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Meyer says "smart men have foundries"

AMD is struggling with returning to profitability at the same time it is fighting with Intel in the X86 processor market. The struggles have led to some hard decisions at AMD that have included layoffs and pay cuts.

As AMD prepares to shed its foundry operations and spin them into a new company, AMD CEO Dirk Meyer is opening up about the changes. AMD founder Jerry Sander has a maxim he lived by when AMD first started that stated, "Real men have fabs."

Meyer suggests that while Sander's was a smart man, the market has changed significantly since AMD was founded. Meyer suggests a new maxim, "Smart men have foundries." Meyer said during an interview with eWeek, "Jerry was a real smart guy but the industry has changed a lot since that time, so I think, ‘Smart men have foundries,’ is my new quote."

Whatever Meyer's new maxim for success is, the fact remains that spinning the foundry portion of AMD off into a new company was a good way for AMD to get much needed capitol and remove debt from its books at the same time.

EWeek reports that the spin off means AMD received $800 million in capital and was able to remove $1.2 billion in debt from its books. The majority of that debt was from the purchase of ATI, which continually haunts AMD.

Meyer continued saying, "Clearly it’s going to be a culture change for the company. There are a large number of capable manufacturing technologists and manufacturing people who will no longer be part of AMD, but the good news is they get to create a new company. Some people have asked me about the risk—as to imply there are big risks—but honestly I think we are on top of what we have to do both in terms of R&D and supply chain operations."

The spinoff of the foundry portion of the company was announced in October of 2008 and was temporarily called The Foundry Company. The spin off was finally approved by AMD shareholders this month allowing the process to continue.

Former AMD CEO Hector Ruiz will head The Foundry Company and the official name of the company will be announced soon according to eWeek. The split will allow AMD to focus on the design and marketing of CPUs to better compete with Intel.

Intel has moved well ahead of AMD in many markets and AMD has work to do to regain ground it has lost. AMD has been hit with a number of significant losses over the last several years that have impaired the company. The most recent loss came in 2008 with AMD posting a loss for the year of $3 billion.

Meyer also talked a bit about Intel and its claim that license agreements in place between AMD and it would not be covered for the new company. Meyer said, "I think it’s pretty clear that they [Intel] are trying to instill fear, uncertainty, and doubt in the minds of our customers, shareholders and other stakeholders."

AMD still maintains that the licensing agreements are in effect despite the spin off.

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RE: still haunts? um, what are you smoking?
By PrinceGaz on 2/27/2009 8:29:39 PM , Rating: 3
+1. It's not who has the fastest card that matters, but who is making the most money from the cards they sell.

the poster before you said:
AMD does have better low to mid range cards 4670, 4830, 4850 but few enthusiasts use these in single card configurations

Yes, which means AMD have the right idea when it comes to graphics cards. At the end of the day, the balance-sheet is almost unaffected by the relatively few "enthusiasts" buying graphics-cards like the GTX285. AMD don't care that enthusiasts aren't buying 4670, 4830 or 4850 cards for single GPU setups, because they are making a helluva lot more money selling those more economical cards in much higher quantities to the upper-mainstream sector.

RE: still haunts? um, what are you smoking?
By bjacobson on 2/28/2009 1:00:13 AM , Rating: 2
Just for the record, subject verb agreement dictates the correct diction would be "AMD has", "Sony has", "Nintendo is"; as opposed to "AMD/Sony has" or "Nintendo are". It seems to be a popular trend to do the opposite.

RE: still haunts? um, what are you smoking?
By bjacobson on 2/28/2009 1:00:47 AM , Rating: 1
**"AMD/Sony are"

Grammar police out.

By Viditor on 3/1/2009 10:56:53 PM , Rating: 2
I'll add to it then...spell check time.

"a good way for AMD to get much needed capitol and remove debt from its books at the same time"

"Capitol" means:
A building occupied by a state legislature or,
The government building in Washington where the United States Senate and the House of Representatives meet

To be fair, you correctly used the word "capital" in the next paragraph...meaning:

"Assets available for use in the production of further assets."
"Wealth in the form of money or property owned by a person or business and human resources of economic value"

Interestingly, Capital also refers to "a seat of government", just not the building at that seat...;)
And who said pedantism wasn't fun...

"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer
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