AMD to spin-off fabrication?

July 24, 2008 // 10:52 a.m.

Tags: #amd #bob-rivet #chip #dirk-meyer #fabrication #intel #meyer #processors #rivet #spinoff #spin-off

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.
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