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AMD Businesses Intel Hardware

AMD To Spin Off Fabrication From Design Work 153

Posted by timothy
from the splitarama dept.
I.M.O.G. was one of many readers to write with the news that "Advanced Micro Devices plans to announce Tuesday that it will split into two companies — one focused on designing microprocessors and the other on the costly business of manufacturing them — in a drastic effort to maintain its position as the only real rival to Intel. 'This is the biggest announcement in our history,' said AMD's chief executive, Dirk Meyer. 'This will make us a financially stronger company, both in the near term and in the long term, as a result of being out from the capital expense burden we have had to bear.'"
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AMD To Spin Off Fabrication From Design Work

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  • by SoupIsGoodFood_42 (521389) on Tuesday October 07, 2008 @09:02AM (#25284627)

    Can someone give me some insight into why splitting the company into two is supposed to help AMD?

    • by srjh (1316705) on Tuesday October 07, 2008 @09:06AM (#25284689)

      There seems to be some good information here [wikipedia.org]:

      IC production facilities are expensive to build and maintain. Unless they can be kept at nearly full utilization, they will become a drain on the finances of the company that owns them. The foundry model uses two methods to avoid these costs: Fabless companies avoid costs by not owning such facilities. Merchant foundries, on the other hand, find work from the worldwide pool of fabless companies, and by careful scheduling, pricing, and contracting keep their plants at full utilization.

      • by cabjf (710106) on Tuesday October 07, 2008 @09:24AM (#25284935)
        So AMD frees its production facilities to accept contracts from other fabless companies. Meanwhile, they can focus on designing and selling chips and chipsets for motherboards and graphics cards.

        I think this will turn out well for AMD, if they can maintain a good relationship with their foundry spin off and if the foundry spin off can keep up with the competition in terms of quality and technology. Although, I guess this would also free AMD to find other partners if they need to either expand production or find better production facilities in the future without neglecting parts of their own business.
      • by Stan Vassilev (939229) on Tuesday October 07, 2008 @09:25AM (#25284953)

        IC production facilities are expensive to build and maintain. Unless they can be kept at nearly full utilization, they will become a drain on the finances of the company that owns them. The foundry model uses two methods to avoid these costs: Fabless companies avoid costs by not owning such facilities. Merchant foundries, on the other hand, find work from the worldwide pool of fabless companies, and by careful scheduling, pricing, and contracting keep their plants at full utilization.

        I don't see anything in here that requires two separate companies. AMD can stay a single company and still build chips for other companies to fully utilize their facilities.

        It looks more like a decision appealing towards someone's fuzzy feelings: "look the fab is independent now, it's got nothing to do with AMD chips, you can hire it" and "look we're doing bad but we have a big plan to bail out out of the crysis". Ops how come I worded it this exact way :P?

        • by Junta (36770) on Tuesday October 07, 2008 @09:44AM (#25285249)

          If they are a single company, then, internally, the two groups almost have to use each other or else seem bizarre. I.e., if the designers contracted out fabrication of a model even though their own fabrication division was not fully utilized, that would seem unhealthy. By the same token, if the fabrication division pre-empted production in-house designs for a third-party, that would similarly look bad.

          With that view, it would be a tad harder for the fabrication portion of the business to attract design companies, with prospective companies knowing they are putting their manufacturing capabilities in the hands of a company that would be both partner and competitor. The conflict of interest is far from appealing.

          Few large corporations under typical circumstances preserve in-house at-scale manufacturing. I.e., most x86 system vendors now at most design the system and then feed to another company for fulfillment, potentially even a company spun off from themselves when they reached a similar conclusion.

          As consumers, we don't stand to lose, only to gain. For example, if nVidia has been held back in any quality/performance way by inferior fabrication companies, they may now approach AMD fabrication. Same goes for AMD v. Intel, if another fab company can deliver more aggressive process size/yield improvements, then AMD design can go to that company and produce a valid competitor to Intel.

          Or it shows that both halves of the company were completely average nowadays even in only the context of their similar competitors, and still doesn't do well, but that isn't different from today.

          • by jonnythan (79727) on Tuesday October 07, 2008 @10:19AM (#25285791) Homepage

            "With that view, it would be a tad harder for the fabrication portion of the business to attract design companies, with prospective companies knowing they are putting their manufacturing capabilities in the hands of a company that would be both partner and competitor."

