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AMD Gives Up Its Share In GlobalFoundries

Soulskill posted more than 2 years ago | from the letting-the-chips-fall-where-they-may dept.

AMD 107

MrSeb writes "Three years ago today, AMD spun off its fab division, in a move the company claimed would allow it to more effectively leverage its assets, inject new capital into the foundry side of the business, and make it more competitive vis-à-vis Chipzilla. Today, that dream is dead. AMD announced today that it would give up its 8.8% equity stake in the company. When AMD created GlobalFoundries in 2009, the company held a 34.2% share in the foundry. The main thing that AMD gains from this deal is manufacturing flexibility. Previously, Sunnyvale had agreed to manufacture 28nm APUs solely with GlobalFoundries. This new agreement voids that arrangement, freeing AMD to work with TSMC and other foundries.. It's not an agreement that came cheap, though — not only is AMD giving up its 8.8% equity share of GF, it's agreed to pay the manufacturer some $425 million by the end of Q1 2013. AMD will take a $703M charge against the transaction. It's unclear how this move will pan out. We know AMD killed Krishna/Wichita due to manufacturing problems, Llano limped along for most of 2011, and GF's problems at 32nm impacted AMD's ability to sell 45nm chips into the channel. From a macroeconomic perspective, AMD is simply transferring its business to a foundry partner that's more able to meet its needs. One could argue that AMD's decision to get out of the foundry business is a logical extension of new-CEO Rory Read's plan to de-emphasize cutting-edge silicon in favor of SoCs. Time will tell."

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107 comments

AMD is dead (-1, Troll)

Anonymous Coward | more than 2 years ago | (#39255571)

Pack it up. AMD is dead.

Re:AMD is dead (4, Interesting)

serviscope_minor (664417) | more than 2 years ago | (#39255855)

Pack it up. AMD is dead.

Tell that do my 4x12 6100s.

Intel is faster per thread on the top end. But, bu the time you have 32/48/64 you're obviously running a parallelizable workload. AMD gives way more bang for the buck.

Speakingof which, they just bought SeaMicro. Apparently they can "cram" 512 atoms or 1024 cores into 10u drawing about 5.5kW.

Well, 5.5Kw will get you 6 1U 4x64 6200 servers, which has 1536 rather faster cores and fits in only 6U, with the same power draw.

I'll bet the SeaMicro box is much, much more expensive too.

Not sure how the SeaMicro numbers add up, TBH.

Re:AMD is dead (2, Insightful)

armanox (826486) | more than 2 years ago | (#39255979)

Intel is faster per thread on the mid range too. What AMD has is they're cheap.

Re:AMD is dead (4, Interesting)

unixisc (2429386) | more than 2 years ago | (#39256151)

Not anymore. Once you have no dedicated manufacturing capacity of your own, then during times of general market chip shortage, the fabs will go for the higher margin chips, which AMD can't be since they're selling them @ near break-even prices. The only advantage for AMD here is that that during times of inventory glut, they are under no pressure to keep ordering to keep the lines running, but downside even to that is that fabs would give them a lower priority when the market returns.

Re:AMD is dead (2)

viperidaenz (2515578) | more than 2 years ago | (#39256371)

The benefit is that if they can't sell the volume required to justify the cost of upgrading GlobalFoundries to a smaller process they can use someone else who can already do it.

Re:AMD is dead (2)

Daniel Phillips (238627) | more than 2 years ago | (#39256825)

There are many advantages for AMD, they should have done this some time ago. Dedicated founderies with multiple customers can afford to front the billions required to keep on the leading edge of the feature size curve, and can't be mugged by Intel.

Re:AMD is dead (1)

unixisc (2429386) | more than 2 years ago | (#39258133)

True, but problem w/ multiple foundries is that during times of high demands, they're not going to prioritize low margin CPUs from AMD. They'd also be less inclined to do process tweaks that may improve the yields w/ one customer, but impact their production w/ another.

Re:AMD is dead (2)

serviscope_minor (664417) | more than 2 years ago | (#39259033)

they're not going to prioritize low margin CPUs from AMD.

As opposed to what? Which are the high margin ICs fabbed on the open market?

Re:AMD is dead (1)

unixisc (2429386) | more than 2 years ago | (#39259631)

For TSMC, I'd imagine that Apple's processors - the A5 and A6 - would have much higher margins than AMD's chips, despite being ARMs. Given that Apple gets premium prices for its iToys, I can easily see them signing service level agreements w/ TSMC that would trump just about any of TSMCs other customers - AMD included. TSMC's other customers include Qualcomm, Altera and Broadcom, and I'd imagine that they too would have more clout than AMD

Re:AMD is dead (2)

viperidaenz (2515578) | more than 2 years ago | (#39256357)

6 servers with 4 cpus in each one, with 16 cores per server does not equal 1536 cores, its 384.

You're out by a factor of 4 there. AMD don't produce a 64 core CPU.

You can buy a 64 core system that contains 4 16 core 6200 opterons.

Re:AMD is dead (2)

unixisc (2429386) | more than 2 years ago | (#39256117)

Not so much dead, but during times of allocation, they'll find it much tougher to service their regular customers. W/ their own fabs, they at least had a committed capacity that would enable them to service their priority customers. Now that they're totally fabless, fabs like TSMC would be @ liberty to support them only when they have reliable forecasts, but drop them whenever the market is overheated.

After all, AMD's processors are far lower margin than a lot of the other processors that get fabbed from various places. So when there is a market shortage, fabs would prioritize on their high margin chips, and I'll bet that AMD's is not amongst the top there. And if AMD has trouble supporting its top customers, not only will it lose them to Intel, but price would be their only leverage in getting them back.

As for Global Foundries, maybe they could start fabbing FPGAs and other chips from other vendors.

AMD is dead. (2)

Anonymous Coward | more than 2 years ago | (#39255581)

AMD is dead.

Long live AMD!

Re:AMD is dead. (1)

treeves (963993) | more than 2 years ago | (#39255917)

And I discovered that my castles stand
Upon pillars of salt and pillars of sand [silicon dioxide, that is]

Re:AMD is dead. (1)

Calos (2281322) | more than 2 years ago | (#39256041)

No wonder GF has yield problems if the chips have pillars of salt, sodium is terrible for MOSFETs.

