GlobalFoundries to Acquire MIPS

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.

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

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

>> 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?

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-...

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.

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.

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.

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.

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

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.

> 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.