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BCP-621 IBM Exam Questions

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Why IBM Is Suing GlobalFoundries Over Chip Roadmap screw ups

The tight linkage between chip designs and chip manufacturing techniques has brought about its share of havoc within the IT sector, and it's getting worse as Moore’s legislation has slowed and Dennard scaling died a decade ago. Wringing greater performance out of gadgets whereas making an attempt to hold a lid on energy draw is inflicting a number of difficulty as chip makers are trying to boost the state of the art. When there are screw ups to meet chip system goals set by using the foundries of the realm, chips force off the roadmap web page and smash on the floor.

Nothing demonstrates this greater than Intel’s own considerations with bringing a ten nanometer chip etching process to market in the past five years, which has allowed room for AMD to re-enter the server CPU market with gusto and which has stored Intel from being as aggressive with GPU and FPGA accelerators as it could have in any other case been. however Intel has been far from the handiest disappointment, curiously.

Publicly, IBM gave the impression to shrug off disappointments with former foundry accomplice GlobalFoundries, which changed into presupposed to take over the delivery of 14 nanometer technologies for IBM vigour and z processors and convey 10 nanometer and smaller chip etching recommendations as part of a ten-year settlement inked in October 2014 and closed in July 2015. beneath that settlement, IBM very nearly gave GlobalFoundries its Microelectronics division, which made all types of processors, including these for Sony, Microsoft, and Nintendo game consoles in addition to IBM’s server CPUs and a slew of chippery for all types of consumers, including the us executive. as it seems, IBM did shrug off the delays in getting 14 nanometer chips out of the fabs – our remark is that they have been a few year late with Power8 – but IBM has interestingly been seething for years concerning the spiking of the 10 nanometer system, which the general public did not learn about unless they related some dots, after which the spiking of the 7 nanometer technique, which was accomplished all at once in August 2018. This left massive Blue with no server roadmap, virtually. And now, IBM wishes as a minimum $2.5 billion in damages.

The lawsuit, filed within the big apple Supreme court on June eight, has not yet been made public on that court docket’s programs, but we got our palms on a closely redacted version and you may download the PDF file here. The GlobalFoundries response, which got here out earlier than any individual turned into aware about the IBM lawsuit and a day before IBM filed the lawsuit, has been made public and might be found at this link.

This condition is messy for IBM and GlobalFoundries: technically, economically, and emotionally. but when the issues that IBM is alleging in its lawsuit are genuine, then this could be a textbook case of how a foundry partnership can go dangerous.

essentially the most glaring query is: Why is IBM doing this now? It has been nearly six years seeing that GlobalFoundries pulled the plug in its 10 nanometer efforts, and virtually three years considering it pulled the plug on 7 nanometer methods and even smaller transistor shrinks. however as IBM is winding down its Power9 and equipment z15 servers and is no longer as dependent on GlobalFoundries as it has been in prior years – the company picked Samsung Electronics as its foundry companion within the wake of the GlobalFoundries spike and is etching its future Power10 and z16 CPUs the use of the Korean chip maker’s 7 nanometer approaches – big Blue has determined it wishes delight.

The timing is slightly suspect, specially with rumors swirling round about Mubadala investment business, the funding arm of the oil producing nation of Abu Dhabi and the proprietor of GlobalFoundries, getting ready to file an preliminary public providing this year on a stock market in the united states. That IPO is projected to be worth $20 billion to $30 billion, thanks in big part to the semiconductor scarcity that IBM cannot advantage from because it has now not been a foundry on the grounds that July 2015.

twist of fate is a true thing in the world, and it's likely a accident that a global scarcity in semiconductor manufacturing – on advanced nodes or old ones – is what is assisting to make GlobalFoundries valuable just as IBM doubtless has all the wafers it should fulfill Power9 and z15 orders invariably. That’s why it is happening now. As for why it's happening at all, that’s a an awful lot extra complex situation, and it is important to remember that claims and counter claims in court cases are not statistics until a jury and choose determines them to be so – and maybe not even then.