Explains a lot, though.

AMD is dead...? (2, Interesting)

Anonymous Coward | more than 2 years ago | (#39256177)

AMD has been here before. More than once. And somehow has managed to escape oblivion each time.

AMD is still stuck in the manufacturing mentality of the 1980's where "do whatever it takes no matter what" was the mantra. Their former SDC, aka Fab 23, was full of these people, mostly from MMI, who tended to reject new ways of doing things and using better equipment and practices. They wasted millions on equipment that would be installed, qualified and then promptly destroyed by bad, primitive, caveman maintenance practices which also had the effect of ruining processes, resulting in drastically low yields and contaminated product that failed early and (not too) often on their customers. They fell short of production goals time and time again. They stopped telling their own employees what the cumulative yield was so that no one would know how bad things really were.

Intel improved their practices and processes from the start and retrained all their "cavemen" and those who could/would not be trained and continued to use clubs to maintain equipment were sacked. Intel, unlike AMD is focused more on quality rather than quantity, which improves yields which, by some magic that AMD has yet to grasp, increases quantity.

There is nothing here that isn't known within the industry. It's just not general public knowledge.

AMD has some excellent products but their manufacturing hasn't been so excellent. If they aren't willing to get rid of the cavemen and strictly enforce quality, then this may be their final act.

Mixed news (4, Insightful)

O('_')O_Bush (1162487) | more than 2 years ago | (#39255587)

It was a smart (but expensive) strategic move for chasing the cutting edge, but if their business plan is to leave the cutting edge behind, then I fear we lost one of the biggest drivers of progress. Intel might have the technology, but AMD gives them the incentive to keep running with it.

Re:Mixed news (1)

Spy Handler (822350) | more than 2 years ago | (#39255613)

well maybe VIA or Harris will step up and give Intel some competition...

Re:Mixed news (0)

Anonymous Coward | more than 2 years ago | (#39255815)

haha, VIA's flagship products are 7 years old.

What is far far more likely is that we'll see AMD in the doldrums for CPU's for the next 6 months as existing chips exit the channel and no new ones are available. After that AMD will have something to compete with Intel on the same 28nm process.

Right now AMD is uncompetative as long as they are behind by one generation. Like for example an A8 is only HALF the performance of an i7. That's inexcusable, particularly since you can't just put two in them in a motherboard and get parity performance. First because it would cost more than the i7, and second it would consume twice as much power.

Rather AMD needs to build CPU's that cost less than the i7 but offer performance within a narrow band (eg 8%) of Intel parts at the same price, or half the TDP. Like I'd love to use some AMD parts, but I have the TDP target as no more than 50watts per CPU. On intel's side this is met by Intel® Core i7-2860QM Processor - which is a mobile part. Right now I use Intel Xeon Processor L5630's in my servers, or I would if I had to use previous generation hardware. I last bought L series Xeons and they were rock stable.

No more of this stupid 125 watt and 95 watt nonsense. I'm stuck with exactly 4 systems in a 42U rack because the datacenter is not capable of providing more than one 15A circuit per rack. If I want to make that 8, I need sub-50watt parts.

Re:Mixed news (2)

oxdas (2447598) | more than 2 years ago | (#39256229)

I think it will be interesting to see if that gap closes this year. A big part of the problem for AMD is that the current compilers do not optimize properly for bulldozer chips. GCC promised it in the latest release and Microsoft has promised it when they release Windows 8. I have read some places that the performance gains can be more than 30% even on current chips. This is the problem of moving to a new architecture without the market clout to move the market with you.

Re:Mixed news (1, Informative)

slew (2918) | more than 2 years ago | (#39256523)

Right now AMD is uncompetative as long as they are behind by one generation. Like for example an A8 is only HALF the performance of an i7.

In case you weren't aware, Amd A8/Llano is on 32nm as is Intel i7/sandybridge. Intel is shortly moving to the 22nm with Ivybridge...

If Amd abandons Global Foundaries, in the same timeframe, they would likely have tape out on TSMC's 28nm** technology.
If Amd is going to wait, maybe they can use TSMC's new 20nm*** technology.

In general, so how is AMD supposed to keep up with Intel when they don't have access bleeding edge new process technology? This isn't just a "right now" problem, this is gonna be a problem for the forseeable future...

Rather AMD needs to build CPU's that cost less than the i7 but offer performance within a narrow band (eg 8%) of Intel parts at the same price, or half the TDP.

I'm sure they'd love to do that, but it doesn't seem to be in the cards. I think the fact they are abandoning GloFo is an admission that they can't compete in the high end server biz w/ GloFo as the fab. GloFo's process-tech-Fu doesn't compete with Intel's...

** TSMC's 28nm process is actually a 32nm node shrink. Since TSMC couldn't get their 32nm process node going, the decided to abandon it and concentrate on the 32nm 1/2 node "shrink" (aka 28nm with High-K metal gates). This is not unlike how TSMC didn't get 45nm working very well and then quickly moved everyone to 40nm 1/2 node process. Not saying this to bash TSMC, but to illustrate how good Intel is in comparsion to the rest of the fabs out there...

*** TSMC decided to pre-announce that they are skip 22nm and 18nm in advance and are rolling out only a 20nm process (I guess the history with 45nm and 32nm basically convinced them to concentrate their efforts on the 1/2 node). Details are slim, although they hinted at it will be Bulk (not Silicon on Insulator or SOI) and Planar (not 3D FinFET) which is less advanced than Intel's 22nm processor (SOI+FinFET).

Re:Mixed news (1)

lightknight (213164) | more than 2 years ago | (#39258129)

*shrugs*

Were I AMD, I'd keep my revenue streams rolling with whatever I could, while keeping a R&D side project for leapfrogging Intel off the books, so to speak. Simple gains (minor updates in their processes / designs) will not make the giant (Intel) hurt, they (AMD) need something a little more...special. Of course, the project will be risky, but the associated payoffs should be well worth the price -> that's including cost overruns, inflation, and assuming they screw-up their product launch.