            Well that's the idea here. By spinning off fabrication into its own company, other chip designers wouldn't be putting their ideas in the hands of a competitor.

          • ATI, nVidia (Score:3, Interesting)

            by Hemogoblin (982564)

            ATI contracted out their fabrication in the past, correct? Since AMD acquired them, perhaps they now realize this might work for their x86 stuff. Disclaimer: I have absolutely no expertise in this area.

          • Re: (Score:3, Insightful)

            by Ioldanach (88584)
            Unfortunately, the downside is that they probably won't be contracting to their spinoff for 100% of their manufacturing requirements, and as a result we can expect to see chips manufactured in a variety of locations with a variety of quality controls. The occasional complete failure of an entire run of hard drives comes to mind.
            • As far as quality control, not sure what you mean. If they don't pass, they aren't QC OK.

              As for complete failures, generally this comes from the opposite - single manufacturer (whether in-house or not) and a whole shipment is contaminated. Yes, I remember the various different drive failures, not all were cheapest manufacturer type deals - the biggest always come from in-house/single source manufacturers.

              • by Ioldanach (88584)
                My thought was that while they might all pass the specified tests, the QC on the manufacturing equipment isn't all the same and defects not tested for might slip out in one fab and not another. Adds more variability to the product. Then again, you may be right, the competition from fab providers may mean they produce better product than the locked-in fully owned fab.
          • Re: (Score:3, Insightful)

            by blind biker (1066130)

            And yet, the GP may have a point. Because, it works for IBM - they are both fabbing ICs for others and for themselves.

        • by epiphani (254981) <<ten.lad> <ta> <inahpipe>> on Tuesday October 07, 2008 @10:09AM (#25285621)

          I don't see anything in here that requires two separate companies.

          From an organization or technology perspective, no, there isnt any reason to split into two companies. From a financial perspective, this makes a huge amount of sense. You'll note that this new company is receiving an enormous amount of new funds from investors, and taking a lot of the AMD debt. They're effectively splitting off R&D from Manufacturing, and people are free to invest in just the R&D component or just the manufacturing component.

          Some folk out there thought the manufacturing side was worth a huge investment of cash. Lots of assets there that are worth a fair bit - but not if they're tied to work purely on AMD products. If the R&D side of AMD failed, then there are a crapload of perfectly good assets that would be lost, in effect. This allowed investors separate AMDs chips from AMDs fabs when investing. There is no inherent value in splitting the fabs off - except when someone is willing to spend $8 billion to fix them up, separate from the R&D side.

          This doesn't mean they think AMD R&D is going to fail - its just about risk. Why tie your $8 billion investment to the ADD of the consumer chip market instead of to physical assets that will be worth something regardless of the mood of the x86 CPU market?

        • Re: (Score:2, Insightful)

          by plague3106 (71849)

          It makes the balance sheets for the design company better... since it's costs are lower and profit likely higher.

        • Maybe they don't want to be in the fab for hire business. They need to focus on their core business, not selling space to other chip manufacturers.

          It also means they can go to other fabs if they need chips built should the spin off fab fail.

          Right now their fab is running under capacity and losing money. Spinning it off makes a lot of sense.

        • I don't see anything in here that requires two separate companies. AMD can stay a single company and still build chips for other companies to fully utilize their facilities.

          But what's the likelihood a chip designer will employ another chip designer to fabricate their chips? I'd be wary about having another designer to fabricate chips my business designed.

          Falcon

    • Re: (Score:2, Interesting)

      by Anonymous Coward
      Because Design without Fab worked so well for Transmeta?
      • ARM is fabless (Score:5, Informative)

        by tepples (727027) <[moc.liamg] [ta] [selppet]> on Tuesday October 07, 2008 @09:14AM (#25284793) Homepage Journal

        Because Design without Fab worked so well for Transmeta?

        I see your sarcasm, but it works for ARM and MIPS.

        • Re: (Score:3, Informative)

          by Spatial (1235392)
          Nvidia too.
        • Re:ARM is fabless (Score:5, Insightful)

          by Stan Vassilev (939229) on Tuesday October 07, 2008 @09:39AM (#25285167)

          > Because Design without Fab worked so well for Transmeta?
          I see your sarcasm, but it works for ARM and MIPS.

          What ARM and MIPS have in common is they are RISC architectures with their own specification and market.

          What Transmeta and AMD have in common is that they produce x86 compatible chips and thus compete directly with Intel.

