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Yes, I follow this IBM semiconductor manufacturing division spinoff from the beginning. The exact contract requirements and clauses are secrets between IBM and Globalfoundries. One big question is what IBM and Globalfoundries should get or be obligated from the $1.5 billion payment. It's not as simple as a prepayment for 10nm or 7nm.
IBM knew it otherwise there should have a penality imposed on GF clearly spelled out in the contract between IBM and Globalfoundries.
IMO, IBM's volume is just too small to ask GF (or even Samsung) to do something extraordinary.
Do you think GF knew the IBM volumes were when they signed the $1.5B contract ? (it's not complicated) If GF couldn't do it -- why sign the contract?
You could also google Lisa Su's/AMD's statements from back then. Publicly AMD said they were very bullish on committing to GF & their 7nm process. (but behind the scenes they had to be working with TSMC)
The lawsuit hasn't been thrown out yet -- so clearly there was some responsibility on GF to deliver 7nm parts to IBM. (or it would have been tossed already).
One of GF's responses to the lawsuit is "IBM should have known we couldn't deliver the 7nm parts." (it is somewhere in the legal documents) That is really weak.
FYI -- IBM has deep pockets and relationships with the best lawyers. (but this could take many years) I'd guess GF will settle at some point.
Do you think GF knew the IBM volumes were when they signed the $1.5B contract ? (it's not complicated) If GF couldn't do it -- why sign the contract?
You could also google Lisa Su's/AMD's statements from back then. Publicly AMD said they were very bullish on committing to GF & their 7nm process. (but behind the scenes they had to be working with TSMC)
One of GF's responses to the lawsuit is "IBM should have known we couldn't deliver the 7nm parts." (it is somewhere in the legal documents) That is really weak.
FYI -- IBM has deep pockets and relationships with the best lawyers. (but this could take many years) I'd guess GF will settle at some point.
By receiving this $1.5 billion, was Globalfoundries obligated to make 7nm ready for IBM? Do we know exactly what this $1.5 billion for?
This old IBM semiconductor manufacturing division didn't have strong competitive edge and was a big money losing operation that no one wanted to pay IBM for it.
Back then the news circling around the IBM/GF deal was that IBM threw $1.5 billion to convince GF to take over the IBM's semiconductor manufacturing division. I don't think there's a black and white contract penality protection for IBM or clearly stated that this $1.5 billion is a "prepayment" from IBM. Otherwise this legal battle should have been resolved a while ago.
IBM might feel it's unfair to them. But I'm wondering why IBM thought a much smaller Globalfoundries can fix a division that IBM couldn't manage successfully and had no interest to keep it.
When it comes to corporate intrigues the finer details will only ever be known by the participants and who they choose to reveal it to. Though perhaps the popularity of honest memoir writing will increase in the future…
Remember, AMD was the foundry when this saga began. It had a partnership on technology sharing with IBM and Samsung. But it wanted to separate the foundry since the business models were not aligned at many levels (which is where Intel is today). IBM was using AMD as a foundry for Power and needed some stuff no-one else was making, for example the embedded DRAM that IBM liked and GF had mastered.
So in order to facilitate the split an investor was found to buy the new GF, and IBM kicked in 1.5B to keep their tech going which sweetened the deal showing an anchor customer other than AMD who would continue buying CPUs from them. That was around the 28nm node with work in progress to build out 16nm, which worked out well.
After a few years of freedom AMD started to explore TSMC for 7nm (where they became a bleeding-edge customer using the very earliest PDK for the CPU tiles). GF still had the 16nm business for the IOD but it must have known it lost the 7nm since AMD would have been backing out of the prep work. Also it had no line of sight to getting EUV for anything better than 7nm- competing for the leading edge was a dead end. So it rethought its business and pivoted to specialties in the DUV range, which so far looks like a smart decision. IBM simply was not big enough client to finance a 7nm line.
Did this break the IBM contract associated with the 1.5Bn they put in for GF to be floated? Lawyers will decide. AMD were free, and GF had to do what they did. It is possibly less pain to IBM than if GF tried to muddle through, but of course that may be little concern to whatever was in the contract. Which we will likely never see.
Remember, AMD was the foundry when this saga began. It had a partnership on technology sharing with IBM and Samsung. But it wanted to separate the foundry since the business models were not aligned at many levels (which is where Intel is today). IBM was using AMD as a foundry for Power and needed some stuff no-one else was making, for example the embedded DRAM that IBM liked and GF had mastered.
