AMD to spin off fabs, claims analyst
Chip maker to remodel itself on Nvidia et al?
Is AMD about to announce that it's going to reinvent itself as a fabless semiconductor company? That's certainly what one analyst thinks.
John Lau, an analyst with investment hous Jefferies & Co. this week told his clients that moles have told him AMD has such a strategy in mind and might announce the plan as early as mid-September, the Austin American Statesman writes.
Lau's forecast is that AMD will say it's seeking a buyer or buyers for its Fab 36 and Fab 38 facilities in Dresden, Germany. In the meantime, the fabs will be spun off as a separate company. The spin-off will be free to produce chips for the other companies, not just AMD, and to seek investment on the open market.
For its part, AMD rids itself of one of its biggest overheads: the cost of building, equipping and maintaining fabs on an ongoing basis as fabrication technology evolves. This isn't cheap by any means, and for a chip maker as financially troubled as AMD is, it's arguably something of a neck-wrapping millstone.
Such a spin-off would also make it easier for the company to strike production deals with other foundries. It already does this to a small extent: it uses Singapore's Chartered to produce 64-bit processors, and its graphics wing uses the likes of Taiwan's TSMC to punch out product.
Lau hinted that AMD may have already lined up an investor, a "Middle East investment group" that will "acquire a large position in the new foundry and fund its purchase with cash".
Last month, AMD sold off its TV chip business, part of its ATI acquisition, to semiconductor company Broadcom. It got $192.8m in cash - it has a long way to go to wipe out its $5bn debt, incurred after the company lost $1.19bn during Q2.
COMMENTS
Austin + AMD = No Love
Austin doesn't care for AMD. Really. A lot.
They built a new complex right over the recharge zone of a very fragile aquifer, one that's already overloaded from too much development. They sold their old fab to a subsidiary, and collected huge tax write-offs on the new building.
Now they get to sell their new building, and no doubt keep the tax deductions. Way to go!
@Brian Miller
I totally agree. Fabrication must continue to be closely coupled with design otherwise AMD will simply become another x86 compatible has-been. I hope that doesn't happen since AMD is the only real competitor Intel has, and without competition Intel will not be motivated to create high quality product for reasonable prices.
what a bunch of pap
They will lose the only competitive advantage that they have over intel.
The ability control the pricing on it's chips.
What is going to motivate these fabs to perfect the newer processes for optimal yields of AMD specific designs.
I understand GPU's getting farmed out because they are always at least a generation behind CPU's (usually) in terms of fabriaction processes. The design and fabrication of CPU's are not independant processes. Iterations of design should take into consideration the existing limitations of fabrication and adjust accordingly.
Without access to the fabs and people "on the ground" there then they will lose touch of these limitations and suffer.
