The Tesla-AMD-Global Foundries Deal: What We Know And Don’t Know (Yet)

This erroneous report stems from a comment GloFlo’s CEO Sanjay Jha made on stage on Wednesday at the fab’s annual get-together in San Jose. Here’s what CNBC reported:

“On Wednesday Sanjay Jha, CEO of AMD spin-off GlobalFoundries, said at the company’s technology conference in Santa Clara, California, that the company is working directly with Tesla. GlobalFoundries, which fabricates chips, has a wafer supply agreement in place with AMD through 2020.” CNBC in an article published on 9/20/2017

But what Jha actually said—which we can confirm because we were present to hear it firsthand—was that GlobalFoundries is trying to attract companies as business models change:

“As we develop these new technologies, we are also seeing a big shift in the business model and the foundry business. What is happening is that system companies like Google, like Amazon, like Tesla, like Microsoft, are coming directly to foundries. They are working directly with IP companies and system development companies because they want to control the hardware and software.”

Global Foundries is not saying that it’s working with Tesla–but that’s not to say that AMD isn’t working with Tesla. Jim Keller, formerly the chief architect for AMD’s microprocessors, is now VP of autopilot hardware at Tesla.

Last year, AMD lost what Tesla CEO Elon Musk called a tight race against Nvidia for the auto company’s GPU/AI business. Since that time, AMD has continued to show strength across multiple sectors.

The CNBC report said that its sources tied AMD and Tesla together, but neither AMD or Tesla will comment on the situation. The report indicated that Tesla was on a mission to develop its own chip for autonomous cars in order to be more vertically integrated, but that Tesla was potentially relying on building that “on top of AMD intellectual property.” That particular wording certainly paints a dotted line to GlobalFoundries.

Further, during a presentation at the Deutsche Bank Technology Conference last week, AMD CFO Devinder Kumar responded to a question from AMD’s U.S. semiconductor research chief Ross Seymore about downward pressure on the company’s semi-custom business due to the cyclical nature of the gaming console business by saying that although revenue will be down year over year, there are “design wins” coming. He stated:

“The design wins you talked about is coming in 2018. That is a non-game console product and that revenue should be happening in the 2018 timeframe to continue to help the revenue on the semi-custom which sits within the EESC segment.”

News of these developments, despite the tentative veracity of the Tesla-AMD linkage, sent AMD’s stock price up. We’ll keep pressing on the matter, among others.