After months (years?) of speculation, AMD finally announced details of its plan to go fabless. Or is it Asset-Light? Or Asset-Smart? Let's just call it fabless, like everyone else in the industry.
Read the details in
A.M.D. to Split Into Two Operations - NYTimes.com.
Amidst a battered overall market, AMD shares had a nice pop today:
So AMD is going to get a cash injection from a middle east "sovereign wealth" fund, plus a commitment to further invest in the fabs that they will jointly own. This is a good short-term financial shot in the arm.
We know that AMD can compete with Intel on design. The challenge has always been, how much of a disadvantage do they suffer by not having the most advanced fabs? This will be the long-term challenge, to see how well the JV will be able to compete with Intel's fab muscle as we go below 40nm and use exotic recipes such as "High-K Metal Gate". At least AMD will live to fight another day.
Update: For some skepticism on the added value and future prospects of the plan, see the story and comments under Who Benefits From A.M.D.’s Financial Engineering? - Bits Blog - NYTimes.com
1 comment:
I think this is a very smart move by AMD. Given the fact that AMD has never able to compete effectively against Intel under the old model, they will never able to compete unless they fundamentally change their business.
By divorcing the design and fab business, their foundry will have the potential to become "the fab" for the middle-east's fabless semi companies (few but coming). On the other hand, their design house has the option to outsource (or second-source) to other foundry to access to more advance technology if necessary.
Now, all that comes with the assumption the 2 new entities can indeed operate as 2 separate companies. Otherwise, if their partners continue to see them as the same old AMD. Well, we are back to square one.
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