Re:Mixed news (1)

digitalsolo (1175321) | more than 2 years ago | (#39261119)

I would love to see AMD do this, but honestly, outside of CPU/GPU hybrid tech (they do have a great graphics division after all) I don't see this happening. Honestly, they've never really been able to leapfrog Intel. The times they have had the lead had more to do with Intel missteps than AMD having advanced tech.

I have long been a big AMD fan, I'm just not sure they have the power to stay relevant in the cutting edge. At the moment AMD seems to agree. Perhaps they can keep pushing the midrange stuff though, honestly that's where I (and most people) spend most of my money anyway.

Re:Mixed news (1)

lightknight (213164) | more than 2 years ago | (#39263801)

I'd disagree that they have not had, at several points in time, superior technology. However, they do appear to be hurting in the workstation arena -> their server processors are sought after, but the latest Bulldozers appear to need some work. It's nice to know that we are finally getting some Hyperthreading on AMD processors, the same way Intel did with theirs years ago, and that is even better than Intel's, but like Intel's, it will take at least a two years to begin to have the desired effect.

Hyperthreading, for those who remember, was hell on earth for those running a MS OS at the time. Windows saw two processors where there was only one (first was the actual processor, second was the Hyperthreading component), and because of this, would schedule things to the second unit while the first one was at 100% usage.

I guess if I were AMD, I'd keep packing on the cores to my processors, as that alone is enough to keep them afloat (single-threaded performance is so 1999, and with the advent of virtual machines & what not, there is a fair market for processors with more cores).

Re:Mixed news (0)

Anonymous Coward | more than 2 years ago | (#39257773)

haha, VIA's flagship products are 7 years old.

I have been reading about their new "Quadcore" CPU (even if no one is actually selling it). Seems like pretty modern silicon to me, but my last experience with VIA was a 733MHz C3 that flew along like a 233MHZ PII.

Like I'd love to use some AMD parts, but I have the TDP target as no more than 50watts per CPU. On intel's side this is met by Intel® Core i7-2860QM Processor - which is a mobile part.

Are you able to use more than 16G of RAM with your Core i7-2860QM/2820QM? I was eyeballing these, but it looks like a 16G limit, which isn't going to cut it for me.The Xeon E3-1260L looks like a fine part, but is as un-buyable as a VIA Quadcore.

Re:Mixed news (0)

Anonymous Coward | more than 2 years ago | (#39258611)

One 15 amp circuit per rack?

Hurricane Electric has never been considered a "real" datacenter for this reason.

Quit using amd parts from 2007, and try a real datacenter.

Re:Mixed news (1)

risom (1400035) | more than 2 years ago | (#39259069)

No more of this stupid 125 watt and 95 watt nonsense. I'm stuck with exactly 4 systems in a 42U rack because the datacenter is not capable of providing more than one 15A circuit per rack. If I want to make that 8, I need sub-50watt parts.

Have a look at the Opteron 4256 EE - 8 x 1.6GHz, 35W TDP. I don't know what you do with with your servers, but for a threaded web server like Apache that is a very viable option me thinks.

Re:Mixed news (1)

oxdas (2447598) | more than 2 years ago | (#39256087)

It seems like VIA has been more interested in HTC for the time being (they are run by a husband and wife team).

Re:Mixed news (1)

O('_')O_Bush (1162487) | more than 2 years ago | (#39255633)

Also, I realize Cutting Edge Silicon does not necessarily equal cutting edge, but until there is a technology that allows for a unified memory architecture, I don't see how a SoC will compete wish discrete components (or have incentive to on the cutting edge) that have a reason to be regularly upgraded for reasons other than CPU interaction.

Re:Mixed news (2)

Daniel Phillips (238627) | more than 2 years ago | (#39255825)

What is not cutting edge about TSMC?

Re:Mixed news (1)

Calos (2281322) | more than 2 years ago | (#39256105)

They're a foundry. They make a lot of very different products, and don't design them. This limits their capability to design for manufacturing, and doesn't let them tweak their processes to match the designs. That's the disadvantage of abstraction - they have a good general solution which can easily be matched to many uses, but it will never be as good at a specific use than a solution designed explicitly for that use. They're also just a foundry - they only have to compete with the other foundries, not keep up with Intel, as Intel is not their direct competitor.

If you follow the industry and are interested in the details of device design and fabrication, it certainly seems like Intel is rather ahead of the pack.

Re:Mixed news (4, Interesting)

Daniel Phillips (238627) | more than 2 years ago | (#39256421)

AMD isn't giving up design, just the foundary. And in future, Intel must compete with TSMC and friends in process technology, as opposed to their time tested strategy of cutting off AMD's air supply. Makes it more of a game now don't you think?

Re:Mixed news (1)

Calos (2281322) | more than 2 years ago | (#39256811)

No, you misunderstood. Maybe I wasn't clear.

When you control the design and the manufacture, you have intimate knowledge of both. You can better design for the manufacturing process, and alter the manufacturing process to suit the design. This just isn't possible to the same extent when you work through a foundry. And not only that, there's overwhelming evidence that Intel's process know-how is better than TSMCs. TI don't think it's any coincidence that the prolific microprocessors have all been made by the companies that designed them: Intel, IBM, AMD. Foundries are great for simple things, for low-budget things, for cookie cutter things like ARM SoCs. But they have never competed well with the big dogs. And no, Intel and TSMC will not be competing directly on process technology. Intel products will compete with AMD products; TSMC will compete with other foundries to keep AMD's business. AMD is up a creek if the foundries can't keep up with Intel, and historically they haven't. Most of the foundries' business is based on thin, thin margins, a few pennies per part, for small cookie cutter SoCs and that kind of thing - things that are more or less commoditized. They can't afford to be buying the equipment and doing all the work needed to convert to new tools and processes and make it work. Do you have any idea how much modern semiconductor manufacturing tools cost? Millions of dollars each, some tens of millions. And you need several to run any amount of wafers in a reasonable time. Modern fabs are several billion dollar investments. It's not cost-effective for the foundries. To do it, you have to be making more margin on your parts.

