AMD going fab-less?

[Idontcare]

http://www.infoworld.com/artic...AMD-outsourcing_1.html

Goldman Sachs seems to think AMD is likely to outsource production (as in fullt-time, not part-time like they do now) and AMD won't deny it.

Does it matter even if it is true, or could this be good news for the long-term if it leads to a more financially sound and longer lived AMD down the road?

 

[AmberClad]

If it means increased manufacturing capacity, possibly.

Right now, I think what I've been hearing is that the current drawn out price war with Intel is hitting AMD harder (higher per unit cost to manufacturer?). Also, one of the reasons the MacIntel partnership came about during the switch from PowerPC was that Apple wasn't confident in AMD's ability to deliver the required volume of CPUs.

In any case, going fabless has worked out very well for nVidia. Maybe it lets them focus on R&D, leaving production logistics to Foxconn and the other companies that actually manufacture the cards.

 

[Keysplayr]

They lost a further 572 million in Q2. They may have to dump their fabs if they want to survive. Sell them off. They might be better off doing this. I'm sure Chartered and TSMC are already scheduling their corresponding champange and caviar parties as we speak, if this has any truth to it.

 

[sandorski]

Fabs are so bloody expensive and need replaced so often too. Kinda puts them at the mercy of others though. Tough call.

 

[VirtualLarry]

It would probably mean that AMD would stay a niche technology company, and not become a mainstream juggernaut like Intel is. Intel's strength is mfg, if AMD cannot compete with Intel there, then AMD will never become mainstream like Intel.

 

[GFORCE100]

Originally posted by: Idontcare
http://www.infoworld.com/artic...AMD-outsourcing_1.html

Goldman Sachs seems to think AMD is likely to outsource production (as in fullt-time, not part-time like they do now) and AMD won't deny it.

Does it matter even if it is true, or could this be good news for the long-term if it leads to a more financially sound and longer lived AMD down the road?

If AMD does do such a thing, it will mean they are in deep financial trouble period. A company will not take drastic measures unless its situation calls for it. The stock exchange would most probably not take such news well as a fabless AMD is in essence a smaller less powerful AMD will less potential and flexibility to bring in the $$$ hence earnings per share.

AMD has been expanding its fab prowess over recent years so the emphasis was and still is I'm sure to build a stronger and stronger manufacturing base at home (internally). AMD doing a 180 degree turn now is like scraping all this idea and changing route. If a chip company wants to be powerful then they must do as much as possible internally because R&D works better this way and it's cheaper in the long run. You also have better control over how soon or how well you can deliver your silicon on shelves.

In my opinion AMD has just been spending more than it can or should to stay competitive. ATI is not exactly a fine tuned powerhouse that can teach AMD a thing or two, they need to be pampered and now their problems will eat into AMD's pockets. This is what happens when you get an enthusiastic CEO who hasn't really thought about plan B if things go wrong after all this spending. Being fabless can only make AMD less competitive in the long run.

 

[MarcVenice]

AMD can't go fabless, it's inpossible because of the patent agreement they have with intel that sais they can't outsource more then a certain percentage of the x86 processors to others. They can however outsource more then they do now. But, they are still tinkering with an idea of building a new fab in New York. Who knows what's gonna happen

 

[coolpurplefan]

?Huh?

I thought they had an agreement with Intel where they could not outsource everything.

 

[Nyati13]

Already completely dubunked, and AMD has already denied it.


Wallstreet 'anal'ysts are some of the most ignorent dumbasses on the planet. Whoever the oxygen theif is that wrote the original rumour had probably noticed that AMD was intending to produce all of it's GPU's in outsourced foundries, (Duh, those are all ATI chips, and ATI was always fabless)

IE, AMD has changed nothing, and a worthless bag of skin thinks he got a massive "news" scoop.

 

[tdawg]

Originally posted by: Nyati13
Already completely dubunked, and AMD has already denied it.


Wallstreet 'anal'ysts are some of the most ignorent dumbasses on the planet. Whoever the oxygen theif is that wrote the original rumour had probably noticed that AMD was intending to produce all of it's GPU's in outsourced foundries, (Duh, those are all ATI chips, and ATI was always fabless)

IE, AMD has changed nothing, and a worthless bag of skin thinks he got a massive "news" scoop.

He probably just did that to drive the stock price in some way in the hopes of making some money.

On the topic of analysts, can anybody tell me why they keep predicting and pricing into the market that the Fed will reduce interest rates, and then when they come out and say that interest rates will hold steady, the market goes crazy and all the sellers come out. This has been occuring since I started watching the market last summer and it drives me crazy! Just stop predicting it and let it be a surprise if it ever does actually materialize. </rant>

 

[Idontcare]

Originally posted by: tdawg

Originally posted by: Nyati13
Already completely dubunked, and AMD has already denied it.


Wallstreet 'anal'ysts are some of the most ignorent dumbasses on the planet. Whoever the oxygen theif is that wrote the original rumour had probably noticed that AMD was intending to produce all of it's GPU's in outsourced foundries, (Duh, those are all ATI chips, and ATI was always fabless)

IE, AMD has changed nothing, and a worthless bag of skin thinks he got a massive "news" scoop.

He probably just did that to drive the stock price in some way in the hopes of making some money.

On the topic of analysts, can anybody tell me why they keep predicting and pricing into the market that the Fed will reduce interest rates, and then when they come out and say that interest rates will hold steady, the market goes crazy and all the sellers come out. This has been occuring since I started watching the market last summer and it drives me crazy! Just stop predicting it and let it be a surprise if it ever does actually materialize. </rant>

Market manipulation is only illegal if the specific ways in which you go about doing it are documented as being illegal.

 

[Aluvus]

Originally posted by: AmberClad
In any case, going fabless has worked out very well for nVidia. Maybe it lets them focus on R&D, leaving production logistics to Foxconn and the other companies that actually manufacture the cards.

Foxconn makes video cards, but not GPUs. Their relationship is more analogous to a motherboard maker (which, conveniently, they are also involved in).

But NVIDIA does indeed outsource GPU fabrication. AFAIK they are mainly reliant on TSMC, with some parts coming from Chartered. And of course they outsource the production of actual video cards using their GPUs, to Foxconn and many others.

In any case, there are real risks to being fabless. Cyrix was fabless, and reportedly did not have great relationships with some of its fab partners, which led to all sorts of problems (and ultimately, the end of Cyrix). Of course, one could equally point to 3dfx, who were doing OK until they decided they needed their own fabs.

 

[ForumMaster]

it could definitely be a good thing for AMD. as others have said, Fabs are expensive to run. AMD has always been a generation behind Intel not just because of R&D but because when they'd finally finish their 65mm fab and start producing 65mm parts, intel has been doing it for a long time and is already starting 45mm production. if this helps AMD, all the better for them.

the price war hit AMD much harder cause they had to lower prices considerably to compete with intel's superior parts.