          Intel as a company owning their fabs has become famous for their well synchronised "tick tock" process where they successively introduce new design, then introduce better fab for the same design, then a new design etc. Such accuracy and consistency is hard to expect from a design-only company that needs to contract a third party to produce their own product, and both parties are constantly looking for a way to skim some pennies in the process.

          • What Transmeta and AMD have in common is that they produce x86 compatible chips and thus compete directly with Intel.

            As Spatial pointed out [slashdot.org], NVIDIA is fabless, and NVIDIA also competes with Intel in chipsets and video. If AMD is going fabless, what makes at least the ATI division of AMD any different from NVIDIA?

          • Re:ARM is fabless (Score:5, Insightful)

            by lawaetf1 (613291) on Tuesday October 07, 2008 @02:58PM (#25290319)

            Intel is in a unique position in that its R&D and fab budgets are, relatively speaking, limitless. With a lion's share of the market, Intel can afford to upgrade some of their fabs to 32nm at enormous expense with the comfort of knowing that the volumes will almost assuredly be there to make back the investment.

            AMD had to play a much nimbler and dangerous game of trying to crank out volume while simultaneously playing catch-up on the fab side. It was wise of them to recognize this as a losing game. My assumption is that the AMD/IBM, et al alliance of gate research and the like will be fed into these fabs with some sort of preferential production rights to the contributors of the R&D budget.

            Also, let's not forget that Intel is the subject of numerous international anti-trust suits.

            IMHO, AMD has had some costly slipups but they have otherwise done an outstanding job of keeping pace with NVIDIA and Intel while on a fractional R&D allowance. In NVIDIA's case, they are pulling ahead.

        • Re:ARM is fabless (Score:5, Insightful)

          by evilviper (135110) on Tuesday October 07, 2008 @10:07AM (#25285585) Journal

          it works for ARM and MIPS.

          To be fair, ARM and MIPS don't need cutting-edge performance. They are fabbed on whatever slightly older, absolutely dirt-cheap process is available. They're so small and low power already that a process shrink or two doesn't noticeably affect the overall performance of the embedded device.

          Part of the reason it works so well is because companies that need to be on the cutting edge of chip tech (like Intel and AMD) pay the huge expense of building high tech fabs, then, when the technology moves on, they've got to do SOMETHING with the obsolete fabs, so they might as well contract out and make dirt cheap chips at minimal profits. After all, little profit is better than no-profits, on a fab you've long since paid for and (hopefully) profited from.

          And I believe AMD was already trying to better utilize their old fabs, making (low-power) Geode chips for embedded apps and the like with spare capacity.

          And this really shouldn't have surprised anyone... They've contracted out other fabs to produce AMD cores in addition to their own, but only as contingencies when they couldn't immediately meet demand... I suppose they don't have that problem anymore.

          • To be fair, ARM and MIPS don't need cutting-edge performance. They are fabbed on whatever slightly older, absolutely dirt-cheap process is available. They're so small and low power already that a process shrink or two doesn't noticeably affect the overall performance of the embedded device.

            But the DEC Alpha [wikipedia.org] did need cutting-edge performance. Originally DEC fabricated the chips but they contracted out the fab to the Korean business Samsung [faqs.org].

            Falcon

        • by argent (18001)

          I see your sarcasm, but it works for ARM and MIPS.

          And DEC?

      • by dfghjk (711126) on Tuesday October 07, 2008 @10:09AM (#25285631)

        Transmeta failed because its product sucked.

        • by default luser (529332) on Tuesday October 07, 2008 @12:27PM (#25287931) Journal

          Transmeta failed because its product sucked.

          Absolutely. For those who don't know, the Crusoe uses a VLIW architecture with 128-bit words, and x86 instructions have to be decoded and RE-ORDERED in real-time into those 128-bit words. This is the same brick wall Intel ran into with optimizing compilers for the Itanium, but unlike Intel the Crusoe has to do it in REAL TIME.

          Sure, the software translation layer meant that they could run Crusoe any architecture, but in the end it cost them precious performance. The chip itself wasn't much to sneeze at (two integer units and an anemic FPU), so it really didn't have the performance to spare. Then they hobbled the chip by integrating a nortbridge; this meant that ALL Crusoe-based systems would have the same video and I/O performance limitations, all in exchange for saving a buck or two on parts.

          It didn't help that they hyped the successor, the Efficion, and then it didn't deliver in clock speeds or promised performance increases [vanshardware.com].