IBM gets Out Of The Foundry enterprise

lower back in 2013 and 2014, IBM was in a single of the divesting moods it periodically gets into. It bought off its system x X86 server enterprise to Lenovo and “sold” the Microelectronics division to GlobalFoundries, which itself was spun out of AMD in October 2008 and prior to now augmented with the chip making enterprise Chartered Semiconductor. All three of those chip organizations together, plus a research and development agreement with IBM and its other companions on the core for Semiconductor research at the State college of ny’s Albany NanoTech complicated. these days, both Samsung and now Intel are contributing to and benefiting from that analysis, presumably together with IBM’s leap forward 2 nanometer chip approaches introduced closing month. the primary 7 nanometer after which the primary 5 nanometer CPUs on this planet have been etched there, so this is functional research that helps foundries get chip finished.

As part of the Microelectronics deal, GlobalFoundries acquired itself a portfolio of around 16,000 patents and patent applications, which is a vital shelter against litigious rivals, in addition to two by and large old-fashioned foundries – one in East Fishkill, manhattan and the different in Essex Junction, Vermont – and round 5,000 employees who design chips and run foundries. huge Blue saved a small crew of people to design its vigour and z processors and a few of the americans at IBM analysis working on semiconductors. IBM agreed to pay GlobalFoundries $1.5 billion over three years to put money into 14 nanometer and 10 nanometer procedures and took one more $3.2 billion in writeoffs. In 2013, Microelectronics had $1.four billion in earnings, but had a pre-tax loss of $700 million, so you can be aware why big Blue wanted out. every new manner reduce was going to be increasingly painful and more and more costly and IBM just didn't have the sort of scale that GlobalFoundries had hoped to construct. IBM’s lawsuit contends that GlobalFoundries became not able to constructing “high efficiency” chips, which is ludicrous on account that AMD changed into perfectly in a position to building market-leading Opteron CPUs for servers and Radeon GPUs for pix and visualization lengthy earlier than this deal turned into achieved.

what is reasonable to say is that GlobalFoundries needed to retain the AMD enterprise and adding IBM’s business to it could aid it snowball CPU, GPU, and other accelerator business to more advantageous take on Intel, Taiwan Semiconductor Manufacturing Corp, and Samsung for customer and server constituents and different ASIC manufacturing and packaging. IBM’s foundries have been no longer really helpful for the long run, however the cash and the people definitely were. in fact, Thomas Caulfield, the current chief govt officer at GlobalFoundries, ran the Fab8 foundry constructed through GlobalFoundries and ran the East Fishkill foundry at IBM from 1989 through 2005 earlier than dabbling in venture capital and startups for a long time before becoming a member of GlobalFoundries.

The crux of IBM’s lawsuit is that GlobalFoundries promised to bring 10 nanometer strategies after which modified it to 7 nanometer techniques – and did neither. To hedge its bets, GlobalFoundries took a twin course to 7 nanometers, one using general immersion lithography and one more the usage of intense ultraviolet (EUV) lithography. The latter is a technique that TSMC acquired appropriate first, Samsung is perfecting now, Intel is working on and has had some concerns, and GlobalFoundries did not observe via with at the 7 nanometer node. GlobalFoundries most likely killed its 7 nanometer efforts because it already knew that AMD changed into going to TSMC for at least one of the chips interior the “Rome” Epyc 7002 and “Milan” Epyc 7003 server processor programs. We know that AMD determined to pass over the 10 nanometer node, which may also have additionally played into the choice through GlobalFoundries to now not invest in it although its contract with IBM explicitly referred to it could do just that. without the enormously high volumes of AMD server chips, IBM’s server chips would not have paid the bills on the sizeable funding. We don’t know what the numbers are, however the identical math held actual at Microelectronics when IBM determined to put off it.

What we don’t be aware of is if AMD determined to hop over 10 nanometer procedures to 7 nanometer methods to get an facet on Intel or if it definitely had no choice to do so as a result of GlobalFoundries become pulling the plug to focus on its dual-prong 7 nanometer effort. We feel AMD changed into hit by the equal 10 nanometer surprise that IBM become, however AMD certainly not talked about anything else about that and put the top-quality spin on it. a lot as IBM did with the difficulties that GlobalFoundries curiously had bringing 14 nanometer processes and IBM by no means mentioned an awful lot at all about 10 nanometer concerns. AMD, of path, used 14 nanometer approaches from GlobalFoundries for its first era “Naples” Epyc 7001 chips and still uses 14 nanometer procedures in the I/O and memory hub at the heart of the Rome and Milan server processor applications. The Rome and Milan cores are etched with the aid of TSMC in 7 nanometers, and Infinity textile hyperlinks hook hub and the cores together in a single package.

