AMD Sets Target Date for New Fab Construction.

[SunnyD]

Text

Advanced Micro Devices Inc. wants to start pouring concrete on its $4.6 billion computer chip factory here by June 16.

That's according to site plans submitted Monday to the town of Malta, where most of the facility will be located.

AMD needs town Planning Board approval before it obtains ground-clearing and building permits to construct the facility at the Luther Forest Technology Campus, which straddles Malta and the town of Stillwater.

The Malta Planning Board will start its review a week from today.

AMD, which is spinning off its manufacturing into a joint venture with the Emirate of Abu Dhabi, plans to start clearing trees and grading the soil at Luther Forest by March 17, according to the site plans, a collection of detailed maps and reports that measures about seven inches thick.

...

See, this totally confuses me. AMD is selling off their fabs (joint venture okay sure). They are trimming assets left and right to stem the bleeding. But they're going ahead with plans for a nearly 5 billion dollar fab?

 

[LOUISSSSS]

See, this totally confuses me. AMD is selling off their fabs (joint venture okay sure). They are trimming assets left and right to stem the bleeding. But they're going ahead with plans for a nearly 5 billion dollar fab?

maybe they were just f'in with ya!!!

 

[Idontcare]

Originally posted by: SunnyD
But they're going ahead with plans for a nearly 5 billion dollar fab?

You have to take into context when (timeline) and how that fab becomes a $5B fab.

Building the fab, as in the building structure which contains the fab (aka the fab shell in industry speak), is a rather minimal portion of the total fab build-out cost.

By minimal I mean it will be on the order of $150M-$200M and can take as little as 9 months to complete or be dragged out for as long as 2 yrs if they wanted.

Once the shell is complete the building structure itself requires very minimal annual costs to maintain in mothball status. (around $20M per year or less)

I speak from experience. At Texas Instruments we broke ground on our first 300mm fab in 1996, completed the shell in a year but mothballed the fab until late-2000 before we started moving tools in, production didn't happen until 2002. Likewise the Richardson fab, TI's second 300mm fab, broke ground in 2005, fab was built by end of 2006 and hasn't had a tool moved into it yet.

So when does building a new fab begin to cost the real money? When you move the tools in and staff it up. That $5B projected fab cost includes adding staff to the payroll. Toolsets will cost around $2B.

If that fab ever finally gets to the point of costing $5B it won't be before end of 2010 to early 2011 at the absolute earliest, and more likely if the accounting that went into the numbers is ever made public we'd find out the $5B number is some "lifetime expected financial outlays" over say 5-10 yrs of continual low-level re-tooling and infrastructure investments.

The numbers are big for headline grabbing and politicking. Governor's don't hand out $2B tax subsidies for $250M buildings, you need the numbers to work out so the politicians don't look like total asshats giving away taxpayer subsidies. (TI's RFAB garnered something around $250M in Texas state subsidies...not a single full-time engineering job created from any of it)

 

[BTRY B 529th FA BN]

With the economy down, its a great time to buy. Maybe a smart move for AMD and maybe not.

 

[Idontcare]

Originally posted by: BTRY B 529th FA BN
With the economy down, its a great time to buy. Maybe a smart move for AMD and maybe not.

If you make something in your fabs that sells in this economy then it definitely the time to be buying tools for fabs in the US as our dollar has gotten markedly stronger in the past 6 months (except against the yen).

Problem is most fab owners are seeing fab utilization below 50% at this time. That means they aren't even using the equipment they already own, let alone have a reason to go on a spending spree.

Japan's top seven semico companies just lost $22B in the past 90 days, the foundries (TSMC, UMC) are reporting sub-40% fab utilization, TI reported 33% fab utilization (all-time low) and is shutting down all fabs for the month of March.

The only companies who have it worse than the IDM's at this time are the tool makers (AMAT, ASML, LAM, etc). Its an absolute career wasteland out there.

At any rate I have no doubt the timetable for the NY fab was a negotiated part of the TFC spin-off deal. Get the ball rolling under an american company before transferring to a mid-east company that will no-doubt needlessly get a few NY voters riled up about using tax dollars to subsidize mid-eastern business.

 

[BTRY B 529th FA BN]

I meant by buying the real estate. And buckle your seat belts boys and girls cause the ride is going to bet bumpy - I mean that literally for OH The 1986 Seat belt law will be pushed, I think to a primary offense, by Ted Stricklands 60B$ balancing plan.

