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AMD Considering Getting Out of Fabrication Business

Posted by Zonk on Tue Jun 19, 2007 10:40 PM
from the say-hey-hey-goodbye dept.
mytrip writes "2007 has not been kind to AMD, but it's surprising to hear rumours that they might be considering outsourcing chip fabrication. Analysts are predicting that AMD will try to cut costs by moving some fabrication elements out of the company by early next year. 'One Citigroup analyst is predicting a "transformational move" that would result in AMD's lower-end CPUs being manufactured by a third party and possibly selling off part or all of its Dresden, Germany facility. Another report from Goldman Sachs outlines the investment firm's belief that the company will leave manufacturing completely in the hands of third parties.'"
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  • by SEWilco (27983) on Tuesday June 19 2007, @10:43PM (#19574503) Homepage Journal
    There's no Busines
    Like Show Busines...
  • Busines? (Score:3, Informative)

    by thesolo (131008) * <slap@fighttheriaa.org> on Tuesday June 19 2007, @10:43PM (#19574509) Homepage
    "AMD Considering Getting Out of Fabrication Busines"

    You know, I even did the good little /. helper routine and emailed the on-duty editor, and this still went live with a blatant typo.

    I'm not trying to sound like a jerk, but come on editors, this is basic stuff here.
  • by jhfry (829244) on Tuesday June 19 2007, @10:48PM (#19574541)
    but this might actually be a "good thing."

    Why? Because the main reason that no one but AMD can curretnly compete is because of the hight cost of the fab's... If third party fabs, capable of producing transistors the size that Intel makes, start springing up around the world we will probably see other design companies come out of the woodwork and start producing innovative and competitive chip designs.

    If Via, for example, could produce chips in a 65nm fab in reasonable volumes... they might compete for the laptop market.

    It may not be the best move for AMD, but for the buying public it should encourage innovation and competition. Which ultimately benefits everyone.
    • tart springing up around the world we will probably see other design companies come out of the woodwork and start producing innovative and competitive chip designs.

      From someone who adores FPGA, I would welcome the possibility of getting custom chips fabricated at a reasonable rate. I have some ideas I'd love to see in silicon, but the cost is just horrendous. Guess it'll sit in VHDL till this day comes.

      • Re: (Score:3, Interesting)

        Neither ATI nor NVidia fab their own chips, so I don't think this heralds a drastic reduction in price of low quantity orders.
    • by suv4x4 (956391) on Tuesday June 19 2007, @11:11PM (#19574683)
      but this might actually be a "good thing."
      It may not be the best move for AMD, but for the buying public it should encourage innovation and competition. Which ultimately benefits everyone.


      Don't even kid about it. It's a path that once taken will be very hard to revert for AMD. Before you know it they'll outsource the rest of their fab, then sell their design to someone, and all that will be left, is a patent troll.

      Last time when we discussed AMD's poor financial performance, I critized a guy who said we should buy AMD to support them, or the future may be quite grim, with Intel (being de facto complete monopolist on the x86 market) raising prices and stagnating.

      When I read THIS article, I gotta say, that fear makes me think more like this guy and I'm suddenly feeling the need to buy AMD chips for the hell of it. I know it's wrong.

      I always suspected that if they continue performing badly, IBM could consider purchasing them and entering the market of x86 chips. Both companies have worked together for a long time and share lots of technologies, some fab and many processes and design decisions.

      Thing is, I didn't expect AMD to begin falling apart by itself, by selling some of its fab business. If they continue trying to minimize their losses by destroying themselves in this way, soon no one will want to have anything with them at all.

      What a sad fate.
      • by cryptoluddite (658517) on Wednesday June 20 2007, @12:09AM (#19574953)

        When I read THIS article, I gotta say, that fear makes me think more like this guy and I'm suddenly feeling the need to buy AMD chips for the hell of it. I know it's wrong.
        I've bought AMD and VIA chips for the last decade because the 10% difference in price or performance, depending on the time period, does not affect me much (so you get 31 fps instead of 33 who cares) and AMD has acted like a model company in comparison to Intel. AMD might as well be jesus when you put it up against Intel.

