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One company will design chips, the other will manufacture them

It’s no secret that AMD has been in trouble lately.  Despite gaining a commanding position in the graphics industry, the chipmaker giant has been beaten by Intel in the microprocessor market.  With AMD's first 45 nm product, Shanghai, forced to try to enter the market at the same time as Intel's second generation 45 nm Nehalem, and with consist quarterly losses something had to be done.

Today AMD announced a shocking decision that will rock the computer industry -- in order to try to stay competitive, it is splitting in two.  From the ashes of AMD will rise two companies. One will design chips and keep the brand name.  The other, officially named the Foundry Company, will manufacture chips.  The two companies will work closely together, but be independent.

The move also came with good news -- two Abu Dhabi companies have elected to inject at least $5.7B USD into the pair of companies.  Most of this money will go to the Foundry Company, which will use it to build a new factory in Albany, N.Y., and to upgrade its Dresden, Germany factory.

AMD retains a 44.4 percent stake in the new company.  The majority ownership belongs to Advanced Technology Investment Company.  Advanced Technology, a company created by Abu Dhabi's wealthy government, has promised immediate investment of $2.1B USD into the pair.  It says it will follow this with an additional investment that could be anywhere from $3.6B to $6B USD.  Despite the majority stake, Advanced Technology consented to have an equal number of votes as AMD on the Foundry Company's board.

Advanced Technology isn't the only Abu Dhabi company to want a big piece of the AMD pie either.  Mubadala Development Company, which bought an 8 percent stake in AMD last November, will pay $314M USD to buy 58 million shares of AMD stock, to bring its stake in the presplit company to 19.3 percent.  Mubadala and Advanced Technology, despite being competitors in some respects, worked together closely on the new deal.

Khaldoon Al Mubarak, chief executive of Mubadala, states, "We generally believe this deal is a game changer for the industry.  It’s bold, and I think it’s smart."

Waleed al-Mokarrab, chairman of Advanced Technology added about AMD's recent struggles, "Yes, it is a cyclical business, but over time the trajectory is always upwards"

The AMD move is a bit of a shock to the electronics industry, but not an entire surprise.  The company recently announced it was $5.3B USD in debt, with only $1.6B USD of cash on hand.  AMD’s chief executive, Dirk Meyer, said the timing was right to turn for help.  He stated, "This is the biggest announcement in our history.  This will make us a financially stronger company, both in the near term and in the long term, as a result of being out from the capital expense burden we have had to bear."

Before AMD can be officially split up, the deal must meet regulatory and shareholder scrutiny.  The deal is expected to be complete by 2009.  The newly spawned Foundry Company will produce chips for others besides AMD.  It will also compete with the independent Asian foundry firms such as TSMC

The split may strike some as a bit ironic as AMD’s co-founder and longtime chief executive, W. J. Sanders III, known as Jerry, once quipped "real men have fabs", according to company lore.  New CEO Mr. Meyer referenced the joke stating, "We feel like we’re still pretty manly at AMD.  Frankly, the math has changed."

The Foundry Company at launch will control AMD's two chip foundries in Dresden, Germany.  One is in need of an upgrade to make modern chips.  Plans will continue to build the larger state-of-the-art Malta, N.Y. foundry, which will cost $3.2B USD.  The state of New York is offering the new company $1.2B USD in incentives to build the plant, as it will employ 1,400 workers.  The Foundry Company will assume $1.2B USD, or roughly a quarter, of AMD's debt

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By EntreHoras on 10/7/2008 10:02:07 AM , Rating: 3
Is this a direct consequence of the purchase of ATI?
I think so.
Any benefit that purchase may have in the technological plane is outweighed by the deviation of resources to this purchase and now we are seeing the consequences.

By Locutus465 on 10/7/2008 10:07:46 AM , Rating: 5
The ATI purchase was a good idea executed at the wrong time. It really did pay off for AMD in terms of platform capabilities, and it seems AMD software devs really straightend out the ATI software team. But unfortunetly the core CPU business has just been unable to keep up which is both saddening and befuddling. AMD is in no where near as bad a spot (cpu archetecture wise) as Intel was with the P4 line. I still don't think AMD needs a ground up redesign to get competitive, I think they just need to make deeper modifications than they have been willing to make.