    • Re: (Score:3, Informative)

      by confused one (671304)
      The cost of building and running the fab does not show up on their corporate books. AMD management can concentrate on the business of designing and marketing the chips and can avoid the fab issues (not entirely, but for the most part). The fab can potentially be operated at a higher utilization if it is not running solely AMD processors, which might improve profitability for the fab. AMD is maintaining a controlling interest in the company being spun off, so that they will be the priority customer.
      • Re: (Score:3, Informative)

        by I.M.O.G. (811163)
        AMD is maintaining a minority interest - the Foundry Company has a 55% majority on the spunoff part.
        • Re: (Score:3, Insightful)

          by confused one (671304)
          My mistake. I read the percentages incorrectly. I still maintain that a 45% ownership stake will still make them the first customer in line.
        • Re: (Score:3, Interesting)

          by Chris Burke (6130)

          AMD is maintaining a minority interest - the Foundry Company has a 55% majority on the spunoff part.

          My understanding is that while it's only 45% of the stock, not all stock is equal and AMD is keeping a majority of the voting rights.

    • by hey! (33014) on Tuesday October 07, 2008 @09:18AM (#25284861) Homepage Journal

      It is NOT supposed to help AMD. It is supposed to help AMD's stockholders.

      This often happens with troubled stocks that have a number of different business functions that can be split off. Some of those business functions may represent a great deal of capital investment, but not return much cash. You don't want that capital tied up in idle buildings and equipment, but you probably can't sell those things to your rival who's happy to see you shrivel up and blow away.

      So you split the company up. The more profitable divisions can start to appreciate in value or even pay dividends. The less profitable business can stay afloat on business from its former sibling divisions while the stockholders unload their stock in it. It's possible that new management can turn thing around.

      • Re: (Score:2, Informative)

        by dnoyeb (547705)

        FUCK! I held on too long. My AMD stock has done well over the last 8 or so years. I knew that ATI acquisition smelled funny...

        This happens when the profit margins of the company are not inline with what shareholders expect from a company in the particular field in question. The idea for the split is that the one company will be in the field in question, and have much higher margins (without the other division bringing them down). The other company, while still profitable, is now in a different field wi

        • by hey! (33014)

          Usually, big acquisitions are bad news, or at least a sign of a bumpy ride.

      • The less profitable business can stay afloat on business from its former sibling divisions while the stockholders unload their stock in it.

        However the chip fab business will be owned by Advanced Technology Investment Co. (ATIC), "which is owned by the government of Abu Dhabi in the United Arab Emirates" [computerworld.com] and AMD. If nothing else because ATIC is owned by an oil rich government there's no pressure to satisfy stockholders. And because the new business isn't tied to AMD it can contract to fabricate other busi

    • by Targon (17348) on Tuesday October 07, 2008 @09:36AM (#25285113)

      Right now, AMD fabs are ONLY used to produce AMD processors. They don't handle GPU manufacturing at this point. As a result of this, and because of the bad economy, the fab side of things would drag AMD down more than keeping the two companies in a good position. On top of this, from a pure bookkeeping/accounting perspective, it becomes easier for investors and potential investors to see a profit from one side of the business or the other.

      The Athlon 64 X2 and Phenom sales numbers really are not bad, but the profits from the sales are never seen for investors if the fab side is losing money. The split will make it very clear how well the company is doing in each area. It will also open the doors for other companies to buy fab capacity from AMD, so AMD could make money by making chips for other companies. We may never see Intel use AMD for this, but other companies are out there.

      The downside to this is that as two smaller companies, one side or the other might be purchased by another company, which would hurt in the long run. It's a dangerous time...

      • I always thought that combining the fabrication resources of both CPUs and GPUs was one of the big reasons for buying ATi. Why they have never gotten around to this really baffles me.
        • Re: (Score:3, Informative)

          by ThisNukes4u (752508) *
          ATI has/had no fabrication resources other than contacts at TSMC, which /is/ going to be used to fab the new Fusion cpu + gpu cores that are due in the next year or so.
      • Re: (Score:3, Interesting)

        by Dr. Spork (142693)

        I foresee a different future for AMD. I have a feeling that they're restructuring themselves to be a big ATi, which was a fabless "silicon design" company. There are plenty of competent and cheap foundries for silicon. The costs of duplicating the engineering work of others is weighing heavily on AMD, since their primary rival can outspend them by such a huge margin. It seems to me that they're betting on the survival of AMD intellectual property by having their competent engineers design stuff that's fab

        • Re: (Score:3, Interesting)

          by ppanon (16583)

          Or maybe, since AMD have been using IBM's process technology for a while now, but there's been a delay in integrating that process into their own fabs, they think they can come to an agreement with IBM to use IBM's leading edge fabs.