        It's called voting with your wallet. It's pretty much the only thing you as a single consumer can do to affect these large companies, the other being to spread the Word. Not only is it the right thing to do, it's your responsibility to consider who you are buying from.
          • I was an AMD consumer for ages based on price and performance.

            I just built a new AMD rig however for two reasons.

            Firstly, At the very low-end price point, I found AMD still performed better for that price range. I bought a Brisbane dual-core proc for $59. It overclocks unfairly well, and the peformance I get out of it is insane given the price. I haven't dared really push it over the edge, but consider just the latest review off NewEgg.

            "This chip's a little beast, I've got the combo running stable (prime 16 hrs) @ 3106 (9.5,x326 @ 533 htt 3x) on air! "

            Again, we're talking a measly $59 USD.

            Secondly, it seems AMD got Intel dead to rights on their anti-trust suit. Several vendors and partners have offered credible evidence, and Intel is claiming their IT department deleted all pertinent email that would be the nails in said case. Again, they sound guilty as sin. I will not financially support such a company.

            Even if Intel offered slight performance increase for the money (which isn't the case here) I wouldn't buy their product.
    • Since they now own ATI, AMD is already fabbing GPUs with TSMC. Gotta think a big part of the merger is taking that fabless model to the other chips where it makes sense. Does leveraging the TSMC link that ATI already has mean AMD is going fabless? Or, if they go with the new "Common Platform" of IBM, Chartered, Samsung, Freescale etc to provide additional capacity when needed, does that indicate a shift away from owning fabs? Yet on the other hand, you couldn't blame them for wanting to sell the Dresde
    • Re: (Score:3, Insightful)

      Unfortunately AMD has a strong relationship with IBM so they will likely moe their fabs over to their quasi-partner (perhaps with an agreement that IBM stay out of the consumer/low end server marketspace).

      Most third party fabs run in the 20-35nm range where flexbility is higher and diffrent products can be released simultaneously.

      I would prefer to see AMD stay in this and create an arm of their business that fabs and outsources fabbing to companies like SIS, NVIDIA etc who could benefit from larger dies
    • by MITEgghead (570541) on Tuesday June 19 2007, @11:24PM (#19574745)

      In reality, there are already plenty of third-party fabs out there. For instance, TSMC. And they have a 65nm process and that's what ATI's new 2000 HD series is manufactured on. So AMD (which includes ATI) is already manufacturing a lot of chips through a third-party. Even more than that, the current lowest end AMD processors, the Geode family, which is being used for the OLPC is also already manufactured by a third-party.

      The only contention in this story is that AMD will be moving more low-end manufacturing to third-parties. The highest-end CPU's really have to be manufactured by the company itself. Not only does AMD have to stay as close to the bleeding edge as possible but they also have to have control enough to add certain devices or change certain design constraints. The change in volume to a TSMC or other third-party manufacturer from moving over some of AMD's manufacuting would not affect their bottom line or cost very much at all.

      In addition, there are plenty of companies making various chips for all kinds of purposes. The limiting factor for new entries into the general purpose processor business is not the fab technology . A company can find the few million to make the masks and start making runs but the number of engineers they would need to compete with a design from Intel or AMD is enormous and would take years. In addition, Via could make a chip at 65nm right now if they wanted to but they don't have the partners or the platforms or market for those chips so they're not going to do it.

      So while I'm looking forward to the day when there can be lots of players in the high-performance CPU business, the day is not here yet and this rumor, even if it were true, would do almost nothing to bring it closer.

    • The major limiting factor in x86 space is not fab cost but patents. Intel and AMD are hardly going to hand out free passes to compete in x86. It is far easier for most suppliers to work with something like ARM or PowerPC which are far more suited to better licensing deals.

