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.
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A better model...
by TemporalBeing on Fri 12th Sep 2008 17:29 UTC
Member since:

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

RE: A better model...
by Liquidator on Sat 13th Sep 2008 08:56 in reply to "A better model..."
Liquidator Member since:

Over the last few years I have always bought AMD CPUs because they are quality, affordable and most of all to contribute maintaining healthy competition. I hope the recent decisions don't allow Intel to be the king and raise their prices...

Reply Parent Score: 3

RE: A better model...
by Adurbe on Mon 15th Sep 2008 12:31 in reply to "A better model..."
Adurbe Member since:

While they had this inhouse, they are forced to use their own fabs, even if they are not the best option.

By seperating that part of the biz they can now use any manufacturer they wish, be it IBM, Freescale or anyone else! (I doubt they will use intel fabs, at least in the short term!)

Reply Parent Score: 2