          It would make a lot of sense. IBM gets to run their high end fabs at higher capacity with a product that doesn't really compete with IBM's Power-based products, but which competes with one of IBM's biggest potential competitors (Intel). They also won't have to risk more anti-

          • by ppanon (16583)
            Come to think of it, Meyer took over as president in July. I don't think it's a coincidence that somebody from the design side took over from someone from operations/process (Ruiz). I think what happened is that Ruiz couldn't swing financing for the next round of fabs and this strategy was adopted as an alternative. At that point it didn't make sense to have someone from operations running the company, they needed someone from design and Meyer was the obvious candidate. That handover makes sense now.
    • by Sj0 (472011)

      Pixie dust. Basically, by making AMD's fab capacity fend for itself, AMD's design work will, through the magic of pixie dust, suddenly not have to worry about lack of fab capacity.

      If you don't see it, it's not real!

    • Re: (Score:3, Informative)

      by Vigile (99919) *

      This quick synopsis gives you some good info on why it helps AMD: http://www.pcper.com/comments.php?nid=6262 [pcper.com]

    • The real reason is that AMD, the chip designers, will be able to tell the SEC everything is peachy keen.

      The chip manufacturer company that AMD spins off will be saddled with debt all the time, but will be kept just barely afloat by those handy contracts from AMD.

      AMD can already rent out its fabs to other companies if it wishes. Spinning a new company is just their way of hiding their debt, which AMD (and everyone else, apparently) is currently drowning in.

    • You spin off a company, and get on the board. It is usually easy if you were on the board for the parent company. Then you IPO, sell all the stock on the first day and shut down the company. I suspect Intel or IBM will be buying AMD's fab in 18 months to expand their own capacity.

    • by ppanon (16583)
      My guess is that this is a fallout of the credit crunch. It's come to a head on Wall Street now, but I wouldn't be surprised if, given the kind of capital that funding a new fab costs, that AMD realized months ago that they wouldn't be able to borrow for the next round of fab upgrades. So a new strategy was necessary, one that didn't involve a large debt overhead from fabrication plant upgrades.
    • Can someone give me some insight into why splitting the company into two is supposed to help AMD?

      Building fabrication plants drain money from research. And since the new fabrication business isn't exclusively tied to AMD it will be able to fabricate chips for other chip designers.

      Falcon

  • Hmm... (Score:4, Insightful)

    by kabocox (199019) on Tuesday October 07, 2008 @09:25AM (#25284949)

    You have to wonder if this was actually a good long term idea that Intel would be doing it as well. I'm guessing this is more of an accounting trick to help their numbers look better and/or some how lower taxes. I don't own any AMD stock so this doesn't effect me too much... I just hope that they don't go under as Intel does need some one to compete against.

    • Re: (Score:2, Insightful)

      by skulgnome (1114401)

      The difference is that Intel is chiefly a semiconductor manufacturing company, whereas AMD is chiefly an R&D company. As evidenced by Intel's chips being based on a silicon process that's about half a generation ahead all the time, and AMD's being smart, high-bandwidth designs hampered by slower silicon process development.

      A similar move would hurt, not help, Intel.

    • Yes, you are right. There is no way they would be doing this if they weren't in financial trouble. They are several billion dollars in debt, haven't made a profit in over a year, and analysts don't expect them to make profit until 2010.

      Beyond all that, right now is not a very good time for a company to be in debt. Although AMD is amazingly good at getting new investors, so maybe they will manage to survive. Their designs are better, so if they can manage to hang on with their manufacturing for the nex
  • Backwards (Score:5, Insightful)

    by Thelasko (1196535) on Tuesday October 07, 2008 @09:32AM (#25285059) Journal
    Funny, my company just did the opposite. Our design department was just recently merged with manufacturing. This was done because:
    A) Design would rarely factor in the manufacturability of it's designs, driving up costs.
    B) Manufacturing had a tendency to sacrifice quality to reduce costs.

