AMD Wafer Fab Spinoff Announcement Imminent?

It looks like the rumored spin-off of AMD's manufacturing operations is just hours away now and reports are starting to ping across the wire of a "significant announcement" that AMD CEO Dirk Meyer will be making shortly.  In fact, we've been invited to a press web cast at 8AM EST that AMD will hold in the morning.  Historically, AMD has taken largely an in-house fabrication model for their wafer fabrication.  However, capitalizing this effort is a huge recurring and perpetual investment that frankly only makes sense if there are significant and off-setting economies of scale. 

As process geometries are being driven hard by AMD's primary competitor, Intel, it makes a good business case to outsource this effort with the likes of TSMC and others where the core competancy is solely focused on wafer fab process technologies and capitalization for equipment resources.  The WSJ reports, "Advanced Micro Devices Inc. Tuesday is announcing a broad plan to cut costs by spinning off its manufacturing operations to a new joint venture, according to people familiar with the matter.

The new venture, which will make chips for AMD and other companies, will take over facilities that include large AMD factories in Germany, with funding provided by investment entities associated with the government of Abu Dhabi, these people said. They will contribute cash to the venture as well."

The fact of the matter is most semiconductor manufacturers operate under an outsourced fabrication model like this and there is an excellent business case for the obvious cost efficiencies of not having to maintain your own fabrication lines and drive costly, bleeding-edge process technologies.  AMD will join the ranks of NVIDIA and many others with this new model, if it comes to pass (which it certainly does look very likely).  With the current economic conditions, we think they're definitely making the right move.  More details to come after our press webcast briefing tomorrow morning.

Via:  WSJ
Tags:  AMD, Fab, Men, Wafer, spinoff, Pi, eme, Mine, IM, PIN, AM
Super Dave 6 years ago

[quote user="News"]AMD will join the ranks of NVIDIA and many others with this new model, if it comes to pass (which it certainly does look very likely).  [/quote] 

I am aware that Nvidia has had some problems of late, and I have to wonder if this is a wise move for AMD. Anyone?

bob_on_the_cob 6 years ago

maybe this will be good for AMD. Let someone else build them and all they have to worry about is research and marketing.

3vi1 6 years ago

Great... now Intel has that much less incentive to improve their fabrication process, instead of making profit on the status quo. :(

amdcrankitup 6 years ago

Its probably a good move on AMD,s part because of the cost effectiveness and put more cash into research! Too bad they dont outsource to the United States and produce them here.Just might breathe into the US economy! Hey we have a BMW plant 20 miles from where I live we also Have several tech companies here also. Ah well just a Plug for the US!

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