AMD's market share of X86 APU and server processors has steadily increased this year, and GPU are in short supply. AMD has decided to mass-produce 7-nanometer APU and GPU orders at TSMC in the first half of next year in order to consolidate its production capacity for next year and the following year.
AMD's 28-nanometer APU and GPU before 2014 were mostly manufactured by TMSC. In 2015, the 14-nanometer APU and GPU were manufactured by GlobalFoundries. Therefore, although TSMC actively sought AMD's 16-nanometer orders in 2017, the main product orders from AMD are almost zero.
AMD introduced a new generation of Polaris-based GPU last year. The market reaction was not good. The main reason was that they were limited by the 14-nm production capacity of the wafer foundry GlobalFoundries and could not be delivered quickly in large quantities. When AMD's GPUs were released after rival NVIDIA launched the Pascal architecture GPU with TSMC's 16nm process. The result is that AMD lost market opportunities due to capacity constraints.
AMD has launched a series of Zen-based Ryzen processors and EPYC server processors this year. Currently, it seems that sales are booming. The new Vega architecture GPU have also received favorable comments from the market. However, the biggest problem AMD now facing is whether GlobalFoundries can support the 14-nm production capacity required by AMD. According to industry sources, GlobalFoundries has no plan to expand its 14-nm capacity in recent years. According to this situation, AMD's APU and GPU may be get shortage supply in the second half of the year.
In the supply agreement modified by AMD and GlobalFoundries in the third quarter of last year, there was a clause allowing AMD to purchase wafers from wafer foundries other than GlobalFoundries. In order to get wafer from other wafer foundries, AMD paid 100 million dollars in cash to GlobalFoundries as a cost. In other words, AMD can seek production support from other wafer foundries from then, and TSMC is naturally the first choice for AMD.
