There are rumors going on about it AMD is considering switching its chip manufacturing to Samsung, Given that all of its recent successes, from Ryzen to Navi, have come from close partnerships with its current manufacturing partner, TSMC, this deserves our attention. But how likely is it really that it could ditch the Taiwanese chip maker, and what does it have for AMD?
As global semiconductor shortages continue to grow, major fabless companies—which don’t have the silicon manufacturing capacity of a company like Intel—are fighting over limited wafer capacity so that they can continue to sell products with volume. Apple is by far the largest company among these companies.
The staggering amount of money in the Cupertino company’s bank accounts means it is in line to take the limited capacity on offer from TSMC, leaving other fabless companies, such as Qualcomm, AMD and Nvidia, fighting over what’s left. are. AMD in particular, despite its apparent success, doesn’t really have big dollars to fight these big companies to guarantee a good enough chip supply. Also in the last day, news comes that AMD is raising the prices of its GPUs due to the increase in TSMC’s cost.
The way things are now, most current generation PC products (and consoles too) are sold out as soon as they arrive in stock. Terrible graphics card prices are a meme at this point, with DDR5 memory being ramped up at ridiculous prices and even motherboards continue to creep up in price due to component shortages. And that’s just on the supply side. The pandemic means more people work from home. They require PCs and laptops as their tablets and phones do not have the capability to deal with most of the workflow and multitasking. And with the lockdown and more time at home, we have more time to play games. This means we have a double whammy of supply and demand.
Companies know they have a rare opportunity to capitalize and make huge profits, but to do so, they also need reliable component suppliers. Taiwan-based TSMC, a leading supplier of many of the CPUs, GPUs and components that are critical for our PCs to run, is not the only chip manufacturer, even as it is one of the most technologically advanced at the moment.
AMD’s Zen 4 processor is rumored to be built on TSMC’s 5nm node. It is reported that the next generation Nvidia GPUs will also be made by TSMC and not Samsung. So Apple has ramped up much of TSMC’s advanced node production capacity, and with Nvidia joining the fight over what’s left, AMD may find itself squeezed by its more cash flush competitors.
This brings us to Zen 5. It’s a given that AMD will never partner with Intel. GlobalFoundries (AMD’s former fab division) and UMC aren’t trying to compete with TSMC on bleeding edge nodes, but Samsung is, and maybe AMD will partner with the Korean giant to build its future products to be specially positioned. If such a move happens, we are unlikely to see the fruits of the partnership for a few years. These decisions are made years in advance because the design of the CPU and the node on which it is built are pretty much tied together. You can be sure that Zen 5 development is well under way, so if such a move happens, the documents are probably already signed.
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We cannot ignore the current geopolitical tensions. The issue of China and Taiwan is not going to go away anytime soon, and it is certain that a global leader in manufacturing like TSMC is the pawn of the mind of Chinese and Taiwanese leaders. Relying on one manufacturer can be disastrous when the supply side suffers a setback. However, if the political situation worsens, the loss of TSMC output will make the current semiconductor shortage similar to the effect of a couple of burnt muffins at a Sunday cake stall.
Should AMD partner with Samsung, they would be neighbors. Samsung has announced the creation of a new $17B plant in Taylor, Texas Which is just a few kilometers by road from Austin, Texas. Guess who has a significant corporate presence in Austin? you guessed it. AMD.
While such a geographic link may turn out to be purely coincidental, the state-of-the-art mega foundry based in the United States won’t have to go far to find customers. AMD wouldn’t bet smart money against being one of them.