Perhaps management is being stupid and is unwilling to spend research dollars on deeper mods to the CPU? Thinking that "well we're still the best on the server side which is the most important side anyway". Unfortunetly for them, Intel just proved you can sit around too long even there, because you'll be left in the dust which is exactly what has happend.

AMD's current troubles doesn't just feel like the troubles a small company faces when competing with a larger one. It feels like bad management.

By omnicronx on 10/7/2008 10:08:09 AM , Rating: 3
AMD's fab troubles have dated back much further than the ATI acquisition, one of the main reasons AMD was unable to take more marketshare from Intel during the A64 days was because they were unable to keep up with production, they just were not able to produce enough chips and Intel took advantage.

By FITCamaro on 10/7/2008 10:52:24 AM , Rating: 2
Yeah it took them forever to get off using 200mm wafers and move to 300mm. Now Intel is moving to what? 400-450mm wafers?

By ianweck on 10/7/2008 12:58:38 PM , Rating: 2
Yeah it took them forever to get off using 200mm wafers and move to 300mm. Now Intel is moving to what? 400-450mm wafers?

Intel would LIKE to transition to 450mm wafers, but their equipment suppliers up to now have balked at investing the money needed to engineer the new equipment. There are no imminent plans to move to 450mm yet though that I have heard.

By Cullinaire on 10/8/2008 7:02:20 AM , Rating: 2
Pulling wafers is going to get a whole lot more interesting if the transition ever does happen!

By William Gaatjes on 10/7/2008 12:31:33 PM , Rating: 2
Was there also not a contract between AMD and Intel that limited the amount of cpu 's AMD could outsource to other foundries at that time during the P4 - Athlon64 timeframe ? If i remember correctly AMD could have produced more if they where allowed to go to other foundries but they where not. How the contracts between Intel and AMD are now i have no idea.

By Bateluer on 10/7/2008 10:10:06 AM , Rating: 5
No sane person wants to see the end of AMD. Hopefully this allows AMD to focus on designing better CPUs and the Foundry Company to make more money by manufacturing chips from AMD and others.

I'm most concerned about Abu Dhabi and UAE owning such a larger percentage.

By Master Kenobi on 10/7/2008 10:32:45 AM , Rating: 1
Given the number of Opteron processors that the US Govt buys I'm also concerned by the increased investment from the middle east. The US Govt tends to use that as a penalty. Nehalem might mark the beginning of Intel in servers where previously Opteron reigned supreme.

By crystal clear on 10/7/2008 10:59:31 AM , Rating: 1
Timing of this deal is bad & will bring about a harsh response from the Govt to shareholders & people in general.

This is a BAILOUT package for AMD on the brink of bankcruptsy.

AMD can expect a very hostile reaction for this in the future.

Intel which licenses technologies to AMD will/may object to this agreement- there are legal issues involved in these licenses.

By Locutus465 on 10/7/2008 11:02:26 AM , Rating: 2
How do you figure the break up will be viewed in these terms? It will make both companies much more streamlined.

By crystal clear on 10/7/2008 11:23:35 AM , Rating: 1
Given the current economic climate in the USA-if you live in the USA you will be certainly aware of the current mood prevailing there.

Sovereign funds when switch their role from a silent partner to a holding controling interest with seats on the Board of directors in a company like AMD,then dont expect smooth sailing.

AMD should have first approached the shareholders to get their acceptance before making such a deal.

By SandmanWN on 10/7/2008 12:15:13 PM , Rating: 3
given the large number of rumors hinting at this very thing for some time now it seems like they've already let their major stock holders in on the deal. maybe you've just missed all the signs.

regardless the market sees this as a positive and rightly so. all you need to do is look at TSMC and see that these fabs can be much more profitable than what amd is currently utilizing them for. not to mention this locks in the NY fab and a major production expansion for amd/foundry.

its really hard to look at this as a negative and the market is in complete agreement what is looking like a very positive stock swing. amd/ati will continue to come up with great ideas. amd/foundry will open the doors to its fabs and will allow for many more business opportunities to thrive.

how you see this as a negative is beyond me. this is the opposite of what has caused the downturn in the US. instead of monetary outflow this money is coming from the outside in which is what we've been striving for.

By crystal clear on 10/8/2008 10:25:57 AM , Rating: 2
Sorry couldnt respond earlier was very busy with some unfinished business before closing off for YOM KIPPUR.

its really hard to look at this as a negative and the market is in complete agreement what is looking like a very positive stock swing.