The lengthen with the 14 nanometer strategies and the stoppage of 10 nanometer strategies is obvious within the IBM vigour roadmaps. Take a look at this vigour processor roadmap from a few years in the past:

saying that Power9 shipped in 2017 is beneficiant, since it turned into handiest low volumes of CPUs for the “Summit” supercomputer at very wellRidge national Laboratory and the “Sierra” supercomputer at Lawrence Livermore national Laboratory. It took IBM all of 2018 to absolutely ramp programs based on the Power9 chip that become etched the use of GlobalFoundries 14 nanometer procedures.

we can’t prove this, but we suppose the common plan from IBM changed into to shrink to 10 nanometers with Power10 and create a dual-chip module chiplet to push it as much as 48 cores. We also feel IBM definitely wanted to get this out the door in 2020 and stick with it the three-year cadence it likes with its server structures. IBM says that the first rumblings that the 10 nanometer procedure changed into in hindrance got here in September 2015, best two months after the Microelectronics deal became inked, and by means of December 2015, GlobalFoundries spoke of it will not do it. IBM alleges “upon assistance and belief” that GlobalFoundries knew it was going to do this earlier than the deal closed.

IBM says it never launched GlobalFoundries from the 10 nanometer dedication, however worked “in respectable religion” on the building of a 7 nanometer chip. This, we presume, changed into the shift we now see from a Power10 based on 24-core chiplets to a Power10 with a radically new core with sixteen physical cores per chip but 15 or 30 fats or skinny cores per chiplet and 30 or 60 cores per equipment – the one that Samsung is at present slated to fabricate later this year for huge Blue:

based on IBM’s suit, GlobalFoundries said in the fall of 2016 that it will have a 7 nanometer look at various chip ready within the second quarter of 2017, pilot construction in the first quarter of 2018, and quantity construction within the third quarter of 2018, and alleges additional that “GlobalFoundries many times represented to IBM that the 7nm chip GlobalFoundries would strengthen could be an satisfactory change for the 10nm chip it had promised.”

Given this, IBM reduce the check for the closing $250 million traunch in the $1.5 billion in money it promised as part of the Microelectronics division switch, and says that through 2017, it had invested at the least $188 million in resources to help GlobalFoundries in this 7 nanometer effort. at present, GlobalFoundries become ramping the 14 nanometer technologies used with the Power9 and z13 chips – which large Blue says “turned into area to tremendous delays and issues related to efficiency and satisfactory” – and Caulfield, who became made CEO in July 2018, allegedly advised IBM that it may move through with 7 nanometer development if IBM paid an additional $1.5 billion. with the aid of August, IBM demanded that GlobalFoundries return the $1.5 billion, which the chip maker balked at, undoubtedly, and through the end of the month GlobalFoundries publicly introduced it become suspending its 7 nanometer efforts, together with both water immersion and EUV lithography suggestions and would center of attention on 14 nanometer and older applied sciences.

whereas the two agencies have been bickering from side to side about what their agreement meant and no matter if or now not it had been breached, GlobalFoundries sold off the East Fishkill fab to ON Semiconductor for $430 million in April 2019 and bought its customized ASIC business to Marvell in may additionally 2019 for $650 million with an further $90 million probably coming in, after which sold off another assets that IBM says tally up to $1 billion and which in fact ensured that GlobalFoundries could not make respectable on its 10 nanometer criminal commitments and seven nanometer promises. here is a stretch. The 7 nanometer stuff was performed within the Fab8 manufacturing unit in Malta, manhattan. we now have considered it with our personal eyes. IBM can’t switch assets as a part of a deal after which get mad when the “buyer” decides to promote.

