AMD To sell Fab 38 to TSMC?

[Phynaz]

Barrons

 

[myocardia]

I'm assuming that's the kind of thing you have to do, when you take out a 5 billion $ loan, then are having problems making the payments?

 

[ViRGE]

I really hope this doesn't come to pass. The day AMD gets out of the fab business is the day they'll be forever behind Intel (and realistically, there's a good chance this would kill them)

 

[myocardia]

Well, they would definitely have to stop selling CPU's, since they can only outsource a maximum of 15 or 20%, and still keep their x86 license.

 

[Sylvanas]

TSMC must be doing quite well at the moment, making NV+AMD's GPU's and now having the $$ to buy one of AMD's fabs, on the other hand bad news for AMD....hope they know what they're doing.

 

[21stHermit]

Originally posted by: myocardia
Well, they would definitely have to stop selling CPU's, since they can only outsource a maximum of 15 or 20%, and still keep their x86 license.

License? To who? Intel? 20% why?

 

[wwswimming]

have any of you ever worked at a chip company ? i'm wondering
how much of an asset vertical integration is. things as simple as
the conversations in the lunch-room, when the gym rats come
for food at 1 PM, and the systems guys and the mechanical
guys and the power supply peoples all talk shop.

i have worked at companies that had thin film to system level
manufacturing, but never at a chip company.

the 2 or 3 vertically integrated companies i worked at, the
engineers ran rings around the companies that did out-sourcing.
the "out-sourcers", the engineers all became paper movers and
became confounded by something as minor as drilling a dozen
quarter inch holes in a piece of aluminum.

but, i know a lot of chip companies DO out-source, and do
great jobs. like someone said, nVidia.

just curious what it's like being on the inside of a chip
company. got to think there's some benefit from the
design people having lunch with the fab people, talking
about things like, "how can we make our boards more
OC-able ?" if you have a materials person present
who talks dielectric constants, a microwave circuits/
physicist person who knows transmission lines ... that
works better than having them separated by the
"supply chain" people.

 

[MetaDFF]

Originally posted by: 21stHermit

Originally posted by: myocardia
Well, they would definitely have to stop selling CPU's, since they can only outsource a maximum of 15 or 20%, and still keep their x86 license.

License? To who? Intel? 20% why?

Basically due to a legal dispute between AMD and Intel, AMD cross-licenses the x86 architecture from Intel. This allows AMD to be a second source of x86 processors.

The cross-license stipulates that not more than 20% of AMD's microprocessors be manufactured by a third party.

Link

 

[21stHermit]

Originally posted by: MetaDFF

Originally posted by: 21stHermit

Originally posted by: myocardia
Well, they would definitely have to stop selling CPU's, since they can only outsource a maximum of 15 or 20%, and still keep their x86 license.

License? To who? Intel? 20% why?

Basically due to a legal dispute between AMD and Intel, AMD cross-licenses the x86 architecture from Intel. This allows AMD to be a second source of x86 processors..

Suggest a wording error here, the cross license in NOT FROM Intel, rather WITH Intel. This is like the automobile companies so they don't spend every waking hour in court.

The cross-license stipulates that not more than 20% of AMD's microprocessors be manufactured by a third party.

If I understand correctly, the license is royalty free but it does carry the 20% clause. Clearly a smart move by Intel, as manufacturing is a major strength, not so with AMD. With that simple clause they put AMD in a huge capitol expenditure box. We're seeing that today.

 

[Viditor]

"The company is denying speculation by at least one stock analyst that it plans to shed one of its two fabs in Dresden, Germany. On Monday, Barron's magazine reported on its Web site that AMD is in talks to sell its Fab 38 in Dresden to Taiwan Semiconductor Manufacturing Co. The story used a report by Jefferies & Co. analyst John Lau as its source.

"While this is not the ideal situation for a microprocessor company, it seems to be the most practical for AMD due to their cash-flow issues," Lau wrote, according to Barron's.

AMD spokesman Travis Bullard said Tuesday the Barron's report is simply "a rumor," and that AMD's plans to convert Fab 38 to newer technology by 2009 "remain on track."

TimesUnion

 

[Martimus]

Well, they would definitely have to stop selling CPU's, since they can only outsource a maximum of 15 or 20%, and still keep their x86 license.

What are you talking about? Cyrix made x86 chips for years without any production facilities. They had IBM produce their chips. AMD could do the same with TSMC, especially since they already have a relationship with them for GPU production.

 

[21stHermit]

Originally posted by: Martimus

Well, they would definitely have to stop selling CPU's, since they can only outsource a maximum of 15 or 20%, and still keep their x86 license.

What are you talking about? Cyrix made x86 chips for years without any production facilities. They had IBM produce their chips. AMD could do the same with TSMC, especially since they already have a relationship with them for GPU production.

If AMD and Intel entered into a X86 cross-licensing agreement whereby it specifically states AMD "may not use more than 20% outside manufacturing" then that statement could be valid.

I doubt you've read the agreement, I know I haven't, so until you can cite chapter and verse, we may have to take the statement at face value.

Hermit

 

[Lonyo]

Originally posted by: myocardia
Well, they would definitely have to stop selling CPU's, since they can only outsource a maximum of 15 or 20%, and still keep their x86 license.

What if it became a joint ownership thing?

 

[ViRGE]

Originally posted by: Lonyo

Originally posted by: myocardia
Well, they would definitely have to stop selling CPU's, since they can only outsource a maximum of 15 or 20%, and still keep their x86 license.

What if it became a joint ownership thing?

That's likely what it would be. This is how VIA gets around Intel in manufacturing x86 chips and chipsets; they technically are in a joint venture with S3, who has a cross-licensing agreement with Intel (S3 had a couple of patents that relate to the Itanium). However S3 is nothing but a shell company, it's really VIA.

If AMD did this, it would probably be the same situation; TSMC would be the real owners & operator, and AMD's name would be on it to keep Intel's lawyers at bay.

 

[smthmlk]

my guess is they're shedding as much dead-weight as possible in preparation for their acquisition by IBM in another quarter or two, as per my prediction some months ago My predictions aside, you just can't bleed the kind of money AMD has been bleeding for four consecutive quarters and not do something major about it. Selling a fab, though? Dunno. Interesting rumor, however. I have a feeling we're going to see a lot more rumors and some big headlines (and not the good kind) about AMD as we head into 08.