      Both Intel and AMD seem to keep going through many wild gyrations that don't seem to make long term sense. For instance, both got into the mobile CPU business (Au1000 and XScale) and baled out.

      However, the change to outsorcing fab does mak

    • Re: (Score:3, Interesting)

      The reason nobody buys AMD is because the delta in power consumption of an AMD CPU over a year compared to a similar core-based CPU is more expensive than the cost of the CPU itself.
    • by jd (1658) <imipak.yahoo@com> on Wednesday June 20 2007, @12:31AM (#19575061) Homepage Journal
      One CPU manufacturer, one GPU manufacturer... This is in no way a good thing. With ATI being bought out, the market has lost TWO major vendors, not one. Worse, Intel has dumped their network processor, Transmeta is dead, Freescale is practically dead, rival chips are dead or dying, Intel is reducing their diversity, are losing their knowledge-base and only change when competitors get close.

      We need more competition, not less. If there was ever a time when subsidies were a good idea, this would be it.

      • Re: (Score:3, Insightful)

        If there was ever a time when subsidies were a good idea, this would be it

        Yes, by all means use our tax dollars to support failure. That will really help!
      • Re: (Score:3, Interesting)

        I weep openly at the mention of the DEC Alpha. I'm even touched by the apparent demise of the MIPS processor.

        The processors that came out of the Digital's collapse (UltraSPARC V, K7 and K8) were great processors but paled in comparison, especially considering the relative power of other CPUs on the market at the time (200MHz in 1992!).

        What else out there is both powerful and elegant? All I see around me are multicore monstrosities.
      • Re: (Score:3, Informative)

        With ATI being bought out, the market has lost TWO major vendors, not one.

        The market hasn't lost any major vendors yet...

        A lot of people seem to be getting really bent out of shape considering that all that has really happened is that a few analysts have speculated that AMD might continue doing something that it has already been doing for a while- i.e. outsourcing more of its low end chips to third party fabs.
        • Re: (Score:3, Insightful)

          If the WereMaggie and Thorn-in-my-foot EMI had bothered with such subsidies, Wales would be the home of one of the greatest chip companies outside of Silicon Valley (Inmos). Manchester England - the birthplace of the stored-program digital computer - used to have quite a number of manufacturers. You can still see the signs on some of the buildings they once owned. Once upon a forgotten era, Acorn used to be a major international vendor.

          You don't suppose that a few tax pounds might have made it quite unnec

    • by Chris Burke (6130) on Wednesday June 20 2007, @10:40AM (#19580851) Homepage
      No, it would not be a good idea, it would be a terrible idea, and it would basically mean AMD intended to get out of the CPU business if not completely liquidate.

      Outside of the last couple quarters, AMD's biggest problem has been production capacity. As in, they can't make enough chips, their market share is artificially capped, and as big players like Dell sell more AMD chips others are having a hard time buying enough.

      That is NOT a problem you solve by becoming fabless. The already have foundry deals with e.g. Chartered, simply to provide some flexible extra capacity. It CAN NOT replace their current capacity with foundry deals, much less expand it. Being Yet Another TSMC Customer is not how you maintain your position as a top cpu maker.

      The way you solve a capacity problem is by building another fab, which is what AMD just did. They built a whole new fab abutting the existing fab in Dresden, to the tune of $billions. $Billions that comes largely in the form of debt. You can't undo that by selling the fab because like a car the equipment begins to depreciate immediately. The only way to recoup that investment is to build parts in that fab and sell them. Now some analyst is saying that AMD is going to dump the fab, abandon that investment as a wash, and essentially give up the ability to have more than a pitance of marketshare while still carrying all the debt for building the fab? That's a great way to shore up the financials!

      Utterly. Retarded. Analyst.

