Linked by David Adams on Fri 12th Sep 2008 16:30 UTC, submitted by irbis
AMD AMD plans to spin off its chip manufacturing operations by year's end, probably by hawking them outright or by inking a partnership with a larger chipmaker -- a maneuver akin to selling a house and leasing it back. Meyer is vague on the exact timing of a deal, but he knows it's probably the best thing the company can do quickly to improve its financial position, and its reputation with investors. A successful transaction would see AMD pocket a good chunk of cash, while handing manufacturing to a company that can better keep pace with Intel's world-class operations.
Permalink for comment 330172
To read all comments associated with this story, please click here.
A better model...
by TemporalBeing on Fri 12th Sep 2008 17:29 UTC
TemporalBeing
Member since:
2007-08-22

Well...selling of the fabs might raise revenue now, but could put AMD in a bind in the long term since they would be fully reliant on outside providers for their core business. A better model would be to hirer additional capacity in the proposed manner and keep the current capacity - thus enabling delivery sooner but not making the company dependent on external sources.

Things tend to go cyclically too - one generation likes everything in-house, another wants it all out-sourced. Unfortunately, this is not one of those decisions you could make lightly - it'll be very hard (and extremely expensive) to bring it back in-house. So it's an success-or-die approach.

Wish more business execs had better common sense, logic, etc. Sad to see AMD do this though.

Reply Score: 2