AMD prices at closing 4.59.....still very low...does not reflect any positive stock swing,

Semiconductor makers are currently awash in production capacity, which tends to drive down chip prices and profits from making them. "It's a highly competitive business out there, and not always with good margins,"

I sign off now with this-

"AMD has found a way to compete with Intel's balance sheet by using Abu Dhabi's balance sheet," Mr. Sanders said

By SandmanWN on 10/8/2008 11:08:48 AM , Rating: 2
No need to apologize. I would rather you didn't respond to begin with because you really don't have anything of substance in your post. Really it was a waste of time for anyone to read.

A positive during a time where stocks have basically plummeted by 20% is a significant upswing.

-A significant injection of capital while maintaining majority share.
-Increase in production capacity.
-Opening doors to new market opportunities through either design or manufacturing.

Im done with blind pessimism in the face a great opportunity. Dissuade if you must but I will listen no more.

By Locutus465 on 10/7/2008 3:50:23 PM , Rating: 2
yeah, I live in the USA as a matter of fact and this is nothing but postitive.... BTW no matter where you live you need to be careful, this securities bust has seaped all over the world.

By crystal clear on 10/8/2008 10:34:20 AM , Rating: 2
Tthis securities bust has seaped all over the world.

How right you are on this....

By crystal clear on 10/8/2008 5:50:30 AM , Rating: 2
Intel which licenses technologies to AMD will/may object to this agreement- there are legal issues involved in these licenses

Now read this to back up my earlier response-sorry could not give it earlier due to time constraints 7 hectic schedules/workloads.

Intel (NSDQ:INTC), too, expressed an interest in the ATIC deal as it pertains to the cross-licensing agreement to produce x86-based microprocessors that exists between Intel and AMD. That agreement is set to expire in 2010, said Chuck Mulloy, legal affairs spokesman for Intel.

"Given the agreement we have with them, we will and we are evaluating what we heard today. It does involve our intellectual property rights and we always defend our intellectual property rights," Mulloy told ChannelWeb on Tuesday.

The Intel spokesman said the confidentiality of the terms of the Intel-AMD cross-licensing agreement prevented him from saying what Intel's potential issues with the ATIC deal might be.

Mulloy said that Intel had been pushing AMD to agree to

make those terms public "for months," but claimed AMD was

not willing to do so

One knowledgeable source contacted by ChannelWeb said any possible Intel dispute over the x86 cross-licensing agreement in terms of the ATIC deal would likely have to do with the actual percentage of AMD's final ownership stake in the Foundry Co.'s manufacturing assets.

By crystal clear on 10/8/2008 8:20:21 AM , Rating: 2
AMD can expect a very hostile reaction for this in the future.

This hostile reaction will come from the shareholders who have seen a series of 7 straight quarterly losses incurred by this AMD management team.

They the shareholder saw/see a mediocore product line up that barely competes with the Intel line up, whose(AMD) profit margins are so low or barely exist.

They saw all the management blunders & failed promises & ofcourse their share prices fall to below USD 5 an all time low & continue to do so..

Now to see themselves sidelined & ignored whilst this deal or the appropriate term would be a bailout package was finalized.

Now to see themselves turned into a minority shareholders or as commonly referred as dillusion of their share holdings, by the infusion of a massive dose of cash by a foreign owned GOVT company namely the UAE, commonly referred to as sovereign funds.

This management team has brought AMD to a level that leaves the shareholders no choice but reluctantly accept this BAILOUT package or SELL OFF their shareholdings to the petro dollars rich UAE for the best possible price they can extract.

There is no guarrantee this deal will ensure AMD abilities to succesfully compete with Intel from a technology or product point of view.

Plenty of cash or funding does not automatically guarrantee sucess....

By William Gaatjes on 10/7/2008 4:58:14 PM , Rating: 2
There are many companies in the US where a lot of stock is owned by the wealthy people of the UAE. There is always an enforcement that these stock owners cannot interfere with the company but i feel that will change sooner or later.