      But I repeat myself.
  • as quality remains the same more power to them. If they can save money hopefully that'll be diverted to further R&D. It is a cut throat business, anything that can give them an edge is great as long as quality remains the same or gets better.
  • by Spazntwich (208070) on Tuesday June 19 2007, @10:49PM (#19574549)
    Lately, IBM and AMD have been the only firms out there capable of keeping up with Intel's process advances, with most of AMD's due in significant part to IBM. This move could well usher in an era of consumer level technology stagnation. We saw what Intel did while AMD was a non-competitor (how many damn generations did they ride the basic pentium pro architecture??) and how badly they react to renewed competition (Yeah, great job on both the 1.13ghz P3 and the whole Netburst architecture). Intel has just in the past year or so bothered to give consumers worthy processors, and now if IBM doesn't decide to take a look at the consumer market and keep Intel on its toes, well, we're fucked.

    Awesome news! Next up, Torvalds indicted on murder charges when a mailing list discussion gets so heated he sticks a pointer straight through a face? Netcraft confirmation of BSD's death? Ron Paul is assassinated as republicrats cheer in the streets? :'(
    • And if AMD can outsource their chip fabrication to Intel? (possibly with government anti-trust enforcement).
    • by mr_mischief (456295) on Tuesday June 19 2007, @11:30PM (#19574767) Journal
      I thought I read somewhere that TSMC was gearing up to do 32nm fabrication on contract for other companies. Here's a reference to assure me I have some sliver of sanity left [beyond3d.com]. 45nm by September, and 32nm by Q4 of '09. So it seems that at least one company might be an option for outsourcing some fabrication.

      Chartered Semi just signed another tech partnership with IBM, Samsung, Infineon, and Freescale. This one [charteredsemi.com] goes down to 32nm.

      UMC and TI are working on 32nm together [digitimes.com], too.

      Fujitsu, although not especially known for fabbing chips for third parties, is working on getting down to 32nm as well. They do some fabbing for others now.

      In any case, this story at Fabtech [fabtech.org] gives a much more reasoned and insightful look at the issues. They says it's likely AMD will outsource lower-end CPUs and continue to outsourc emuch of the GPU business as ATI already did. They may ramp up more outsourced work to Chartered than they currently do, and may share some fab space at Dresden and in New York. That's a far cry from going fully fabless.
  • Works for NVIDIA (Score:5, Informative)

    by daVinci1980 (73174) on Tuesday June 19 2007, @11:07PM (#19574661) Homepage
    Being fabless works for lots of companies, for example NVIDIA [nvidia.com] (disclaimer: I work for the gentle green giant).

    There are lots of companies who only do fabrication, just as there are many other fabless semiconductor companies. With process shrinks occuring as quickly as they are today, it makes a lot of sense to let someone else (or several other someone elses) deal with the cost of developing fab facilities capable of the latest and greatest process size.
    • Does it? It would suck having a processor design finalized and not being able to fab it while factories are overhauled? Or having a new fab process come out and having no design to upgrade too?

      If the two aspects of AMDs business aren't lining up then that's terrible but it seems like they were doing a good job for a while, fab5 and 6 were coming online when the 754 and 939 were doing well.
    • Re: (Score:3, Interesting)

      No this is very dangerous! If AMD wants to survive it should not give up its fabs. Charter and the other foundry companies like TSMC, UMC, Grace have their own competitive pressures, and while AMD will be a prefered customer, the foundry fabs will not be totally dedicated to AMD. Put another way by having their own fabs, AMD can maintain bleeding edge process technology customized to its needs, with high logic performance and high density, and a very low manufacturing defect rate suitable for microproces
  • I'm sure this is going to be a dumb question, but how can a business as high-tech as AMD outsource production? Isn't that kind of like Ferrari outsourcing its car production or NASA outsourcing the launching of the space shuttle?
    • Re: (Score:3, Interesting)

      No, it would be like a car company designing a car but outsourcing the manufacturing of it. Several companies have done this, outsourcing production of some sports cars to Lotus, including Tesla with their electric Roadster.