 

[imported_seferio]

With AMD's spinoff of their fabs, they probably won't be footing the bill for most of the costs. If I recall too, if they don't build soon they will lose out on the subsidies.

 

[Zap]

Originally posted by: BTRY B 529th FA BN
With the economy down, its a great time to buy. Maybe a smart move for AMD and maybe not.

Well, considering what Idontcare said about the timelines involved, perhaps AMD is peering into the crystal ball for five years from now? Who can say? Maybe everything's recovered by then? Stranger things have happened.

 

[PCTC2]

Originally posted by: Idontcare


The only companies who have it worse than the IDM's at this time are the tool makers (AMAT, ASML, LAM, etc). Its an absolute career wasteland out there.

I'm guessing Cymer Corporation is included in this, eh?

 

[Phynaz]

This isn't AMD building this.

The agreement with WCH and ATIC says AMD can't own a fab for the next 15 years.

You can read it here.

 

[Indyboy2]

according to all the local papers its a amd plant

 

[Idontcare]

Originally posted by: Phynaz
This isn't AMD building this.

The agreement with WCH and ATIC says AMD can't own a fab for the next 15 years.

You can read it here.

Won't it be AMD until the foundry company is officially/formally formed? All that has been done so far is announcements of intent and documents showing proposed structure and business arrangements, nothing has been approved by shareholders or government yet IIRC.

 

[hooflung]

Feb 10th is the day we see AMD's foundry spinoff happen or not.

 

[Phynaz]

Originally posted by: Idontcare

Originally posted by: Phynaz
This isn't AMD building this.

The agreement with WCH and ATIC says AMD can't own a fab for the next 15 years.

You can read it here.

Won't it be AMD until the foundry company is officially/formally formed? All that has been done so far is announcements of intent and documents showing proposed structure and business arrangements, nothing has been approved by shareholders or government yet IIRC.

True, but let's face it, if this isn't approved AMD will cease to exist, so we may as well call it a done deal.

All government approvals are complete as far as I'm aware, shareholder vote is in a week.

Also the $2B in incentives has already been transfered from AMD to TFC, so again, AMD would not be building this fab. Maybe a backhoe is digging some holes in the name of AMD, but this is a TFC fab.

 

[Idontcare]

Originally posted by: Phynaz

Originally posted by: Idontcare

Originally posted by: Phynaz
This isn't AMD building this.

The agreement with WCH and ATIC says AMD can't own a fab for the next 15 years.

You can read it here.

Won't it be AMD until the foundry company is officially/formally formed? All that has been done so far is announcements of intent and documents showing proposed structure and business arrangements, nothing has been approved by shareholders or government yet IIRC.

True, but let's face it, if this isn't approved AMD will cease to exist, so we may as well call it a done deal.

All government approvals are complete as far as I'm aware, shareholder vote is in a week.

Also the $2B in incentives has already been transfered from AMD to TFC, so again, AMD would not be building this fab. Maybe a backhoe is digging some holes in the name of AMD, but this is a TFC fab.

Ah, I see where you were coming from in your post now.

The way it reads, your post sounded like you were stating for fact that the business entity writing the checks to pay contractors for breaking ground on the NY fab was NOT AMD but rather was the foundry company or the ATIC.

I think we all agree with you that while AMD may in principle be writing the checks today, the spirit of the transactions is that they are eventually coming out of ATIC/TFC's checking accounts as it will all be transferred when the deal is finalized.

 

[heyheybooboo]

It's a great time to build if they (whoever 'they' is) can afford it.

Material and labor costs are way down. The big firms need work. Construction financing might be a problem for anyone except Abu Dhabi. If the richest folks in the world can't arrange construction financing then we are all screwed in the big scheme of thangs ...

 

[Idontcare]

Originally posted by: heyheybooboo
It's a great time to build if they (whoever 'they' is) can afford it.

Material and labor costs are way down. The big firms need work. Construction financing might be a problem for anyone except Abu Dhabi. If the richest folks in the world can't arrange construction financing then we are all screwed in the big scheme of thangs ...

Actually if you look at the break-out of GDP into the varying contributing sectors you can see this is exactly what has been happening...just not in the semiconductor industry.

