a 7nm process profitably, as opposed to them looking at the data and coming to a rational conclusion that they couldn't.

Yeah, that was my reading at the time. But lots of companies have gone that direction, closing down major lines of business because they couldn't make money at them anymore. I mean, you probably remember this, but IBM used to make computers. Intel started out making RAM. HP used to make working products.

Right, it seems like kasabali is making claims that are considerably more absolute than they would be able to justify without insider info.

Intel changed their naming to reflect TSMC’s, as Intel 10nm had transistor densities close to TSMC’s 7nm.

> Imagine canning your 7nm process last minute only few years before the chip shortage.

What?

The chip shortage was a shortage of cheap but inferior 28nm, 40nm, 65nm and 80nm chips that GlobalFoundries was (and still is) well positioned to profit from.

This is a good point, but they weren't necessarily very cheap or inferior; they were just fabricated in larger process nodes, which for analog chips (as many of them were) doesn't imply inferiority.

I think they've over-corrected from the two digits are enough truncation that was common in computers between the 1950s and ~2000. It started to become less common then, but the phase out is arguably still going or stalled until things just die.

However OCTAL (leading zero) prefixing of a text mode number fails on a number of points:

* It's still a fixed register size (5 characters), which will overflow on the year 100000 AD.

* It's confusing, everyone else.

* It's not technically correct. (human behavior)

Truncating to two year digits was confusing because ambiguity. There is no ambiguity if a number encoded in decimal uses precisely the number of characters it needs. That's how normal humans normally write numbers.

IIRC, that's because Intel attempted it without EUV to save a handful of dollars.

In terms of years, not that old.

In terms of process, it's ancient.

I suspect the vast majority of chips made today are made at the 12nm process node or coarser, because I know of some surprising examples. Smaller process nodes are critical to the highest-performance digital chips, but a lot of chips aren't those.

Yeah and IBM had to move their designs in the last minute from GF to Samsung. I have heard that the Samsung process was much better and the tech transfer was easier than expected.

They signed a contract with IBM to manufacture their chips at 7nm (and reneged).

> The burden of proof is on you to support your claim that they could have executed a 7nm process profitably

Why the fuck I'd have to prove that given that GloFo themselves claimed that they pulled out of it because it'd be unprofitable? Some people in this subthread are very eager to put words into my mouth.

> I don't think it works.

Duh. Of course it doesn't work, because they cancelled it in 2018!

> making it a lot cheaper to launch, especially as "7nm" isn't the leading edge any more.

Same logic cuts both ways. If they didn't think it was financially viable in 2018 when it'd be a leading edge process and their customers would be willing to pay top dollar for it, why would they think it'd be feasible now when it isn't the leading edge lithography and nobody would be paying top dollar for it?

On top of that I doubt even your claim that it'd be cheaper to do the investment now would hold given how everything got more expensive since 2018. I'm also doubtful that machines got cheaper since ASML is still the only ones building them and they've probably got their hands full with their existing customers. They'd probably laugh at GloFo if they'd come with a request like that "Sorry GloFo, we're already booked until 2030 building machines for TSMC, Intel and Samsung maybe try at 2032" :P

GloFo got off the train and there's no going back.

Eh if humanity had to revert to 12nm nothing would noticeably get worse

Cellphones would, servers would, not much else.

I, personally, am not doing much with my phone i wasn't doing 10 years ago, which about lines up with a 16nm process. I think the camera is the only thing I'd really notice.

Well, and all the internet services you use via the phone going away. Not sure about 5G.

I don't really use much aside from apple music, which was buggy but was released almost exactly 10 years ago, and apple photos, which was already a thing. Google was already circling the drain, so I suppose that's a good point.

5G wasn't really that necessary, although I know it's critical as a broadband replacement for many people.

I would miss TikTok, of course.

Crudely speaking, industrial R&D has three phases: proof of concept, de-risking, and manufacturing. 7LP might (or might not) have passed the proof of concept stage. De-risking is usually the hardest stage (such that many people don't even consider it a stage, preferring to break it down into smaller stages). It is highly likely that this is where they decided to cut bait. (Incidentally, de-risking is usually heavy opex in the R&D department whereas HVM/NPI is mostly heavy capex; while "just" an accounting trick, this can be significant in many companies, and create a real barrier if the necessary opex spend is not palatable.)

The reason one would expect 7LP to be cheaper to launch now is that their competitors have got equivalent processes into production that can be learned from, or even "learned from" (ripped off). Equipment suppliers have debugged their offerings and pruned their lines to what's useful. In short, someone else has derisked it and found what works. That is a major advantage. In other industries, one company doing the derisking can launch an entire industry (see, Apple, iPhone) if moats are low. Moats are very, very, very high in the foundry space, so there are not many companies that could copy TSMC 7FF or Intel 7 even if they wanted to. GlobalFoundries could do it. But they choose not to. If they were on the cusp of a node introduction, they'd love to see their competition swoop in and solve the last problems for them. Sure, it makes them late to market, but at a vastly lower total spend to enter the market (one with tremendous moats and limited competition!). They could probably profit off that.

But they don't want to. So, either, leading-edge process nodes are uneconomical (in which case, good riddance, leave the market), or they don't actually have significant R&D effort completed and are still billions of dollars in R&D opex away from having anything viable. In which case... nothing of real value was lost.

So, yeah, it sucks that we lost a competitor. But I don't think we lost GF on the leading edge because they didn't like the color of paint on the new ion-implanter's frame. I think we lost them because they didn't have a product and they knew it. In which case there is nothing to mourn.