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AMD Q4 2008 Roadmap  (Source: CHW.net)
AMD plants in Dresden, Germany at the heart of rumours

AMD isn’t in the competitive position against top rival Intel that it once enjoyed. AMD, however, hasn’t given up though and continues to battle Intel for market share. AMD is particularly strong in the server market, especially in the virtualization realm where its technology offers better performance than some of Intel's similar offerings.

Rumors have circulated for a while now that AMD is looking to spin-off some of its chip plants. CNET News reports the rumors keep coming up repeatedly due to some truth being in them. Another rumor was started about a possible spin-off recently that cited analyst John Lau with Jefferies & Co who said, "[AMD may] spin-off of its manufacturing operations within two weeks."

CNET News quotes AMD's Drew Prairie saying, "I wouldn't expect an urgent phone call from me in the next two weeks." The implication being that Lau's timing may not be accurate. The chip factories at the heart of the rumors are the pair AMD owns in Dresden, Germany.

Prairie also said, "I wouldn't take that assumption from (analysts) as definitive. There are a lot of nuances and gray areas, as to what we're going to be doing. A lot the speculation is painting things as black and white. I don't think, come announcement day, it will be that black and white."

Prairie also stated again that the chip plant in New York -- which DailyTech reported on in June 2006 -- is a critical part of AMD's manufacturing capability. Other analysts believe that AMD could receive another influx of investment cash to shore up its operations in a manner similar to the $622 million an Abu Dhabi firm paid for an 8.1% stake in AMD in November 2007.


In related news, AMD's Q4 2008 roadmap surfaced today at CHW.net. The roadmap shows new AMD processors are inbound starting on October 8. On that day, AMD will introduce an AMD Athlon X2 5050e Brisbane-based CPU running at 2.6GHz. The same day AMD shows a new Phenom X3 8850 running at 2.5GHz debuting.

In November, AMD will introduce AMD Ultra-Value Client (UVC) solutions that are direct OEM products only. In the consumer space AMD will announced a new Lima-based Athlon 2650e at 1.6GHz. A new Brisbane-based Athlon X2 3250e running 1.5GHz will also be introduced in November.

In December, AMD will unveil several new Phenom parts. One of them will be a Toliman-based Phenom X3 8850 running at 2.5GHz that will be multiplier unlocked. The roadmap also shows in December a pair of new Deneb-based Phenom quad-core parts. The CPUs will include the a Phenom X4 running at 3.0GHz, and a Phenom X4 running at 2.8GHz. Both of these processors will apparently not hit retail until early January.

DailyTech first reported on Deneb AMD parts in March of 2008.

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Selling their plants?
By Sulphademus on 9/5/2008 1:25:47 PM , Rating: 2
Spin-off usually means "selling."

Why would a company who, last I knew, was working at capacity, want to sell of their manufacturing capability and, likely, need to pay the people who just bought their former fab to make parts for them?

TSMC is making all their ATI chips. I thought maybe AMD would want more control of their products and not less?

Maybe they want to pass the buck on fab costs but they'd be paying for it anyways by contracting out the work!




RE: Selling their plants?
By KristopherKubicki (blog) on 9/5/2008 1:27:37 PM , Rating: 3
The upkeep on those fabs is incredibly expensive.


RE: Selling their plants?
By DASQ on 9/5/2008 5:50:45 PM , Rating: 2
Yes indeed.

Instead of upgrading fabs, Intel almost always just makes a new fab at the 'new' process, once that process is superseded, it gets turned into a chipset fab. After that, they just sell the entire fab off.

An Intel engineer offered me a deal on a 90nm/300mm fab a couple months back... Unfortunately, I was short about ~$9.99999 billion :(


RE: Selling their plants?
By Penti on 9/6/2008 9:49:16 PM , Rating: 1
They have sold of a lot of old lines and tools. But who would want to run AMDs fabs for them. Nobody I guess?


RE: Selling their plants?
By amdwilliam1985 on 9/5/2008 1:36:35 PM , Rating: 3
Nvidia and the former Ati was doing fun having TSMC manufacturing their chips. They just have to come up with the chip design. Maybe AMD can also benefit from it?


RE: Selling their plants?
By amanojaku on 9/5/2008 4:13:07 PM , Rating: 5
quote:
Nvidia and the former Ati was doing fun

I did fun last night. Fun was good. I can't wait to do fun again. ;-)


RE: Selling their plants?
By ZimZum on 9/5/2008 5:08:48 PM , Rating: 5
You keep doing fun like that and you'll go blind and your palms will get hairy.


RE: Selling their plants?
By Samus on 9/6/2008 3:27:54 PM , Rating: 2
Everytime I do fun, God kills a kitten. I hate cats.