    • Re: (Score:3, Insightful)

      Well, I'd say NASA should outsource launch services, or at least start to look at doing it (and in fact they are with the COTS program.) I would argue that they're job should be to do new and unprofitable things out in deep space, and let commercial companies handle launches (which can be profitable).

      This isn't entirely offtopic, because I'd say that that may be the approach AMD is taking here. Lots of companies can make silicon chips with ever smaller features, its just a matter of time and money, and AM
  • Most use Taiwan TSMC, UMC and others. Can't AMD just start to operate like these two? Offer high end fabs for anybody who has need? And why would anybody buy AMD's fabs when they are hardly a good investment due to high price.


    • depends on the state of the fabs, and the market for the chips that fab is capable of making.

      For example. There might be an after market for a chip, but mot enough of a market to spend a billion dollars on a fab. 200 million might be worth it.

      AMD might cut the buyer a deal on the price, but in return reserve the right to some fab time at a reduced rate.
  • I am not surprised (Score:5, Informative)

    by eebra82 (907996) on Tuesday June 19 2007, @11:36PM (#19574799) Homepage
    When the Core series were released, things didn't look to good for AMD. When they announced the delay of Barcelona, things started to look really bad. There are a few reasons why AMD may go bankrupt in a few years:

    -AMD is behind in the laptop market, which is growing at a staggering pace. -Intel has as extreme cash flow, and therefore more room for mistakes. -The marketing team at Intel has been doing a better job than its counter-part. -Intel is ahead of schedule. In the meantime, AMD is behind. -AMD recently purchased ATI. It is not necessarily a bad move, but it cost them tons of money. To make things worse, ATI is behind schedule and also behind its only competitor, nVidia, which means less money for AMD. -AMD shares are currently falling.

    I can only hope that I am wrong but I would definitely not buy AMD shares today.
  • by timmarhy (659436) on Tuesday June 19 2007, @11:42PM (#19574817)
    the reaosn it never saves you money WITHOUT degrading quality is the company you are outsourcing to will attempt to make as much out of you as it can, where a company department will try make you money.

    add to this many outsourcing companys don't have a very good understanding on your business and it's a recipe for failure. I work in an industry where out sourcing is common, and most of the time the contractors are hopeless.

  • by Brad1138 (590148) * <brad1138@yahoo.com> on Tuesday June 19 2007, @11:55PM (#19574887)
    But with the infinite number of universes theory, do you think there is one just for slashdot with "business" spelled correctly?
  • by guacamole (24270) on Wednesday June 20 2007, @12:01AM (#19574921)
    It is well known that running a state-of-art foundry efficiently requires ginormous production volumes, so most semiconductor companies go fabless these days. However, if a company like AMD can't afford its own fab, then Intel might have a huge advantage here and we might see less competition in the microprocessor market from now. Just look at Sun's experience. Sun Microsystems had been historically fabless. Their newest SPARC processors were being fabricated primarily by Texas Instruments, and Texas Instruments has pretty much ruined Sun's ability to compete with Intel on CPU speed because it often took TI years to start producing a new Sun chip in significant numbers. I remember how Sun's introduction of UltraSPARC III was the longest and most painful CPU rollout ever. It took them something like three or four years to replace the major UltraSPARC II products.
  • by zippthorne (748122) on Wednesday June 20 2007, @12:24AM (#19575021) Journal
    It looks to me a lot like the article about Microsoft divesting its massive cash reserves a while back. It's "analyst" speculation by people who, by virtue of being in the "analyst" business don't actually understand the industry they're speculating on. This is what they think AMD will do because "that's how it's done." Never mind whether or not AMD thinks it'd be a good idea.

    Speculators speculate on money moving, so it's rather unsurprising that they'd suggest that the response {large company} would have to lackluster performance would be to spin off the cost centers and reorganize to maximize the synergy of the core competencies.