I guess I should realize who I'm talking to - you say "their time tested strategy of cutting off AMD's air supply," so I assume you're an AMD fanboy who just isn't going to hear bad things about them or their decisions. And it's ironic, because it's not like Intel ever sabotaged AMD's manufacturing. The things that Intel supposedly did occurred at the OEMs. AMD using TSMC won't make a lick of difference in that regard. Not that, from what I can tell, there's good evidence Intel did anything so bad anyway. If it was half as bad as the fanboys would have you believe, governments around the world would be doing more than a few million dollars in a fine (to the government, even), and AMD wouldn't be settling for a couple hundred million or whatever that amount was.

Re:Mixed news (3, Interesting)

erice (13380) | more than 2 years ago | (#39256933)

When you control the design and the manufacture, you have intimate knowledge of both. You can better design for the manufacturing process, and alter the manufacturing process to suit the design. This just isn't possible to the same extent when you work through a foundry

True, but AMD has not opperated this way since they initially spun off Global Foundaries. Bobcat and Bulldozer were specifically designed to be portable between foundaries and not dependent on special process tweeks. AMD's recent experience with Global Foundaries was the worst of both worlds: limited control and poor execution. Since AMD doesn't have the money to re-enter the fab business, the only viable direction available was to cut the cord and become truly fabless. They might not get any better control but at least they should be able to find a foundary that can execute.

Re:Mixed news (2)

Daniel Phillips (238627) | more than 2 years ago | (#39257303)

governments around the world would be doing more than a few million dollars in a fine (to the government, even), and AMD wouldn't be settling for a couple hundred million or whatever that amount was.

$1.25 billion. You do not have a clue what you are talking about and come across as an astroturing apologist. That Intel did wrong is not in question.

Compared to Intel? (1)

Sycraft-fu (314770) | more than 2 years ago | (#39257749)

They are a node behind. TSMC just got their 28nm stuff out the door (they decided to skip the 32nm node and do only the 28nm half node). Products using it are on retail shelves, but only as of like a month ago. So where? Intel? Just about to launch 22nm for full retail availability. They are a node ahead, they are almost always a node ahead.

That would, by definition, make TSMC not cutting edge. If someone else is on newer technology than you, you aren't cutting edge. Not saying that is horrible or anything, just that it isn't cutting edge.

However I think it also perhaps demonstrates one of the things that makes Intel great is they invest a shitload of R&D in fabs. It isn't magic they are where they are in terms of being ahead, it is billions of dollars a year poured in to development.

As an example their 22nm is up and in full swing, however they've already been working on their new 14nm fab in Chandler. I don't mean working as in "playing around with the idea" I mean they are moving full steam ahead with the construction (extremely, extremely exacting construction), hiring people, etc.

Re:Mixed news (0)

Anonymous Coward | more than 2 years ago | (#39256033)

Intel has enough competitive drivers these days.

Intel has to compete with itself.
If there is no reason to upgrade from a core-i7, why would anyone bother to by a new Intel processor?

Not to mention the attack from below from ARM vendors.

Re:Mixed news (1)

unixisc (2429386) | more than 2 years ago | (#39256707)

ARM is not going to threaten the x64 PC business, however much MS may want it. No RISC has ever managed to run that huge base of Windows software - not even Alphas w/ FX!32, and ARM will be even less capable of doing it. Yeah, they'll have native apps, like what MS ports there, but what that will do is badly mangle the brand image of Windows, where you will have one version of Windows that runs Windows software, and another that doesn't.

I agree w/ the other observation - that Intel's biggest competitor is itself. However, if Intel can find a new high-margin chip that it can make - such as solar powered chips that were discussed recently - then they don't have to do anything more to the i7 than just keep running it on depreciated fabs, while using newer processes for such more innovative technologies.

Re:Mixed news (1)

TheRaven64 (641858) | more than 2 years ago | (#39259621)

The two are not unrelated. ARM is pushing Intel on the high-volume, low margin end. ARM SoC vendors will sell you a SoC for less than Intel will sell you a CPU - and it will use a tenth the power. The high end is getting really small. Supercomputers are still around, but that entire market is well under a million CPUs per year, and it's being attacked by GPU and DSP makers. Worse, it's become a lot cheaper to design a custom ASIC over the past decade, so a lot of tasks where performance is all that matters are now being done on dedicated silicon, rather than off-the-shelf Intel / IBM / DEC CPUs as they were in the '90s. You can do a run of a thousand custom chips on a decent process for a lot less than the cost of building a supercomputer, and it takes a lot less space. The middle, where Intel is king, is also shrinking. In the 90s, a computer more than six months old was slow. Now people are using 5-10 year old computers and, aside from a few niches like gamers (who are increasingly using consoles, or playing console ports so not needing the latest and greatest desktop) finding that they're still mostly fast enough.

Re:Mixed news (1)

unixisc (2429386) | more than 2 years ago | (#39263651)

All this is correct, except that it ignores the elephant in the room - Wintel. For laptops, the x64 will remain the sole platform, and ARM ain't gonna change it. MS can port all the Windows 8 apps to ARM that it wants, but none of that will change the fact that most home users have software that they've either paid for, or must keep running on their newer PCs. That's why past attempts by Unix to dethrone Windows on the desktop always failed, that's a good part of the reason why Linux & BSD haven't done it either, it's even the reason that NT on RISC platforms like the Alpha & MIPS never took off (although in the last case, MS never ported more than a handful of their apps to these platforms). ARM will successfully keep Intel out of the tablet market (although those who want to make Windows 8 tablets would do well to consider Fusion & Medfield). But it won't be able to displace Intel on either the laptop markets, where inertia is greatest, nor on server markets, where you have more players like Sparc, MIPS, POWER and so on.

SoCs? (3, Informative)

Speare (84249) | more than 2 years ago | (#39255647)

new-CEO Rory Read's plan to de-emphasize cutting-edge silicon in favor of SoCs

After some eyebrow knitting, my best guess is "Systems on a Chip"? Eschew obfuscation, expand jargon abbreviations.