By Rodney McNaggerton on 10/7/2008 5:27:22 PM , Rating: 3
I thought about it myself and I rationalized that the more foreign investors involved in U.S. companies, the better. This is the global economy. I thought about how we give billions of dollars to foreign nations to buy their oil, it's only fitting that the should be allowed to reinvest back into the United States. In the end everyone wins. The more money there are in countries, the more stable they'll be and that's especially important in the middle east.

By PrinceGaz on 10/7/2008 7:50:49 PM , Rating: 4

The demise of AMD would inevitably mean a slow-down in processor developent, and a steady increase in new processor prices by Intel. Some will deny it, but the truth is that Intel wants to make money, and as the sole upper-end x86 CPU manufacturer after the demise of AMD, less would be spent on R&D, and prices of new chips would rise until some non x86 chip was a real competitor (and with Apple now using x86 processors, there is no viable competitor for a long time).

Without a direct competitor, prices can rise almost without limit so long as sufficient people are willing to pay it. What is currently a quite fast £200 CPU could still cost nearly £200 next year, but the equivalent quite fast model then cost closer to £400. And a year later, that first processor may have dropped to £150, and the faster one to £350, but without competition there won't even be a faster desktop chip by then as the cost of developing it when there is no competition makes it a waste of money.

I don't care who owns the competitor to Intel so long as there is one. Rich middle-east states like Saudi Arabia and the UAE are an obvious choice, and China is another so long as they maintain excellent quality-control. The main thing is to ensure there is competition in the market, and in the current climate, it looks like competition will come not from companies in traditional capitalist economies, but from those in what are seen as more state-controlled economies.

By 1078feba on 10/7/2008 9:58:20 AM , Rating: 2
So the fabs can make $$$ on their own fabbing for other companies using excess capacity.

But what about "AMD"? Even though the situation on the financial front has changed, the elephant in the room is still hanging around: make another great chip/architecture.

I just don't want AMD to be a one-hit wonder, doesn't do anyone any good.

By Aloonatic on 10/7/2008 10:07:34 AM , Rating: 2
That's true of any company???

Perhaps a company with the erm leverage (?) and market presence such as Intel could (did) manage to get by on a poor product for a little while but not for long.

AMD have hardly are a 1 hit wonder or have failed, even with their current line of processors, they just aren't competing in some segments of the market which only a small number of the CPU buying public are interested in, although the kudos and PR benefits of having the very top performing components are very handy to have of course.

Direct from the source
By crystal clear on 10/7/2008 10:31:40 AM , Rating: 2
From the AMD press releases-

The transaction is expected to close at the beginning of 2009 following satisfaction of conditions such as approvals from regulators, transfer of previously-confirmed New York incentives to The Foundry Company, and the approval of AMD stockholders for the issuance of common stock and warrants to Mubadala. Prior to closing, AMD, ATIC and Mubadala will
<file a joint voluntary notice of the transaction for review by the Committee on Foreign Investment in the United States (CFIUS), a government inter-agency committee chaired by the Secretary of the Treasury./b>

Also this-

The Foundry Company envisions expanding its global manufacturing footprint over time,

if commercially justified, to also include new fabrication facilities in Abu Dhabi;

Introducing The Foundry Company and

The New ‘Asset Smart’ AMD

RE: Direct from the source
By crystal clear on 10/11/2008 5:32:01 AM , Rating: 2
Is there a need for a new silicon foundry company?

Is there a need for a new silicon foundry company? Quick answer: No!

Most foundries are losing money and the business is tough. It requires large sums of capital and good technology. Most of all, competition is fierce in both the trailing- and leading-edge segements.

Right now, there are too many pure-play foundries in the market. On the leading-edge, for example, Chartered, SMIC, TSMC and UMC represent the bulk of this market. IBM, Samsung and Toshiba are also involved in the leading-edge foundry segment.

But only TSMC consistently makes a profit in the arena. The rest of the pure-play vendors struggle--at least on the bottom line. When times are good, they struggle. When times are bad, they suffer.

Bottom line: Process technology is a commodity. What vendors sell is service and TSMC leads the charge.

All positives as I see it
By Beenthere on 10/7/08, Rating: 0
RE: All positives as I see it
By Oregonian2 on 10/7/2008 4:48:33 PM , Rating: 3
It'll just be funny if nVidia were to have GPU's made by Foundary Company. :-)

Good new everyone....
By Aloonatic on 10/7/2008 10:01:12 AM , Rating: 2
... we will have competition for a little while longer.