    Now, it is beneficial to make sure you're only worried about the business you're in. A lot of companies in the 90s for instance had huge in-house IT departments despite IT not being the thing that makes them money. They'd have a lot less headaches if they'd subscribed to an IT service to take care of their needs there, freeing them up to worry about the thing they really sell. You wouldn't worry about that any more than you'd worry about a company purchasing paper instead of milling it themselves.

    To my untrained eye, AMD appears to be in the business of selling microprocessors. The manufacture of those isn't an incidental part of the business (the manufacture of the tools to manufacture the chips would be such an outside activity), but a key layer in their vertical integration. Unless their numbers are really small, I can't see why it'd be cost effective to drop that.
  • Bad idea... (Score:3, Interesting)

    by linuxtelephony (141049) on Wednesday June 20 2007, @12:50AM (#19575165) Homepage
    At least part of the potential downside was included in the article:

    But it's a different story for CPU makers. From a technical perspective, ditching your fab capabilities is an iffy proposition as it introduces a separation between design and manufacturing that could ultimately stretch out development times.
    While I understand that outsourcing to third parties things that are not part of your organization's core competencies, such as an auto parts store using an IT services provider or a software development house hiring an accounting firm, it seems very risky to farm out your core business to third parties. That is, unless AMD does not consider chips to be their main business any longer. Perhaps their main business is chip design? Or graphics cards?

    However, if chips are their core business, then they should probably maintain at least some manufacturing capacity of their own just to be able to maintain control of their own destiny. It might be cheaper for a third party to make some of their chips now, but in just a short while I bet it becomes more expensive when the third parties realize that AMD can't make their own chips any more. What are they going to do? They will have AMD between a rock and a hard place. Besides, AMD has already had problems in the past with ramping up to production fast enough to satisfy demand, and more than one person mentioned potential availability concerns as one of the reasons Apple went to Intel instead of AMD.

    If AMD does this, I hope they look to copy how Apple does things. As far as I understand it, Apple doesn't manufacture much of anything themselves any longer. Apple's core business is not "making computers" or "making ipods." No, Apple's core business revolves a lot around design, usability, etc. With that clearly understood, then it makes sense for Apple not to be a "manufacturer" (building computers and circuit boards from scratch like they used to).

    I certainly hope this isn't a short pier that AMD will be taking a long walk on. Time will tell.
  • by WoTG (610710) on Wednesday June 20 2007, @12:58AM (#19575217) Homepage Journal
    Don't get too worked up. AMD will be outsourcing bits of production, that's public knowledge. They've contracted with Charter for CPUs, and ATI, which AMD bought in 2006, has always been fabless. So, yes, more outsourcing is in the cards.

    Will AMD go completely fabless? I highly doubt it. IMHO, top-end chips pretty much require in-house fabs. That extra 10% of control and 10% of benefit to tweaking a fab to your own specific needs and 10% benefit to setting your own time lines can make the difference between being competitive in the high-end and not. (Yeah, I'm making those numbers up, but you get the idea).

    Sure, AMD is having a tough year, but hopefully things will get on track. When they do, having at least one in-house fab is pretty much crucial to being competitive in the top-end... and the top-end counts because the margins are incredible there.

    The mid-range chips and lower end stuff can probably be pushed off to a 3rd party... and I think we might see something like that from AMD.
    • by alexhmit01 (104757) on Wednesday June 20 2007, @08:15AM (#19578231)
      To own and run ones own fabs, one has a LOT of cash tied up in fabs. That means carrying tremendous debt levels, and given AMD's shaky financials, at a higher interest rate than Intel. This gives Intel a competitive edge, just from the finance side. Selling the fabs would let AMD reduce its debt levels, improve it's balance sheet, and possibly cut costs.

      AMD's "tough" years are in part because as a company with its own fabs, it has massive fixed costs (and the interest expenses associated with it), which means that when cyclical demand trends downward, their numbers get destroyed by the high fixed costs. High fixed costs are irrelevant to huge market leaders, but the nimble competitor gets eaten up when things get painful.