Re:SoCs? (2, Funny)

Anonymous Coward | more than 2 years ago | (#39255665)

Probably better than my guess of "Sucking on Cocks". But then, that seems to be part of his strategy too.

seems... weird. (3, Insightful)

catmistake (814204) | more than 2 years ago | (#39255691)

It's like... Ford decides to spin off its auto business so it isn't tied down to one manufacturer, and can then produce Ford's at Chevy and Dodge and even Honda plants. Why does it seem like someone decided the AMD brand was more valuable than its product? Does this help the consumer in any way to separate brand from product?

Re:seems... weird. (1)

Overzeetop (214511) | more than 2 years ago | (#39255723)

I have this strange feeling that somebody got a really big bonus near the beginning of that move for the forethought and insight needed to expand the capital base of the combined operations. Now it's time to pay for the error, but that bonus money is already well offshore and out of harms way by now.

Re:seems... weird. (2)

networkBoy (774728) | more than 2 years ago | (#39255743)

Yes it does help.
I think they were stupid for spinning off GF in the first place, but, since they have, sloughing off the rest is a good thing. They now can shop around (within some limits*) for who has the best/most compatible with their design process at a given node. So at 45nM they may use UMC, while at 32 nM they stay with GF and for 22nM they go to TSMC.
-nB
  *Limits: good luck getting IBM or Intel to fab their chips IMHO.

Re:seems... weird. (2)

serviscope_minor (664417) | more than 2 years ago | (#39255885)

good luck getting IBM or Intel to fab their chips IMHO.

Intel, sure, but IBM?

IBMs rather sucessful business strategy seems to be to take money for whatever reason people want to give it to IBM for. I'm pretty sure I've heard of them doing 3rd party fabbing in the past.

Re:seems... weird. (1)

Calos (2281322) | more than 2 years ago | (#39256135)

Quick look at IBMs website says they do have foundry services.

Also, don't forget that IBM heads a consortium of companies working on process technology together... which, last I knew, included both TSMC and GF.

Re:seems... weird. (1)

unixisc (2429386) | more than 2 years ago | (#39256173)

Particularly since AMD's chips don't compete head to head w/ POWER7. Maybe Opteron & Bulldozer do, but IBM could easily choose to fab their other chips except those 2.

Also (1)

Sycraft-fu (314770) | more than 2 years ago | (#39257795)

All the "shopping around" in the world doesn't change the fact Intel has better fabs than anyone else. As I pointed out in another post TSMC just got 28nm fully online, retail parts on the market (AMD videocards mostly). That's the 32nm half node, they skipped over the 32nm node for some reason, which lead to delays for them. Ok fair enough but Intel has 22nm up and running full swing, retail availability coming shortly. They are, as usual, a node ahead.

Now this doesn't happen because the magic faeries like Intel or something, it happens because Intel pours billions in to fab R&D, and the own the fabs. That means that they get to reap the benefits and nobody else does.

I could totally buy the "Fabs? We don't need no stinking fabs!" argument as legit in terms of getting better tech for less money except it isn't the case. Intel has the most advanced fabs out there and they have them because they spend massive money building them.

Re:Also (1)

TheRaven64 (641858) | more than 2 years ago | (#39259647)

Intel can pour money into process R&D because they have lots of money. It's easy to forget how much bigger Intel is than AMD. Intel spent about $6.5bn on R&D last year. This is more than AMD's total revenue. It is simply not possible for AMD to spend more than about a fifth of what Intel does on R&D. Their sales volumes are also much lower, so they can't amortise the R&D cost over a lot more chips. For every CPU AMD sells, Intel sells four. That means that if Intel spends one dollar per chip on R&D and AMD spends one dollar per chip on R&D, then Intel is still outspending AMD 4:1.

That was the entire point of spinning off GF in the first place. AMD can't outspend Intel on process R&D (including fab construction), but AMD plus other GF customers might be able to between them.

Re:seems... weird. (0)

Anonymous Coward | more than 2 years ago | (#39255761)

AMD was faced with a choice: fight or die... or turn onto the long road to obsolescence. As any executive team would do when faced with the potential loss of hundreds of millions in bonuses, they chose the path which minimizes risk to their gravy train, but which eventually dooms AMD. To achieve this feat, they sold the board and shareholders on the fantasy of mimicking ARM, Apple, or whatever company du jour happens to fit the scheme.

Re:seems... weird. (1)

unixisc (2429386) | more than 2 years ago | (#39256217)

Problem is that they are responsible for boosting this quarter's numbers, no matter what time 'this' refers to, and when companies have not been doing too well revenue-wise, they invariably pick such short term tactics to minimize the damage to their bottom line. Selling the fabs minimizes their liability, but also eliminates their guaranteed capacity when the market is hot, and could indeed end up eliminating them from the market simply b'cos they have nothing to sell.

Car Analogy Fail (3, Informative)

Anonymous Coward | more than 2 years ago | (#39255773)

It's like... Ford decides to spin off its auto business so it isn't tied down to one manufacturer, and can then produce Ford's at Chevy and Dodge and even Honda plants.

Chevy, Dodge and Honda are competitors of Ford, AMD isn't doing this to be able to manufacture chips at a foundry owned by Intel.

Why does it seem like someone decided the AMD brand was more valuable than its product?

Because you don't understand what's happening. This move enables AMD to build chips at any foundry, in fact it means they can use the best foundry rather than being tied to an underperforming one thus resulting in a better product.

Re:Car Analogy Fail (1)

catmistake (814204) | more than 2 years ago | (#39256793)

Because you don't understand what's happening.

Ya think? Why wouldn't this work for, say, Hardees? Hardees has a horrible franchise... the menu is similar to most of its competitors, but the implementation is crap. So can they just sell off their burger franchises and then use, say, KFC's and Long John Silver's franchises, to achieve better performance at the drive thru and customers' pallet? No... I don't understand business... but this just sounds like slight of hand. I think what really happened is when they "spun off the foundry," AMD ceased to exist, and a new thing became AMD, and the foundry got a new name. Or AMD is something like the Dread Pirate Roberts.