It's good to see that investment is still being made in companies and facilities, with all that is going on in the money markets at the moment.

I guess that people/groups with capitol (from mostly oil rich nations I suppose) will be able to get pretty good deals like this for a while and will hold the whip hand until credit and normal investment "vehicles" (and all that jazz) start to flow again.

Smart move by the arabs
By bigboxes on 10/7/2008 11:45:06 AM , Rating: 2
They've got more $$ than they know what to do with. The Oil Boom is not going to last forever and the smart ones are investing their $$ in the world market. Is very similar to companies like Philip Morris who divested knowing that tobacco was nearing an end-game.

By Chadder007 on 10/7/2008 12:51:48 PM , Rating: 2
And then in 10 more years they will decide to consolidate the 2 companies to stay competitive.... It seems like big business is always on this endless cycle, building up and break down.

Might not be a bad idea
By swizeus on 10/7/2008 6:12:59 PM , Rating: 2
So AMD has turn from a processor manufacturer to just a designer, eh ? Sounds interesting. It's a brilliant idea though because a designer company don't need that much capital and when the capital once again accumulated they
rejoin their forces

It is one good news for ATI too, because in past years their supply always lack because of the manufacturing

Albany plant
By rudolphna on 10/8/2008 6:20:37 PM , Rating: 2
Well its good news the Albany plant is still on. I Live in saratoga area and was looking forward to the AMD plant to help boost the local economy. Lots of kids at my sons school are hoping to get jobs there, in one fashion or another. Whether they would or not is another story but...l Its kind of good news, that AMD is hopefully going to get turned around.

Don't blame AMD...
By mac2j on 10/9/2008 12:25:53 AM , Rating: 2
Don't blame AMD for going to the Arabs for money...

From what I heard this was their last option to salvage themselves as a viable competitor ... they have good designs but they just don't have the capacity to get them to market competitively nor the cash to expand their capacity because they're not getting things to market fast enough ... that was the paradox they were stuck in.

If you want to blame someone, blame IBM ... from everything I've heard from both sides AMD's execs literally begged IBM to acquire them even going as far to say they'd push for approval at 4$/share but IBM wants to stay out of the PC business (STUPID STUPID IMO given the patents and licenses they control).

Terrorist support
By Screwballl on 10/7/08, Rating: -1
RE: Terrorist support
By darkweasel on 10/7/2008 10:29:39 AM , Rating: 5
I don't think the UAE is supporting terrorists. Big oil isn't really "gouging" us either. We are just paying market price for oil. You like free markets yes?

And I'm sure Intel has some middle eastern investors as well, so unless you lump all people from the middle east into the "terrorist" camp, then you really can't buy either.

In fact, after China I believe the rich middle eastern oil countries are our nation's biggest creditors.

RE: Terrorist support
By Master Kenobi on 10/7/2008 10:35:36 AM , Rating: 3
Japan is our largest creditor for the record.

RE: Terrorist support
By Clauzii on 10/7/2008 11:37:39 AM , Rating: 3
"Japan ($583 billion) and China ($503 billion, less the debt to Hong Kong and Macao) are the key creditors for the United States, accounting for over 40 percent of the state debt on aggregate. What’s more, the debt to China goes up by 25 percent a year.

Other major creditors of the United States are Britain, Luxembourg, Hong Kong, Switzerland, states of Caribbean offshore zone and the oil-exporting states, including Venezuela, the United Arab Emirates, Ecuador, Iran, Iraq, Kuwait, Oman and others.

With the private sector taken into account, the U.S. foreign debt totaled $13.77 trillion as of early April, while the country’s GDP is projected to equal $14.4 trillion this year. The U.S. foreign debt didn’t exceed $6.95 trillion in 2003.

The share of foreign governments in the U.S. state debt widened from 52.6 percent in 2003 to 73.9 percent in 2007."


Now, if they could just find those $2.3 Trillion...

RE: Terrorist support
By on 10/7/2008 11:49:01 AM , Rating: 2
What 2.3 trillion. Thanks for sharing the source.

RE: Terrorist support
By Fronzbot on 10/7/2008 12:35:13 PM , Rating: 2
It's another FITCamaro attempted impersonator!

And the roughly $2.3 trillion we spend every year- don't really need a source on that one as most intelligent people know what you're talking about. . .

