AMD Chief Executive: Major Restructuring Will Spin Off Manufacturing in Months

[Kougar]

Dirk Meyer, the new chief executive officer of Advanced Micro Devices, said in an interview with a news-paper that the company would spin off its manufacturing operations in months time as a part of its asset smart strategy. This is the first confirmation of the expected action by AMD’s high-ranking executive.


Austin American Statesman news-paper quotes Mr. Meyer as saying that “the company is just months away from a major restructuring that will spin the manufacturing operations off into a separate company, with new ownership”. It remains to be seen whether there will be one or two owners of the “AMD Semiconductor” company or the parent chipmaker will just make initial public offering (IPO) and issues new shares.

The rest of the article is available here (http://www.xbitlabs.com/news/other/display/20080722222459_AMD_Chief_Executive_Major_Restructu ring_Will_Spin_Off_Manufacturing_in_Months.html).


This is kind of big news! On the face of it, it is actually a really good idea. The new fabbing company should easily be able to turn a profit fabbing silicon chips for other companies, as AMD currently can offer 45nm high-K dielectric chips using 300mm wafers, and has extensive use with SOI.

I think the bigger question now is what happens to AMD itself... this would in effect completely divest off their largest book value assets, and send the company's equity ratio down the drain. What do y'all think?

[AJ.]

So let me get this straight- basically, they'll provide the designs and outsource their manufacturing because they can't afford the operational costs of running up-to-date machinery? If that's the case, I think it's awesome news. It's very smart move on AMD's part that will ultimately ensure the financial stability they've desperately been looking for. Not only that, they'll be able to compete with Intel more than ever before.

[AJ.]

You'd expect a bigger reaction from the community after such a big announcement. lol

[bobletman]

Meh This will either make or break AMD.

[Raptorfury]

it will help em out finacially , bc the main fab will also bring in money , in order to take care of its own but also allow amd a plant that has the most up to date prcoesses and a fraction of the cost if they were to build it on there own .. yes it would bring down actual value of amd , but it will allow amd to put more money into r&d

[Kougar]

AJ, I had assumed it meant that this new company would use the two FABs to build chips, for AMD, ATI, and outside companies that are willing to pay for it. Just like TSMC and UMC, who produce semiconductors for quite a few people in addition to GPUs.

There is an update to this, currently AMD is claiming their new CEO was misunderstood. Considering the report originated in the Austin, TX newspaper from a direct interview with Dirk Meyer, I'm left wondering... Make of it what you will. http://www.eweek.com/c/a/Desktops-and-Notebooks/AMD-Denies-Fab-Sell-Off/

[AJ.]

Very interesting. I look forward to hearing more about this. It seems like AMD want to get their act together once and for all. I sure hope they do before it's too late.

Thanks for the info Kougar.

[Kougar]

Sure thing. Personally, this "asset management initiative" AMD has been touting can't remain a secret for much longer, is has to mean something, because it already sounds like it is only a hollow marketing term to give a faint ray of hope to their shareholders and string them along with.

What AMD needs is clear, decisive action and instead they are still playing smoke & mirrors with this active asset management stuff... I am still wondering if the two are interrelated though, despite the denial.

['Amp!']

The potential downside to all of this is that AMD will now be left at the mercy of the Fab company when it comes time for an update.

Want to move to 32nm but the Fab company isn't there yet? Too bad.

[AJ.]

That could happen, but I think all this is temporary. I honestly don't think they'll stick with this for too long. It's just some scheme to pull themselves out of the hole. Nobody likes to depend on others, especially in business. Too many things can go wrong and there really is no stability.

[PP Mguire]

I dont like depending on anybody for anything. I live by the rule of if you want it done do it yourself.