Re:Car Analogy Fail (0)

Anonymous Coward | more than 2 years ago | (#39256883)

Think of it more like Apple used to manufacture their own computers once upon a time. But now they just design the computers and pay other companies to manufacture them. Apple seems to be getting by okay with this strategy.

Re:Car Analogy Fail (1)

garyebickford (222422) | more than 2 years ago | (#39256917)

I've seen at airports multiple restaurants, including well-known chains and very different price points and styles (sit down vs. fastfood, etc.), that are all using the same kitchen - it's just four different front ends on the same backend.

Re:Car Analogy Fail (5, Insightful)

Volvogga (867092) | more than 2 years ago | (#39257491)

Your example of restaurants works. You just don't understand that it works because, as you say, you don't understand business. To be specific, you don't understand the purpose of a business when you see one. I'm guessing Hardees sells fried chicken... assuming they do, the proper analogy here is that you say Hardees owns their own string of chicken farms throughout the USA. Hardees decides that their thing is making food with a specific flavor, not keeping birds alive until they reach the proper weight to be dead birds that are tasty. So they create a new company, and put the chicken farms into that new company's name. Now Hardees has to only focus on applying breading and spice to raw chicken before deep-frying it to a lovely crisp, and can let the new company focus on how much corn to mix into chicken feed to produce the largest, healthiest chickens in the shortest amount of time while still fulfilling their contractual duties to provide so many pounds of chicken meat to Hardees every month.

Now say that the new chicken farming business isn't doing a good job of raising their chickens... they are too small and kinda chewy. Hardees doesn't want you to buy a chewy bird from them. They may loose you as a customer. So, Hardees says to the new chicken farming company, "you are your own business and are not performing up to our standards, so we shall take our business elsewhere". Hardees starts buying chicken from another chicken farm company. Now you go to Hardees and your neighbor goes to KFC. Guess what? KFC and Hardees both buy their chicken from the same company. You get home and enjoy Gary the Chicken, and your neighbor is enjoying Larry the Chicken, who is Gary's younger brother by 3 minutes.

You do not go to Hardees to get a specific chicken. You go to get a chicken that is safe, edible, and has a particular flavor that Hardees supplies with their blend of spices and/or choice of frying oil. This is what is happening with AMD right now. You buy a hunk of silicone that conforms to an AMD design, and meets certain standards and quality that AMD is guaranteeing you that the chip will have. Who made that silicone, for the most part, is irrelevant to the customer. That is AMD's problem. If they choose a manufacture that is slow, unreliable, or ships AMD lots of defective products, then AMD will take their business to a manufacture that is more competent or better suits their needs. So basically, AMD has decided that they want to focus on chip design, not both chip design and chip manufacturing.

Re:seems... weird. (1)

AvitarX (172628) | more than 2 years ago | (#39255839)

Kind of like how when Mini came back into existence it contracted BMW to make the cars, with BMW staying arms length until it was a huge success and they were purchased by BMW later? It worked for them.

Re:seems... weird. (1)

Guy Harris (3803) | more than 2 years ago | (#39256863)

Kind of like how when Mini came back into existence it contracted BMW to make the cars, with BMW staying arms length until it was a huge success and they were purchased by BMW later?

More like "BMW purchased the Rover Group, descendants of Austin/Morris/Leyland/etc., and makers of the original Mini, and, under BMW's ownership, they introduced the new MINI."

That might be like Intel buying up AMD and then using the AMD brand name, and perhaps designs, for a new line of Intel x86 processors for markets not served (or not well served) by existing Intel x86's.

(At this point, the car analogy now sits by the side of the road with its radiator spewing out steam and oil dripping from the engine....)

Re:seems... weird. (1)

garyebickford (222422) | more than 2 years ago | (#39256947)

That might be like Intel buying up AMD and then using the AMD brand name, and perhaps designs, for a new line of Intel x86 processors for markets not served (or not well served) by existing Intel x86's.

Actually that's exactly what happens quite often in multiple industries. That's how Oldsmobile, Buick, Jeep, and many other car brands became parts of the big auto companies. And Celestial Seasonings, Hidden Valley Ranch salad dressings, Sara Lee, 90% of all alcohol brands, everything Pepsico and Yum Brands sell, and just about every food brand that's been around for more than a few years.

Mobile Anyone (0)

Anonymous Coward | more than 2 years ago | (#39255783)

I think some of you are forgetting about smaller form factors including mobile. This might be a genius move in the end.

Re:Mobile Anyone (1)

Osgeld (1900440) | more than 2 years ago | (#39256075)

doubt it, there are a billion top notch embedded chips out now and AMD still seems to be thinking "in the future", the future is already a few generations old

Re:Mobile Anyone (1)

unixisc (2429386) | more than 2 years ago | (#39259609)

Complete non-sequitur! Small form factors would imply some advanced packaging solutions, which ain't what AMD was doing here - they're just going totally fabless. Small form factors is something useful for mobile platforms, and the main efforts in that are in die shrinking - requires good design of die, as well as appropriate aspect ratios, as well as package scaling. Some of the advanced package companies like Tessera are there, as well as packaging companies like Amkor. Not to forget advanced tooling that would be needed had that been the case.

Such a reason would be a cause of greater investment into a whole slew of new things, including fabs. But instead, AMD is exiting the fab business completely!

Hang in there, AMD. (4, Insightful)

Beelzebud (1361137) | more than 2 years ago | (#39255925)

I hope they know what they're doing because I for one do not look forward to a PC marketplace dominated by only Intel and Nvidia.

Re:Hang in there, AMD. (2)

Glasswire (302197) | more than 2 years ago | (#39256243)

I hope they know what they're doing because I for one do not look forward to a PC marketplace dominated by only Intel and Nvidia.

Plus about 10 ARM companies. Intel has a bigger challenge now than AMD has given them for years.