      OTOH, if one can move capital intensive projects off balance sheet, the company's financial reports improve, which can improve their bond rating and lower their interest costs on other areas.

      Right now, AMD must focus on chip design, chip manufacturing, chip marketing, and financial maneuvering. Going fabless would let them focus on designing and selling chips, instead of manufacturing them and managing complicated financial operations to fund everything.

      Whether they gain a competitive edge by owning the fabs is another question, and the only people that know that are inside of AMD. Whether the CEO and Board will ask them is another question, but AMD's internal guys know whether they are really good at manufacturing or not.
  • Anal-ysts (Score:5, Interesting)

    by Doc Ruby (173196) on Wednesday June 20 2007, @01:04AM (#19575261) Homepage Journal
    How about if AMD used its debt investments in new fabs in Germany and NY to accept outsourced fabrication for other companies it doesn't suffer from boosting? That would make a lot more sense than getting in debt to sell capital facilities at a loss of both investment and competitive control.

    These analysts don't know anything. They just want every business to cut costs and debt while still producing the most revenue, for the most short-term profits, even if trying to do so is a stupid strategy that wrecks the company. When was the last time any published equities analyst was right about some surprising transformation of an industry leader? If they understood business strategy, they'd be running one, or privately advising one on equity development. These are people who can't even hold a job speculating in the market, so they try to make it speculating on the market.
    • by Shihar (153932) on Tuesday June 19 2007, @11:45PM (#19574837)
      You line of logic is spoken like someone who knows nothing of the semiconductor market.

      The semiconductor market is one of the most brutal markets in existence. Capital costs are through the roof, demand is unstable and hard to predict, and the margins are razor thin. AMD is doing itself a favor to extract as much of itself out of the market as possible and focus on design. Design and production are as different as night and day. Competency in one speaks little about competency in the other.

      What AMD is gaining is mass market production above and beyond what they currently have. Do they have to pay a middleman a cut? Sure, but in return they are getting access to massive foundries that can produce on an industrial scale. The foundry doesn't care what runs through its lines, so long as something is running. The more they run, the cheaper it is. It isn't like they will just run AMD chips. They will run a whole pile of other chips that run on the same equipment. The result is that they can sink the massive capital costs that a modern day semiconductor factory costs and run enough volume to make it profitable. Short of becoming diving into the foundry business and running lines for other companies, AMD has no way of running the massive volume it takes to make justify the horrific capital costs that a cutting edge semiconductor foundry demands.

      The semiconductor foundry business is a cut throat world to be in. Massive capital costs, low profit margins, and over capacity makes keeping a foundry running a full time struggle. AMD is doing itself a favor by doing what AMD does best. AMD designs good chips. AMD isn't a semiconductor foundry. The slightly higher costs in paying 'middlemen' is pittance compared to the horrific cost of dropping a multi-billion dollar foundry down every couple of years while at the same time selling and junking your old multi-billion dollar foundries.
      • Re: (Score:3, Insightful)

        Okay, you're talking about foundries, but not high-end microprocessors, which have demands all their own.

        For one, it requires both design and production competency. AMD is very competent at both, as they have to be in order to be in the same ball park as Intel. Without AMD-owned equipment with AMD engineers tweaking the knobs, the already existant gap between AMD's and Intel's manufacturing would widen. As you say, the foundry companies don't care who runs through its lines, they have many other designs,
    • Re: (Score:3, Informative)

      Goldman Sachs is big capital. Big (capital [B]) Capital. They have people in house to analyze everything, and they are doing very well (Very Well) in the market right now. Almost disgustingly well. Of all industries, Big Capital is probably most informed about the widest variety of things, because their only job is to "know." There is literally not much else that they do.

      So while it's okay to doubt, I wouldn't bet too much against the top investment banks right now, because they fund much of the world's ind