IBM can actually be upset, and are seeking financial damages, if GlobalFoundries promised chip fabbing and didn’t convey. The case is challenging to make with 14 nanometers, given that chips did get out even if later than expected as appears to be the case, however is effortless to make with the 10 nanometer and 7 nanometer spikes. These in reality brought about IBM to rewrite its power and equipment z processor roadmaps and in reality led to delays in deliveries of advanced know-how. We haven't any concept how a whole lot all of this change undermined IBM’s bids for the successor “Frontier” exascale gadget at all rightRidge or the “El Capitan” exascale gadget at Lawrence Livermore, however could not have helped. (We think a lot of other elements were at play there.)

still, lawsuits are about recovering financial hurt. It will be challenging for a jury to do the math on what it might be, however adding the $1.5 billion that IBM gave GlobalFoundries as a part of the Microelectronics switch and then the $1 billion or in order that GlobalFoundries received from promoting off belongings collectively isn't a enough system to calculate the economic damage during this case.

We desired to get some type of commentary out of IBM, but given this is a lawsuit, what we acquired become this observation from an IBM spokesperson: “IBM depended on GlobalFoundries after investing heavily in an extended-time period mutual relationship. GlobalFoundries spoke back by taking IBM’s funds, and benefitting from IBM’s competencies, skill and assets. though GlobalFoundries many times assured IBM that it could meet its commitments, GlobalFoundries as a substitute suddenly and with none justification walked away from IBM whereas IBM become reliant on GlobalFoundries. GlobalFoundries has demonstrably failed to act as a reliable accomplice and organisation.”

“you could locate more advantageous, but that you could’t Pay greater*”

GlobalFoundries, in its response, is unequivocal concerning the circumstance. “This motion arises out of what appears to be a misguided and unwell-conceived effort by IBM’s legislation branch to are attempting to extract an outlandish fee from GF that IBM knows it is not entitled to,” its felony response begins. “IBM’s timing isn't simplest particularly suspect as it comes on the heels of lately said news of a possible preliminary public offering (“IPO”) by way of GF that could cost it at about $30 billion, however also totally inconsiderate of latest hobbies, namely a world chip scarcity fueled by using a plague that has impacted vital domestic industries, together with the automotive sector.”

GlobalFoundries says that it spent the $1.5 billion IBM gave it investing in the foundry company, and then spent “way over this amount” itself extra investing. while here is a provable and calculable figure, it became not given in the response. GlobalFoundries also alleges that IBM at the same time agreed to forego the 10 nanometer node and purse the 7 nanometer node. but given “the technical complexity and large fiscal cost” of the 7 nanometer effort, GlobalFoundries couldn't carry 7 nanometers on the timeline set. (We consider at a cost that GlobalFoundries would or could bear as neatly.) on the grounds that others had 7 nanometer techniques, GlobalFoundries “opted no longer to place itself in critical monetary stress through the persisted pursuit of a failing strategy and as a consequence ceased setting up 7nm technology,” and “IBM right now discovered a new, and less expensive, 7nm technology employer in Samsung.” IBM, GlobalFoundries contends, truly benefitted from GF’s decision to stop working on 7 nanometer technology.

IBM might have gotten to 7 nanometers quicker this way, but it surely certain could have used Power10 a year or greater ago in response to 10 nanometer expertise. IBM doesn’t say that in its submitting, however we are announcing that. And if there's any financial damage, that’s it. device z consumers don't seem to be itching for potential within the equal means. but the HPC market, and primarily hybrid CPU-GPU machines the place the CPU has a lot of I/O and reminiscence bandwidth, and maybe a memory enviornment network as Power10 has, obviously might have already used those Power10 processors. maybe it may had been chosen within the DGX-2 equipment, definitely. This has to be part of any calculation of economic hurt, if any is to be made.

This lawsuit by way of IBM isn't frivolous, possibly, however actually is opportunistic and disruptive to GlobalFoundries. but when it does proceed to trial, the damages will not be any place near the general public go with the flow of GlobalFoundries stock, and the chip maker will take the hit and maybe even get on with establishing extra superior procedures as a foundry of its stature and heritage should.

*be aware: noted quote from an IT manager within the Wall road Journal within the 1990s talking about an IBM that became struggling.


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