RE: Terrorist support
By Clauzii on 10/7/2008 6:57:45 PM , Rating: 2
Rumsfeld @ Pentagon, Sept. 10th, 2001...

RE: Terrorist support
By FITCamaro on 10/7/2008 10:56:10 AM , Rating: 1
Exactly. Gas prices have been going down as oil has been dropping. I've heard in Oklahoma it's like $2.70 a gallon. Now I do agree that right in certain areas (my own included), we are possibly being gouged. I'm paying $3.57 for regular when in New York its $3.49 and they have higher state taxes. I want to know why such huge price disparities exist right now. Yes I know Ike messed up production in Texas but cmon. It's been a few weeks. When Katrina hit, prices were back down in a week.

RE: Terrorist support
By Master Kenobi on 10/7/2008 11:00:08 AM , Rating: 2
FIT it's about the same down here in the Washintgon DC area, its about 3.54 regular.

RE: Terrorist support
By voodooboy on 10/7/2008 11:28:38 AM , Rating: 2
I've always felt that D.C's been a rip-off. Especially as a student, the difference between NoVA and DC is pretty glaring (and it's not like NoVA is cheap or soemthing...)even though they're right next to each other.

RE: Terrorist support
By Aloonatic on 10/7/2008 11:22:25 AM , Rating: 2
In the UK prices rarely fall (if ever) as quickly as they rise.

It's good to see that you guys are (on the whole) being treated fairly at least.

Most of the problems we have with gas prices here are muddied by the high amounts of tax we pay and so both the oil companies and government can point their fingers at each other and say that it's the others fault.

BTW, A friend of mine lives in Atlanta and he was saying that there was some kind of supply problem which has lead to half the gas stations around his way being closed?

That was about a week ago I suppose? What's going on?

Oh and I'm paying £1.10 a litre for regular petrol here :)

RE: Terrorist support
By Reclaimer77 on 10/7/2008 11:46:28 AM , Rating: 2
Crude oil prices have gone down 40%, but we have NOT seen a 40% price drop at the pumps.

I don't really know what that means really.. just a random fact.

Yes I know Ike messed up production in Texas but cmon. It's been a few weeks. When Katrina hit, prices were back down in a week.

Katrina only took out refineries in L.A. Ike took out refineries in Texas AND Louisiana. Where I live in lower North Carolina there are STILL many stations without gas here and in upstate South Carolina.

RE: Terrorist support
By Jedi2155 on 10/7/2008 3:53:05 PM , Rating: 2
Its suppose to take a few weeks (3-5) after the prices on the oil market to reach the I expect lower prices by the end of October...but probably not less than $3 in California.

RE: Terrorist support
By on 10/7/2008 11:47:26 AM , Rating: 2
Its the free market stupid. This is a good way to improve profits since you lower prices at a slower curve than your costs. Wouldn't you do the same? That may be one reason but another more important reason probably is that gasoline buying is done in contracts (like RAM?) so the prices is fixed from the supplier for a certain duration. Also, as you allude to, NY has higher state taxes on gas, higher than here in MA even.

RE: Terrorist support
By dreddly on 10/7/2008 11:01:53 AM , Rating: 4
While the terrorist comment is stupid, the market alone has little to do with the price of oil. Speculation, swaps, futures and perception have dramatically complicated anything resembling supply and demand.

I think there is a point to be made about the transfer of wealth through market-based support for the OPEC system and the oligopolistic control of oil through companies with record-breaking profits.

This transfer of wealth has benefited these investors, and we should be able to recognize that this money has been extracted from our collective pockets and placed into the hands of a very small few in a Autocratic region of the world.

This investment in AMD should be recognized as a consequence of this, and how these market-based solutions are directly allowing foreign control of advanced technology and its development.

RE: Terrorist support
By sweetsauce on 10/7/2008 11:22:47 AM , Rating: 2
I'm pretty sure oil companies having record profits while claiming they are paying more for oil kind of makes your whole "free market" argument pointless. If anything the profits should've remained the same while prices get higher no? I'm probably using common sense, sorry if that disturbs you. Besides, for a necessary thing like gasoline, there is no free market. We require gasoline, its not a luxury, and a few companies can charge whatever they want because we have no choice but to buy it.

