6.21.2007

AMD Too Broke To Expand

From the TimesUnion: AMD seeks partner for Fab

"A new report by analysts at Citigroup says Advanced Micro Devices Inc. could be looking to partner with another company on its $3.2 billion computer chip factory planned for Saratoga County -- and AMD isn't ruling it out as a possibility."

What this means in other words is that AMD can't afford to build another Fab but wouldn't want the offer to go away. It is looking for a partner to cough up anywhere from 50 to 99% of the cost of the Fab. Preferably 99% since AMD doesn't even know where to get the money to continue the much needed upgrade for Fab30. Heck AMD doesn't even know where to get the money to repair the ailing tools from Fab30.

AMD is hoping the partner is unaware so it can get 100% of the grant from the state of NY. I must admit, it's a very clever scheme.

5 comments:

Randy Allen said...

AMD is finished, almost out of cash. They will be out of market share and will be BK by Q2'08.

13ringinheat said...

this is what happens when a processor company sells power point presentations instead of processors.......

Anonymous said...

The real question should be if they are splitting this out at less than 50% for themselves - at what point do they realize it is not worth the expenditure (even with the subsidy). They still need other infrastructure, added costs of having fabs at 2 different locations, additional mgmt, overhead, loss of capacity due to the sharing arrangement (or do they think they can split the fab capacity so perfectly that there are no inefficiencies introduced?)

At what point does AMD management wake up and do an ROI of building this vs additional outsourcing or doing a small annex on Dresden where all of their infrastructure and expertise ALREADY exists.

Is it really worth it to for half a fab (or potentially less) of production? Unless you are COMPLETELY sharing process technology, there would be huge inefficiencies as you would potentially have separate tooling between partners. (This is hugely inefficient for folks familiar with capacity planning as you have a lot of "0.5" tools).

Roborat, Ph. D. said...

its called "hinting". you make statements that would indirectly make the seller realize that you don't have the money to complete the transaction. you do this so it won't be difficult later on when you tell them you're backing out.

how can they be looking for a partner for a new Fab when they can't even upgrade fab30.

Ycon said...

Intel cut off AMDs legs and arms.
And since AMD does not have any brains left, theres nothing they can do anymore.

The war is over.