AMD considering getting out of fabrication business

hardware.slashdot.org -> arstechnica.com :

2007 has not been kind to AMD. The company saw its workstation market share slip, has taken on $2 billion of new debt, lost almost $1.2 billion over the past two quarters, has been unable to close the gap with Intel when it comes to CPU performance, and has been the subject of recent rumors that Barcelona will be delayed. AMD has been in cost-cutting mode for the past several months and, according to IDG News Service, is considering getting out of the fabrication business.

Speculation is building in the analyst community that AMD will attempt to further cut costs by outsourcing more - or all - of its chip making as early as 2008. One Citigroup analyst is predicting a "transformational move" that would result in AMD's lower-end CPUs being manufactured by a third party and possibly selling off part or all of its Dresden, Germany facility. Another report from Goldman Sachs outlines the investment firm's belief that the company will leave manufacturing completely in the hands of third parties.

Currently, Chartered Semiconductor handles some of AMD's manufacturing, and AMD told Ars Technica last fall that its plans called for Chartered to eventually manufacture CPUs on a 65nm process. AMD also has a long-standing partnership with IBM under which AMD gets to use Big Blue's East Fishkill, NY, plant for R&D and manufacturing.

(2007-06-29 12:33:44 SGT) [Biz] Permalink

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