RE: Terrorist support
By BansheeX on 10/7/2008 11:45:12 AM , Rating: 4
Depends on how you're measuring. If you're measuring in dollars, inflation will send nominal profits upwards so that practically every year you're breaking nominal records. Measuring in terms of real purchasing power, though, the profits may not be that impressive. You could be posting record profits year over year the same way a loaf of bread went from 10 cents to $3 the past 70 years. Nominal records mean nothing, relative value means everything.

One thing is for certain, the U.S. government revenue from taxing gas and oil companies eclipses the profits of the oil companies themselves, and they're not the ones out surveying and drilling and reinvesting. They'll blow it on a failed bank, a useless war, a bridge in the middle of nowhere, overpaid contractors, a study on grizzly bear populations, you name it. You have no idea how much crazy, collusive pork is out there. They're also the ones causing the dollar debasement which is driving up foreign demand. Oil price doesn't increase long-term by companies to ream consumers, or there never would have been all those years of cheap oil to begin with. And they don't increase from speculators, short term trading causes volatility, but at the end of the day the long-term trends are driven by supply and demand. That's why oil dropped $60, but we're still higher than we were two years ago. It's called a bull market.

RE: Terrorist support
By majorpain on 10/7/2008 10:55:03 AM , Rating: 2
You buy Intel because you're a retard...
Stupidest comment i ever seen in DT...
You should stop buying gas too, cause most of it comes from middle east countries...
Someone should ban this retard from posting again in DT.

RE: Terrorist support
By sweetsauce on 10/7/2008 11:18:25 AM , Rating: 1
That thorn in your eye is sticking out pretty far.

RE: Terrorist support
By spread on 10/7/2008 11:02:51 AM , Rating: 3
stop yer buying gas den. der money go to der Middle East, to Obama Bin Laden.

dey took eeer oil jerbs!

RE: Terrorist support
By JasonMick on 10/7/08, Rating: -1
RE: Terrorist support
By Performance Fanboi on 10/7/2008 12:03:18 PM , Rating: 2
I think you missed the Southpark reference there.

RE: Terrorist support
By spread on 10/7/2008 4:25:57 PM , Rating: 2
Reference from South Park. Season 8. Goobaks.

Its an excellent episode about immigrants from the future taking jobs in the present. Its a parallel about the current illegal immigrant situation in the US.

South Park is great. You're missing out.

RE: Terrorist support
By eyebeeemmpawn on 10/7/08, Rating: -1
RE: Terrorist support
By eyebeeemmpawn on 10/7/2008 11:53:46 AM , Rating: 1
too funny, buying AMD is supporting terrorists, but you then go on to bitch about the price of gas. Your logic astounds me.

Goodbye, AMD
By Ordr on 10/7/08, Rating: -1
RE: Goodbye, AMD
By omnicronx on 10/7/2008 10:06:24 AM , Rating: 2
This is a good thing.. it allows AMD to focus on designing chips, and not having to worry about making them. The chip company can also expand its market where AMD could not by itself. This is very similar Intel TSMC alliance, although Intel still makes chips,I am guessing AMD hopes to achieve something similar.

RE: Goodbye, AMD
By Aloonatic on 10/7/2008 10:09:19 AM , Rating: 3
Why is it that people are so quick to write companies off?

It wasn't so long that people were saying bye bye to ATI and that they would never be able to compete again, Nvidia had won and were dancing on their grave etc etc etc and look where they are now?

It seems that splitting the company into different segments just makes sense, especially now, if it is what it takes to get investment in which they clearly need.

RE: Goodbye, AMD
By SunAngel on 10/7/2008 10:12:56 AM , Rating: 2
not necessarily. it sounds to me that some new players are going to enter the industry. amd sees this as a synergistic move. the foundry will handle manufacturing for any company that wants to manufacture processors, while amd will focus on design. the ganging up on intel is about to begin. when i was a teen i remember getting into a brawl where i got jumped by two people. i remember a saying my father told me...if you get jumped by two people, take the beating but remember who they were, what comes around go around.

RE: Goodbye, AMD
By spread on 10/7/2008 11:06:40 AM , Rating: 1
AMD is undergoing changes in order to be able to compete.

A death throw would be to continue the same bad decisions that lead them up to this point.

They are doing the opposite.

I hope this reorganization is successful. I hate seeing monopolies in any market.

"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan

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