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AMD to spin-off fabrication?

AMD to spin-off fabrication?

Chips like these will still have the AMD name on them, but may well be made by a separate company in the future.

If you've been wondering what changes newly-appointed CEO Dirk Meyer will be making to bring AMD back to profitability, then you'd better prepare yourself for some pretty major news.

According to an article in the Austin-American Statesman, Meyer is planning to spin AMD's manufacturing operations off into an entirely separate company with brand-new ownership – and the changes could occur in the next few months.

Since the article went live on the Statesman's website AMD's press officers have been quick to dismiss the rumours, telling CNet's Brooke Crothers that Meyer was “misquoted” by the newspaper. Spokesman Drew Prairie didn't give details on exactly what Meyer's quote was originally supposed to mean, but did end his statement with the fact that “it's fundamentally important to AMD to transform how we manufacture our wafers.

CNet goes on to quote the company's chief financial officer Bob Rivet as saying that the Asset Smart programme, the codename for planned restructuring of manufacturing operations, “will be a major reformation of the company.” With two high-ranking officials at the company both warning of major changes ahead, it's hard to see how the Statesman got it wrong.

The selling of fabrication plants to a third-party isn't as daft as it sounds – by flogging assets owned by AMD directly to a spinoff company, AMD can get some much-needed cashflow into the company. It's not like AMD has never worked with third-party chip fabs, either: the company relies on IBM to build and test chips based on a 300mm wafer size, and the company's graphics chips are manufactured by Taiwan Semiconductor Manufacturing Company. Even so, it's hard to see the restructuring as anything more than an admission that the underdog that once beat Intel at its own game is now struggling to compete in an ever-changing marketplace.

Will you be sad to see AMD's fabrication facilities sold off, or are you just happy to see someone at the company making the tough decisions that will lead it back to glory? Share your thoughts over in the forums.

9 Comments

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BlackMage23 24th July 2008, 12:21 Quote
There are going to be a lot of tough decisions to be made at AMD to keep it going.
Long term it is better to keep the fabs, but if they don't make it past the short term then long term does not matter.
Xir 24th July 2008, 12:44 Quote
Quote:
"the company relies on IBM to build and test chips based on a 300mm wafer size"

errr, it develops future technology together with IBM (east Fishkill)...before that with Motorola.

Production however (300mm) is in Dresden-Germany, also production development (APC). :D
http://www.amd.com/us-en/Corporate/AboutAMD/0,,51_52_9999_10000,00.html

Also some processors of lower complexity are (were?...sempron) built in Singapore (Chartered)
Gareth Halfacree 24th July 2008, 12:51 Quote
Quote:
Originally Posted by Xir
Quote:
"the company relies on IBM to build and test chips based on a 300mm wafer size"

errr, it develops future technology together with IBM (east Fishkill)...before that with Motorola.
Sorry, I was a bit vague there - the important part was "and test", as AMD don't have the facility to run short 300mm runs for development and testing purposes, relying on IBM instead. At least, that's how I understand it.
Goty 24th July 2008, 23:00 Quote
I see this as being a bad move for AMD. Having in-house fabs has numerous advantages, not the least of which being lower productions costs and better control over the development of the manufacturing process, both of which are things that AMD is going to need desperately in the future.

*EDIT* It seems that AMD is denying reports that it's going to sell off its fabs.

Source: http://www.eweek.com/c/a/Desktops-and-Notebooks/AMD-Denies-Fab-Sell-Off/
Xir 25th July 2008, 13:16 Quote
...besides, the Fabs are de-facto companies of their own (for instance FAB36 is a Company founded on german (saxon) coroprate laws):
AMD Saxony LLC & Co. KG

Oh what a great eweek article:
Quote: In the chip business, manufacturing eats up a vast chunk of the revenue

yeah...it's also the only part that generates revenue in the first place...these people are selling hardware, not ideas.

Quate: AMD converted its Fab 25 in Austin, Texas, into a facility that is now making flash memory for Spansion, a company in which AMD holds a financial stake

Actually AMD founded Spansion, before AMD itself manufactured flash memory (helped it through the downturn before last) before separating the flash-business from the rest and merging it with Fujitsu's flash business to form spansion.
Consisting of AMD'S old microprocessor FAB in Austin (the people that brought you the first aluminum Athlon's, the copper ones coming from Dresden) and Fujitsu's I believe 3 Fabs in Japan.
(more precice, they've worked togethet with fujitsu for over a decade before as FASL)

Ah well...the history of Semiconductor companies is easily forgotten.
Goty 25th July 2008, 17:35 Quote
Ok, and the point of your post was?
Amon 26th July 2008, 00:32 Quote
So the resulting bodies could have been AMD Semiconductor and AMD Microprocessors?
Sark.inc 26th July 2008, 15:39 Quote
I don't think they will sell off the fabs, just change how they do it and how they are made.
Xir 30th July 2008, 17:35 Quote
The point is: they could sell Fabs that are individual companies allready ;-)
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