    This new corporate structure has only been in place for a few months, but so far has worked quite well. Entire product lines have been eliminated (design didn't know manufacturing was still making the old stuff). Entire processes have been eliminated (manufacturing thought they were needed to meet the final spec, but weren't).

    Most of these issues could have been resolved with better management and communication, but when design and manufacturing are a single unit, these issues resolve themselves naturally.
    • There is no right answer, it all depends on the state of the business, relationships, and opportunities.
      Sometimes it's better to spinoff, other times it's better to merge - one size doesn't fit all
  • by Dawn Keyhotie (3145) on Tuesday October 07, 2008 @09:44AM (#25285239)

    Stick a fork in AMD, they're done.

    A design firm plus a foundry does not equal an integrated semiconductor powerhouse.

    Who is left to compete with Intel now? At least we will have Nehalem. Get used to Nehalem, embrace it, love it. Because it's going to be around for a long, long time. At least we have the x86-64 ISA, on-board memory controller, and point-to-point processor communications as an AMD legacy. And thank $DEITY that AMD was able to put a stake through the heart of Itanium.

    There won't be much future innovation from Intel without the spur of aggressive competition from AMD.

    Cheers!

    • Re: (Score:2, Redundant)

      by HBI (604924)

      You're right, but people aren't going to want to recognize it.

      AMDs irrelevance will become clear in about a generation of chips, though.

      • by Spatial (1235392)
        Just last week I was bitching about having no worthwhile upgrade path from my X2 6000+, but AMD recently announced that they'll be selling 45nm chips in early January. They claim a 35% average increase in performance over current Phenoms, with the same percentage decrease in power consumption. Intel is still ahead with the incredible Core 2 Duo lineup, but if AMD can pull off the 45nm Phenoms at a reasonable price, I think it will be enough to stay competitive for a while.
    • by Necron69 (35644)

      Hah! This is just the opening that Itanium needs for WORLD DOMINATION!! Just you wait, naysayers. BWAHAHAHAHAHAHHAHAAAA!!!!

      - Necron69

      Seriously, I like Itanium. :)

      • Re: (Score:2, Informative)

        by PLBogen (452989)

        I worked for Intel ATD Q&R in 2003 when the Itanium 2 died. It had nothing to do with AMD, and everything to do with problems inherent in the design. The Itanium 2 was failing all of the Q&R tests and was not performing up to the desired specs. That was why Intel killed the line.

        • Um. You do realize that Intel had no intention of ever extending x86 arch to 64-bits, right?

          And that the plan was to force anyone who needed more that 4GB of address space or eight 32-bit registers to migrate to Itanium?

          And that Intel had strong-armed or bluffed all competing RISC vendors (except Sun) into abandoning their 64-bit CPUs based on Intel's plans for an entire Itanium 'ecosystem'?

          And that they had the entire IT press eating out of their hands, blathering on about the bright inescapable future of

    • by Kjella (173770)

      Who is left to compete with Intel now?

      Intel. Sure you might say they were always trying to sell to the 80% that was already Intel customers, but in the past the market has always been craving more performance. I think the huge beyond expections demand for the Atom will be a big shift that'll only become more and more apparent and soon spread to higher tier laptops and desktops - it's enough. Even Vista won't be able to undo that shift. Of course there's the gamers and scientific processing and whatnot that'll always need terahertz beowulf clust

    • Re: (Score:3, Insightful)

      by falconwolf (725481)

      A design firm plus a foundry does not equal an integrated semiconductor powerhouse.

      There is no need for an "integrated semiconductor powerhouse".

      Who is left to compete with Intel now?

      AMD. Because AMD doesn't have to waste money spending it on an idle fab plant or one that's not running at capacity they can spend more money on research. Meanwhile the fab business can make more money by contracting the fabrication of chips for other design businesses. Both businesses can benefit.

      Falcon

  • by twmcneil (942300) on Tuesday October 07, 2008 @09:45AM (#25285263)
    So the bottom line is that the Abu Dhabi Government is buying AMD?
  • by postbigbang (761081) on Tuesday October 07, 2008 @10:05AM (#25285565)

    A hot fab is useless unless you can get product to market, and sell into the markets you need to achieve sales goals. AMD hasn't done this.

    While they have very good engineers, they're weak in so many places. An infusion of foreign capital makes no sense if you can't get the basics right.