For 2008 Commercial construction has held steady, residential is what fell off a cliff.

http://www.bea.gov/newsrelease...p/2009/pdf/gdp408a.pdf

(checkout table 7, page 11, in this BEA report on GDP, not the delta in Nonresidential vs. Residential as well as the delta between Durable goods versus Nondurable goods)

 

[Idontcare]

Wanted to inject this thread with AMD's official timeline regarding the Malta fab:

Key dates established by AMD for the construction of its $4.6 billion chip fab in Malta.

Feb. 10: Shareholder vote on joint venture with Abu Dhabi

March 17: Site clearing and grading begins

June 16: First concrete poured

July 17: First steel erected

July 2010: Building shell completed

July 2011: Fab completed

2012: Full-scale chip manufacturing begins

SOURCE: AMD

http://www.semiconductor.net/a...lexml/ln921249794.html

So we are talking about a solid year just to build the shell, another solid year before tools move in, and another year even still before the fab quals and move to production.

Not that they (the foundry company, not they as in AMD) need the capacity anytime soon with half of the Dresden fabs sitting unused.

With any luck though they might have 32nm qual'ed by then too

 

[heyheybooboo]

Originally posted by: Idontcare

Originally posted by: heyheybooboo
It's a great time to build if they (whoever 'they' is) can afford it.

Material and labor costs are way down. The big firms need work. Construction financing might be a problem for anyone except Abu Dhabi. If the richest folks in the world can't arrange construction financing then we are all screwed in the big scheme of thangs ...

Actually if you look at the break-out of GDP into the varying contributing sectors you can see this is exactly what has been happening...just not in the semiconductor industry.

For 2008 Commercial construction has held steady, residential is what fell off a cliff.

http://www.bea.gov/newsrelease...p/2009/pdf/gdp408a.pdf

(checkout table 7, page 11, in this BEA report on GDP, not the delta in Nonresidential vs. Residential as well as the delta between Durable goods versus Nondurable goods)

I love that BEA stuff - I soak it up like a sponge

No doubt residential has tanked - and commercial held up reasonably well until Q408. Ease on down to Table 8 and follow 2H07 to Q408.

What really jumps out at me is tracking Federal gov't contribution over the same period (and the decline in State and Local ... )

 

[Idontcare]

Originally posted by: heyheybooboo
What really jumps out at me is tracking Federal gov't contribution over the same period (and the decline in State and Local ... )

State and local still increased, that table is % change by quarter. The rate of change has decreased, but state and local spending is still increasing. Nothing beats the federal spending though. They are the new consumer in town.

 

[JeffreyLebowski]

Originally posted by: Idontcare

Originally posted by: SunnyD
But they're going ahead with plans for a nearly 5 billion dollar fab?

You have to take into context when (timeline) and how that fab becomes a $5B fab.

Building the fab, as in the building structure which contains the fab (aka the fab shell in industry speak), is a rather minimal portion of the total fab build-out cost.

By minimal I mean it will be on the order of $150M-$200M and can take as little as 9 months to complete or be dragged out for as long as 2 yrs if they wanted.

Once the shell is complete the building structure itself requires very minimal annual costs to maintain in mothball status. (around $20M per year or less)

I speak from experience. At Texas Instruments we broke ground on our first 300mm fab in 1996, completed the shell in a year but mothballed the fab until late-2000 before we started moving tools in, production didn't happen until 2002. Likewise the Richardson fab, TI's second 300mm fab, broke ground in 2005, fab was built by end of 2006 and hasn't had a tool moved into it yet.

So when does building a new fab begin to cost the real money? When you move the tools in and staff it up. That $5B projected fab cost includes adding staff to the payroll. Toolsets will cost around $2B.

If that fab ever finally gets to the point of costing $5B it won't be before end of 2010 to early 2011 at the absolute earliest, and more likely if the accounting that went into the numbers is ever made public we'd find out the $5B number is some "lifetime expected financial outlays" over say 5-10 yrs of continual low-level re-tooling and infrastructure investments.

The numbers are big for headline grabbing and politicking. Governor's don't hand out $2B tax subsidies for $250M buildings, you need the numbers to work out so the politicians don't look like total asshats giving away taxpayer subsidies. (TI's RFAB garnered something around $250M in Texas state subsidies...not a single full-time engineering job created from any of it)

Is TI's snd fab the one on Forrest Lane?
I thought they were working full time at that one.