Not for the desktop (1)

Sycraft-fu (314770) | more than 2 years ago | (#39257765)

The ARM heads love to go on about that but as of yet there are no ARM chips that compete in the desktop space. ARM chips start going out around the level Intel chips start coming in. What's more, they'd face a real uphill battle due to binary compatibility. It is just easier to run a chip that'll run all your old shit unmodified. ARM would have to offer some serious benefits to win people over.

Re:Not for the desktop (1)

TheRaven64 (641858) | more than 2 years ago | (#39259659)

The ARM heads love to go on about that but as of yet there are no ARM chips that compete in the desktop space

In case you haven't been paying attention for the past 5 years, the desktop is a shrinking market. The big growth markets for CPUs are mobile and low power servers. If you want to know how well being the market leader in a shrinking market segment works out in the long run, just ask SGI...

Re:Not for the desktop (1)

gl4ss (559668) | more than 2 years ago | (#39260049)

shrinking? growth may not have been as big as previously, but I wouldn't call it shrinking.

but if you had been paying attention yourself, you'd remember reading the armheads comments about arm besting x86 about 5 years ago. and 10 years ago. hell, even on offline magazines 17 years ago. even the same shit about a supercomputer under your desk from cheap cpu's.

but they're for different markets. and one thing intel has is the fabs and amd doesn't. that's losing a lot.

I have, you haven't (1)

Sycraft-fu (314770) | more than 2 years ago | (#39262291)

The desktop market hasn't shrunk a bit, it just isn't growing as fast as it was, nor nearly as fast as personal devices like smartphones.

New computer markets don't tend to kill off old ones. Like mainframes. Not only are they still around and sold, but there are more of them now than when they were the only computers you could get. Desktops out number them by many orders of magnitude but they didn't kill them. Nor did laptops kill desktops nor will smartphones kill laptops (and desktops).

Turns out that a smartphone and tablet are nice toys for surfing the net but when you need to get shit done, a regular old desktop and/or laptop are what you want.

Re:Hang in there, AMD. (1)

Kjella (173770) | more than 2 years ago | (#39259489)

Plus about 10 ARM companies. Intel has a bigger challenge now than AMD has given them for years.

Meh, if Intel maintains domination over laptops, desktops, servers and supercomputers they'll have a ton of resources to push into the smartphone/tablet battle. I think they'll find being ten 30-pound kids doesn't match one 300-pound sumo wrestler. The Atom is still basically the same 2008 design which was designed for netbooks/nettops, Medfield and Clover Field this year are just repurposed stop gaps. Silvermont in 2013 is their first real smartphone/tablet design, I suspect it'll be a big wake-up call. Intel is not going to sit idly by and watch ARM take their market, they will retaliate. AMD discovered that, so will the ARM producers I think.

Re:Hang in there, AMD. (1)

TheRaven64 (641858) | more than 2 years ago | (#39259671)

Meh, if Intel maintains domination over laptops, desktops, servers and supercomputers

That's a big if. Desktops, sure - but they're a shrinking market. Laptops? Well, I have one Intel laptop and one ARM laptop at the moment. The Intel one wins on raw speed, but the ARM one wins on everything else (battery life, cost, and so on). And increasingly laptops are likely to want to use the same chips as smartphones and tablets, which are rapidly growing markets. Servers? They increasingly care about power consumption. The A15 is likely to make big inroads into this market, because you can fit quite a lot of them in a 1U chassis without loading the power supply or air conditioning. A lot of the rest of this market is small business servers, where having something small and appliance-like is very useful, and these tend to use MIPS or ARM chips (historically more MIPS than ARM, but this is changing). Supercomputers? This is where ARM is currently pushing, with CPU and GPU on the same die, behind the same memory controller, so running part of a calculation on the GPU is only marginally more expensive than running it on the SIMD unit. nVidia is aiming squarely at this market with their ARMv8 offerings, due later this year. I wouldn't bet on Intel holding on to that market, although no doubt they'll remain a significant player in it for a while.

Re:Hang in there, AMD. (1)

unixisc (2429386) | more than 2 years ago | (#39263493)

Despite all attempts by MS to pretend otherwise, desktops & laptops are still heavily locked on the Wintel platform, something that ARM ain't gonna change. For servers, the situation would be worse for ARM, since you now have in addition to Xeon & Opteron, the various server processors like Sparc, POWER and like you mentioned, MIPS - all of which have far greater performance than ARM does. Supercomputers do depend more on interconnects, but they still like to make do w/ fewer CPUs w/ greater performance. The only place where I see ARM retaining its hold is tablets and smartphones.

Re:Hang in there, AMD. (1)

tlhIngan (30335) | more than 2 years ago | (#39261951)

I hope they know what they're doing because I for one do not look forward to a PC marketplace dominated by only Intel and Nvidia.

And you won't.

Because Intel needs AMD just like Microsoft needs Apple. If Intel wanted, they could crush AMD in a heartbeat, but they won't because once AMD dies, Intel's going to get a lot of scrutiny, even if the sole reason AMD died was their CEO did something stupid and it wasn't Intel's fault.

So AMD keeps the regulators off Intel's back, just like Apple keeps regulators off Microsoft's back. (And how Apple keeps regulators of Google's back - if it wasn't for iAds, Google would be blocked from acquiring AdMob, the largest mobile advertising nework). Sure they all compete, but everyone knows that competition keeps the government at bay. The worst thing in the world for Android would be for Apple to abandon iOS, for example (which won't happen in the short term, given how much money Apple makes from iOS).

So with everyone's fortunes tied up in everyone else, it wouldn't surprise me if Intel offered foundry services to AMD (in secret with no direct contact), or if Intel had plans that amounted to buying up piles of AMD chips and burying them, just to keep AMD afloat.

The Intel-AMD situation is probably ideal for Intel - AMD's just that yappy little dog trying to get at your ankles that has some marketshare that doesn't really threaten Intel's, but offers just enough competition to ward off the big dogs of government.

Apple-Microsoft, not so much - Microsoft probably wanted to keep Apple small and yappy like AMD, except that yappy little dog decided to attack some other ankles and grew bigger.