    Yes, Intel, IMHO, used illegal tactics to kill AMD at many turns. AMD needs to recruit the best and brightest and get a regime change in motion to diffuse their preyed-upon attitude. They could lead again, but not with the current regime.

    Chopping the company into bits will be a distraction, not a savior.

  • I don't know what it was, but it also split in two. It was a slow process mind you, took about a week before the split finished.

    Then it died in a few months after the split. I think the problem was that I never put the plant into a bigger pot. It split in two and now needed twice as many resources to survive, and that small pot was simply not enough room for its roots.

    So imagine my surprise when I read this story and realized that the exact same thing happened to my plant.

  • 1) AMD Spins of fabs.
    2) Intel/VIA/TMSC/IBM buys AMD Fabs.
    3) Intel/VIA/TMSC/IBM Fabs charges huge price to manufacture AMD CPU's.
    4) AMD CPU Prices skyrocket. Unable to find a cheap reliable FAB, AMD loses price competitive edge.
    5) AMD Stock tanks.
    6) ...
    7) LOSS.

    • by Pulzar (81031)

      5) AMD Stock tanks.

      Well, that has already happened, so they might as well try something new.

    • Re: (Score:2, Insightful)

      by skulgnome (1114401)

      Or...

      3) Intel/VIA/TMSC/IBM Fabs sticks to contractual obligations it has with AMD that carried over from when it was still AMD Fabs.
      4) AMD keeps dominating the x86-64 server market.

      These corporate types aren't stupid, you know. This is the obvious fear factor, and the stockholders would never go along with the plan if this fear were not addressed.

    • 2) Intel/VIA/TMSC/IBM buys AMD Fabs.

      Who are they buying it from?

      Falcon

  • by matt_martin (159394) on Tuesday October 07, 2008 @10:31AM (#25285993) Homepage Journal

    Once again, another American company selling off to foreign investors.
    Another powerhouse US industry falling to the wayside.
    Sucks that I foolishly spent many years studying to work in said industry.

    At least both presidential candidates are planning to retrain me to sell cars or something.

    • Re: (Score:3, Insightful)

      by ChrisA90278 (905188)

      No. That "sound" is the sound of technology moving forward. At one steel mills were "high tech" but now it's a low tech "smoke stack industry" that has move over seas. It one point electronic assemby was a high tech industry and now it's moved to China where un-educated one time farmers can build iPhones. My point is that the cutting edge moves fast. The nest wave will be biology. Kids today who want to be on top and work in high tech should be taking Chemistry and Microbiology in school. Electrical

    • by rahvin112 (446269)

      Another American company failing that had most of it's design and manufacturing in Germany. AMD sold itself to the Europeans years ago. Do you really think the EU would bring an anti-trust case against AMD if there weren't German jobs on the line?

      Don't kid yourself, the death of AMD will be good news for US jobs.

  • Where did all these unpaid shills in the replies come from, anyway?

    AMD started out as a third party fab for Intel's CPUs. Maybe a few years from now this spun off company will move into chip design too, though hopefully by then there'll be enough people using platform-independent OSes that they won't feel compelled to make yet another x86.

    • AMD started out as a third party fab for Intel's CPUs.

      AMD had other product lines before Intel even had anything that looked like a CPU. Do you remember the 2900 series bit-slice processors and microprogram controllers that were the core of machines in mid-late 70's (and into the early 80's) - that was AMD. They also made RAM.

      I'm not saything that this is a good move for AMD - they probably won't survive this. But try to get the history right.

  • by Eskarel (565631) on Tuesday October 07, 2008 @11:19AM (#25286807)
    AMD have a lot of issues, and they've made a lot of mistakes.

    They got greedy when they were on top, and charged too much for processors which allowed Intel to do to them exactly what they did to Intel(swoop in with cheaper parts).

    They've also got some problems with maintaining any presence in the top end of the CPU market. This isn't a huge deal for fabrication as almost no one buys those thousand dollar CPUs anyway, but those thousand dollar CPUs are your next generation main stream CPUs so you've got to have them.

    They've also had some issues because they aren't big enough to take what's been happening in the market lately as easily as Intel has. AMD is now worth less than they paid for ATI, they're not alone in being worth a lot less, but it's not as visible for other companies.

    Essentially the biggest thing this does is allow AMD the design company to ditch its debts into AMD the fab company. Investors will be much more willing to accept debt in the fab company because at the very least the assets are worth cash and it won't be dependent on whether AMD can come up with something halfway decent design wise. If the design company goes under, they can always just go fab Intel CPUs.