RE: Selling their plants?
By ajfink on 9/5/2008 1:45:07 PM , Rating: 3
As I understand it in this context, it would be a separate AMD entity that could potentially become quite like TSMC. It would isolate the manufacturing portion of the company from any downswings in AMD's product competitiveness, which would certainly be a good thing. Its first and primary goal, though, would still be to fab AMD processors.


RE: Selling their plants?
By spluurfg on 9/5/2008 4:19:47 PM , Rating: 2
quote:
As I understand it in this context, it would be a separate AMD entity that could potentially become quite like TSMC. It would isolate the manufacturing portion of the company from any downswings in AMD's product competitiveness, which would certainly be a good thing. Its first and primary goal, though, would still be to fab AMD processors.


Indeedy. Spin-offs can have a uniquely motivating effect in that they usually produce an entity with one or very few operations. Thus they know that their bread is buttered with their operations and there will be no parent corporation to shore up their P/L with their other divisions.


RE: Selling their plants?
By croc on 9/5/2008 9:14:27 PM , Rating: 1
And AMD still has Hector sitting around, twiddling his thumbs... Spin off a few fabs, give them to Hector and let him start earning his keep. Could be sink or swim time, Hector!


RE: Selling their plants?
By dagamer34 on 9/7/2008 12:24:48 PM , Rating: 2
Hector Ruiz resigned July 18, 2008. You're a bit behind the times, man.

http://www.dailytech.com/AMDs+CEO+Steps+Down/artic...


RE: Selling their plants?
By Natfly on 9/5/2008 1:45:51 PM , Rating: 2
In the long run its probably cheaper to make your own chips, but AMD needs to actually make that far. They are in a few billion in debt and need to pay it off so they can become profitable again.


RE: Selling their plants?
By Flunk on 9/5/2008 1:58:21 PM , Rating: 2
There is no mention of selling the spun-off companies. It's possible that they want to do this for taxation purposes or so that the manufacturing company can take contract jobs from other chip designers. We just don't have the information yet.


RE: Selling their plants?
By Kougar on 9/5/2008 2:02:44 PM , Rating: 3
"Spinning off" more often applies to the parent company spinning off a portion of itself into a subsidiary, or a separate company they own a controlling stake in. Not selling it outright to an outside source.

However this was going to work, if it is arranged so there was AMD + this new Fabbing company, this fabbing company could contract out to build various chips for other businesses using these plants. In the very least it would allow AMD to focus on design, while the new company can focus on alternative means to keep the fabs profitable while also financing necessary upgrades in FAB technology. Such as Intel and TSMC are already prepping for 450mm wafers, and anyone that knows AMD's history knows how big an issue the 200mm vs 300mm wafer conversion was for them to sort out, despite having the better product at the time.

If one thing is for sure, AMD's New York fab is extremely important. This fab is slated to open in 2010 building 45nm chips from 300mm wafers. Considering how problematic AMD's past die shrinks have been, they are probably heavily counting on this one plant to be up and running by 2011 to supply the majority of their 45nm CPU capacity. Then again, they haven't even begun physical construction yet far as I can tell...


By Master Kenobi (blog) on 9/5/2008 2:26:56 PM , Rating: 2
Yea, the New York site has not started construction yet, I believe there are still agreements to be settled with the state before it can begin.


RE: Selling their plants?
By Oregonian2 on 9/5/2008 2:59:42 PM , Rating: 2
quote:
"Spinning off" more often applies to the parent company spinning off a portion of itself into a subsidiary, or a separate company they own a controlling stake in. Not selling it outright to an outside source.


This is true, but it's my observation that it's often if not almost always done as a precursor to either selling it or a portion of it (like when stock is issued/sold to the public for the separate entity) or is separated completely by issuing stock to the new entity and giving it to the current stockholders (sort-of like selling it all to the existing stockholders with the price being a portion of the equity they own in the "main" company's stock).


RE: Selling their plants?
By Kougar on 9/5/2008 8:20:53 PM , Rating: 2
That is true, but that is what happens when a sepearate company is formed. The new company sells off stock, however the founding company often retains a controlling interest, ie 51% of the total shares, or the largest majority. I've seen some "spin-offs" end up with one company owning 51% of the shares and the other owning 49%, just to give an example.

Either way usually the originating company owns an interest in, and the split off comapny receives a huge influx of cash. Which is something AMD or a would-be spun off fabbing portion could very much use.


RE: Selling their plants?
By Oregonian2 on 9/8/2008 1:29:07 PM , Rating: 2
That's true a lot of the time, particularly in the short to medium term. Exception is the case when the new company's stock is distributed to stockholders in which case the company itself will own nothing of the spinout (albeit have common owners).


RE: Selling their plants?
By dnd728 on 9/6/2008 4:20:19 PM , Rating: 2
It makes the most sense to me if they spin off their fabs to the IBM alliance, retaining partial ownership in the new company. AMD can't keep up with Intel on their own, but together they'll be more then capable.