Slashdot Mirror
AMD Gives Up Its Share In GlobalFoundries
MrSeb writes "Three years ago today, AMD spun off its fab division, in a move the company claimed would allow it to more effectively leverage its assets, inject new capital into the foundry side of the business, and make it more competitive vis-à-vis Chipzilla. Today, that dream is dead. AMD announced today that it would give up its 8.8% equity stake in the company. When AMD created GlobalFoundries in 2009, the company held a 34.2% share in the foundry. The main thing that AMD gains from this deal is manufacturing flexibility. Previously, Sunnyvale had agreed to manufacture 28nm APUs solely with GlobalFoundries. This new agreement voids that arrangement, freeing AMD to work with TSMC and other foundries.. It's not an agreement that came cheap, though — not only is AMD giving up its 8.8% equity share of GF, it's agreed to pay the manufacturer some $425 million by the end of Q1 2013. AMD will take a $703M charge against the transaction. It's unclear how this move will pan out. We know AMD killed Krishna/Wichita due to manufacturing problems, Llano limped along for most of 2011, and GF's problems at 32nm impacted AMD's ability to sell 45nm chips into the channel. From a macroeconomic perspective, AMD is simply transferring its business to a foundry partner that's more able to meet its needs. One could argue that AMD's decision to get out of the foundry business is a logical extension of new-CEO Rory Read's plan to de-emphasize cutting-edge silicon in favor of SoCs. Time will tell."
After some eyebrow knitting, my best guess is "Systems on a Chip"? Eschew obfuscation, expand jargon abbreviations.
[
It's like... Ford decides to spin off its auto business so it isn't tied down to one manufacturer, and can then produce Ford's at Chevy and Dodge and even Honda plants.
Chevy, Dodge and Honda are competitors of Ford, AMD isn't doing this to be able to manufacture chips at a foundry owned by Intel.
Why does it seem like someone decided the AMD brand was more valuable than its product?
Because you don't understand what's happening. This move enables AMD to build chips at any foundry, in fact it means they can use the best foundry rather than being tied to an underperforming one thus resulting in a better product.