    The design company on the other hand, after offloading a whole lot of its debt, is much more likely to stay alive long enough to fix things. They've got to get designs out into the market, they've got to be cheaper, and they've got to be at least almost as good as the Intel parts, but they have to survive long enough to do that.

    Realistically, AMD will probably buy the company back if they do survive because having your own fabrication facilities is probably key to being in the top of this market, but in the meanwhile they get to stay alive in a failing economy, a credit crunch, and a time of total lack of vision for the future.

    This split, silly as it sounds, may allow them to survive long enough to do this, and at the very least might keep Intel worried enough that they don't go back to the old days for a few more years.

    • by Spatial (1235392)

      They've also got some problems with maintaining any presence in the top end of the CPU market. This isn't a huge deal for fabrication as almost no one buys those thousand dollar CPUs anyway, but those thousand dollar CPUs are your next generation main stream CPUs so you've got to have them.

      Not just the top end. Look at Intel's mainstream C2D E8400: a stock 3Ghz chip with a peak power draw of about 40 watts, equal in performance to a hypothetical 4.2Ghz Athlon X2. That's amazing, but it gets worse for AMD. Intel are so far ahead they can pull their punches right now; the E8400 is routinely overclocked by ~600Mhz without even changing the stock HSF, and can reach well over 4Ghz with some cooling improvements. Intel's manufacturing process is so good, I think they could put out a stock 4Ghz m

    • by kesuki (321456)

      amd doesn't have any thousand dollar chips and i can't remember when the last time they had a chip that expensive was. maybe 2004? earlier? i know it hasn't been in the past 3 years, for 100%

      and right now, AMD has the cheapest dual core chip at newegg, although it is an x2. http://www.newegg.com/Product/Product.aspx?Item=N82E16819103215 [newegg.com] vs intel's cheapest celeron http://www.newegg.com/Product/Product.aspx?Item=N82E16819116064 [newegg.com]

      as far as 'having the lead' goes the world of benchmarking systems is as corrupt

      • by Eskarel (565631)
        They might not have thousand dollar chips where you live, but they sure as hell do where I live.

        The top of the range intel quad cores(if you can find them) were close to a grand before our dollar shat itself.

  • by ChrisA90278 (905188) on Tuesday October 07, 2008 @12:47PM (#25288301)

    I read that Gordon Moore once explained his "Moore's law" as being economic, not technical. He said that when Intel builds a new plant, each new plant costs about twice as much as the last one. so he said at some point a plant will cost more money then there is on earth so they will have to stop buiding new plants at some point and then Moore's law will end. I think what we are seeing is the front end of this. A few smaller companies are finding they can build new fab plants. Maybe in 20 year even Intel will have to do what AMD is doing and then we will see the end of exponential growth.

    The key observation here was by Gordon Moore that growth in the number of transisters is due to growth in capital spending on fab plants, not technology.

    • by treeves (963993)
      You can say it's due to both, rather than technology alone, but you can't say it's due to capital alone, with no new technology. It is evolution of technology, mostly, not breakthroughs, but it's advancing technology just the same.
  • They have been building new access roads like crazy in anticipation of this new fab plant, which they didn't know was coming for sure until today. On the one hand, I'm glad that all the construction wasn't for nothing. And local homeowners are excited that their unsellable homes may soon be in demand. But it is still going to suck big time for the local environment, not to mention how the traffic will make life there miserable. And I have a strong suspicion that all those new corporate tax dollars won't red
  • This has been tried before, by other ailing IC-making firms, and it didn't help them survive to the present day; why should it be any better a strategy for AMD?

    Corporate cost-cutting strategies are idiotic and political. They're temporary band-aids, and not very good ones. Selling material assets at a loss or sending human resources packing in order to make the bottom line APPEAR better is moronic and short-sighted, and it never really helps. Keeping those assets and more effectively utilizing them is th

  • So hot on the heels of AMD's "Fusion" ad campaign, they are splitting the company in half?

    Looks like AMD got fusion and fission mixed up.

    Fusion, fission... both seem appropriate considering the mushroom cloud floating atop AMD's market value crater.

    As someone still holding AMD (even after watching the Fusion ad over at The New York Times), I applaud this move. By which I mean, "Things couldn't possibly get any worse!" (/knocks on wood).

Mirrors should reflect a little before throwing back images. -- Jean Cocteau

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