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AMD Considering Getting Out of Fabrication Business

Posted by Zonk on from the say-hey-hey-goodbye dept.

mytrip writes "2007 has not been kind to AMD, but it's surprising to hear rumours that they might be considering outsourcing chip fabrication. Analysts are predicting that AMD will try to cut costs by moving some fabrication elements out of the company by early next year. 'One Citigroup analyst is predicting a "transformational move" that would result in AMD's lower-end CPUs being manufactured by a third party and possibly selling off part or all of its Dresden, Germany facility. Another report from Goldman Sachs outlines the investment firm's belief that the company will leave manufacturing completely in the hands of third parties.'"

10 of 229 comments (clear)

  1. What a Busines by SEWilco · · Score: 5, Funny

    There's no Busines
    Like Show Busines...

    1. Re:What a Busines by OverlordQ · · Score: 5, Funny

      Didn't you RTFA? AMD is low on funds, they couldn't afford the second s.

      --
      Your hair look like poop, Bob! - Wanker.
  2. Re:Busines? by Anonymous Coward · · Score: 5, Funny

    Alternate correction:

    AMD Considerin' Gettin' Out o Fabricatin Biznes, Yo!

  3. I hate to say it... by jhfry · · Score: 5, Insightful

    but this might actually be a "good thing."

    Why? Because the main reason that no one but AMD can curretnly compete is because of the hight cost of the fab's... If third party fabs, capable of producing transistors the size that Intel makes, start springing up around the world we will probably see other design companies come out of the woodwork and start producing innovative and competitive chip designs.

    If Via, for example, could produce chips in a 65nm fab in reasonable volumes... they might compete for the laptop market.

    It may not be the best move for AMD, but for the buying public it should encourage innovation and competition. Which ultimately benefits everyone.

    --
    Sometimes the best solution is to stop wasting time looking for an easy solution.
    1. Re:I hate to say it... by suv4x4 · · Score: 5, Interesting

      but this might actually be a "good thing."
      It may not be the best move for AMD, but for the buying public it should encourage innovation and competition. Which ultimately benefits everyone.

      Don't even kid about it. It's a path that once taken will be very hard to revert for AMD. Before you know it they'll outsource the rest of their fab, then sell their design to someone, and all that will be left, is a patent troll.

      Last time when we discussed AMD's poor financial performance, I critized a guy who said we should buy AMD to support them, or the future may be quite grim, with Intel (being de facto complete monopolist on the x86 market) raising prices and stagnating.

      When I read THIS article, I gotta say, that fear makes me think more like this guy and I'm suddenly feeling the need to buy AMD chips for the hell of it. I know it's wrong.

      I always suspected that if they continue performing badly, IBM could consider purchasing them and entering the market of x86 chips. Both companies have worked together for a long time and share lots of technologies, some fab and many processes and design decisions.

      Thing is, I didn't expect AMD to begin falling apart by itself, by selling some of its fab business. If they continue trying to minimize their losses by destroying themselves in this way, soon no one will want to have anything with them at all.

      What a sad fate.

    2. Re:I hate to say it... by MITEgghead · · Score: 5, Informative

      In reality, there are already plenty of third-party fabs out there. For instance, TSMC. And they have a 65nm process and that's what ATI's new 2000 HD series is manufactured on. So AMD (which includes ATI) is already manufacturing a lot of chips through a third-party. Even more than that, the current lowest end AMD processors, the Geode family, which is being used for the OLPC is also already manufactured by a third-party.

      The only contention in this story is that AMD will be moving more low-end manufacturing to third-parties. The highest-end CPU's really have to be manufactured by the company itself. Not only does AMD have to stay as close to the bleeding edge as possible but they also have to have control enough to add certain devices or change certain design constraints. The change in volume to a TSMC or other third-party manufacturer from moving over some of AMD's manufacuting would not affect their bottom line or cost very much at all.

      In addition, there are plenty of companies making various chips for all kinds of purposes. The limiting factor for new entries into the general purpose processor business is not the fab technology . A company can find the few million to make the masks and start making runs but the number of engineers they would need to compete with a design from Intel or AMD is enormous and would take years. In addition, Via could make a chip at 65nm right now if they wanted to but they don't have the partners or the platforms or market for those chips so they're not going to do it.

      So while I'm looking forward to the day when there can be lots of players in the high-performance CPU business, the day is not here yet and this rumor, even if it were true, would do almost nothing to bring it closer.

    3. Re:I hate to say it... by jd · · Score: 5, Insightful
      One CPU manufacturer, one GPU manufacturer... This is in no way a good thing. With ATI being bought out, the market has lost TWO major vendors, not one. Worse, Intel has dumped their network processor, Transmeta is dead, Freescale is practically dead, rival chips are dead or dying, Intel is reducing their diversity, are losing their knowledge-base and only change when competitors get close.

      We need more competition, not less. If there was ever a time when subsidies were a good idea, this would be it.

      --
      It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
  4. Queue up years of a true Intel monopoly. by Spazntwich · · Score: 5, Interesting

    Lately, IBM and AMD have been the only firms out there capable of keeping up with Intel's process advances, with most of AMD's due in significant part to IBM. This move could well usher in an era of consumer level technology stagnation. We saw what Intel did while AMD was a non-competitor (how many damn generations did they ride the basic pentium pro architecture??) and how badly they react to renewed competition (Yeah, great job on both the 1.13ghz P3 and the whole Netburst architecture). Intel has just in the past year or so bothered to give consumers worthy processors, and now if IBM doesn't decide to take a look at the consumer market and keep Intel on its toes, well, we're fucked.

    Awesome news! Next up, Torvalds indicted on murder charges when a mailing list discussion gets so heated he sticks a pointer straight through a face? Netcraft confirmation of BSD's death? Ron Paul is assassinated as republicrats cheer in the streets? :'(

  5. Works for NVIDIA by daVinci1980 · · Score: 5, Informative

    Being fabless works for lots of companies, for example NVIDIA (disclaimer: I work for the gentle green giant).

    There are lots of companies who only do fabrication, just as there are many other fabless semiconductor companies. With process shrinks occuring as quickly as they are today, it makes a lot of sense to let someone else (or several other someone elses) deal with the cost of developing fab facilities capable of the latest and greatest process size.

    --
    I currently have no clever signature witicism to add here.
  6. The sad state of affaird by guacamole · · Score: 5, Informative

    It is well known that running a state-of-art foundry efficiently requires ginormous production volumes, so most semiconductor companies go fabless these days. However, if a company like AMD can't afford its own fab, then Intel might have a huge advantage here and we might see less competition in the microprocessor market from now. Just look at Sun's experience. Sun Microsystems had been historically fabless. Their newest SPARC processors were being fabricated primarily by Texas Instruments, and Texas Instruments has pretty much ruined Sun's ability to compete with Intel on CPU speed because it often took TI years to start producing a new Sun chip in significant numbers. I remember how Sun's introduction of UltraSPARC III was the longest and most painful CPU rollout ever. It took them something like three or four years to replace the major UltraSPARC II products.