Sure, the public PR has them attacking each other, but you can bet behind closed doors everyone's far more chummy. Heck, I don't think there's as much anti-Microsoft rhetoric from the Apple fanbois these days

"Real men have fabs." AMD founder Jerry Sanders (1)

Glasswire (302197) | more than 2 years ago | (#39256233)

I don't know what it makes you if you don't even own SHARES in a fab....

Re:"Real men have fabs." AMD founder Jerry Sanders (0)

Anonymous Coward | more than 2 years ago | (#39256735)

They're nuts! I was hoping the ex-IBMer CEO would set things right after that disaster named Hector left, but unfortunately this new guy came from the PC division i.e. Lenovo. So he thinks everything can be outsourced. What an idiot! AMD only managed to survive against Intel because it was able to manufacture its own chips. TSMC has not been a successfull CPU foundry by a long shot. Just ask VIA or Transmeta how many CPUs they sell and what clock frequency they can hit. Even the consoles use IBM chips manufactured at East Fishkill which use the same process as Globalfoundries. Using IBM as a semiconductor foundry is also a bad idea (Cyrix, oops). Using their fab is expensive and you are liable to get bankrupt in the process. Only the console guys hang on to to it because their business model is different. They earn their cash on game royalties not the hardware per se.

You cannot survive as a pure play x86 manufacturer without having a vertically integrated business. Plus with all the graphics cards and CPUs AMD sell you would think it would be cheaper for them to buy their own fab. You could buy like a quarter of a fab with those $400 something million USD they are just going to throw away. What kind of a fool sells stock at cost anyway?

Re:"Real men have fabs." AMD founder Jerry Sanders (1)

cshark (673578) | more than 2 years ago | (#39257523)

The fab isn't really the important part of the industry anymore. It's the ideas, the product design that's important. Have we not learned anything from our friends at Apple?

Re:"Real men have fabs." AMD founder Jerry Sanders (2)

unixisc (2429386) | more than 2 years ago | (#39258897)

Unlike AMD, Apple was never a microprocessor manufacturer - not even when they were part of the AIM alliance for PPC. Since they just bought their CPUs from IBM and Motorola, there was no question of them owning their fabs, but they did own their other manufacturing, and still do.

For Apples A-series processors, the situation is very different, since these are simple designs that most standard foundries can manufacture, w/o elaborate process tweaks that are necessary when making x64s or POWERs or other high end CPUs. Any foundry can make ARM CPUs, which is why Apple can take them to TSMC, Samsung or whoever. Incidentally, I'll predict that Apple will easily get a far more favored customer status from TSMC, particularly during times of allocation, since their margins would be a lot better than what AMD can afford.

As one poster above pointed out, Intel's leadership in the semiconductor sector comes directly from the fact that they alone are a vendor willing to spend top $$$ on their fab R&D. The fabless model is good for startups and low end players who don't have a long term plan to keep growing or retain market share, but if a company is a big player, then owning as much of their supply chain as possible is a good thing, since it puts their costs within their control.

Re:"Real men have fabs." AMD founder Jerry Sanders (1)

gl4ss (559668) | more than 2 years ago | (#39260029)

yes, that anyone who buys a design can be a cpu provider.

Bad negotiators at AMD. (0)

Anonymous Coward | more than 2 years ago | (#39256385)

How the hell does one end up PAYING MONEY to give up a share? Usually one GETS PAID for such an action.

Re:Bad negotiators at AMD. (0)

Anonymous Coward | more than 2 years ago | (#39256751)

They had an exclusivity clause in their contract. Presumably the terms dictated that they essentially had to give up the shares and cash to pay the penalty. Now, whether or not that's a good idea is up for debate, but presumably they signed the deal well before GF's production problems damaged the business. Not sure why they couldn't just cut the contract though.

rory read (-1)

Anonymous Coward | more than 2 years ago | (#39256763)

m i s t a k e

Step 2 of How to kill AMD in 7 steps (1, Interesting)

Deathlizard (115856) | more than 2 years ago | (#39256785)

Back when they first announced their foundry spin off, I posted The Following: [slashdot.org]

1) AMD Spins off Fabs.
2) Intel/VIA/TMSC/IBM buys AMD Fabs.
3) Intel/VIA/TMSC/IBM Fabs charges huge price to manufacture AMD CPU's.
4) AMD CPU Prices skyrocket. Unable to find a cheap reliable FAB, AMD loses price competitive edge.
5) AMD Stock tanks.
6) ...
7) LOSS.

We are now currently at Step 2. Although I never would have known three years ago that Step 2 would turn out to be "Globalfoundries Buys AMD out of Fabs" but either way, here we are today.

Now, time to move on to Step 3...

Re:Step 2 of How to kill AMD in 7 steps (1)

oxdas (2447598) | more than 2 years ago | (#39257187)

I thought Global Foundries was owned by the King of Dubai (seriously, they sold it to the government/royal family of Dubai).

Re:Step 2 of How to kill AMD in 7 steps (0)

Anonymous Coward | more than 2 years ago | (#39258959)

Their majority stakeholder is Abu Dhabi based Advanced Technology Investment Co. which is owned by the Abu Dhabi ruler, and they have plans to add another Fab in Abu Dhabi this year, in addition to the 8 they already have.

Somehow, I can't see them trying to outspend Intel in fab research, which would be a good way to be a better foundry company than TSMC, GSMC, Winbond and so on.

Smart move for AMD (1)

Bryan Ischo (893) | more than 2 years ago | (#39256981)

AMD has seen the writing on the wall: there is very little incentive to spend the money required to further the state of the art in x86. Intel is slowing down its development pace on x86 and AMD is as well; there simply isn't much money in making faster x86 processors because they have already achieved sufficient speed for 95% of what 95% of consumers do with x86 CPUs 95% of the time.

What would be the point of sinking huge funds into becoming more competitive in a market that is going to become increasingly irrelevant going forward? Mobile devices are the trend and x86 does not compete there. Aside from Intel, which has momentum built up that will take a little while to wind down, x86 development is in the process of stagnating. It's quite clear when major x86 CPU announcements are now years apart instead of less than a year like they used to be. This trend will continue.

Hope you are satisfied with the current crop of i7 processors because x86 is not going to get significantly faster, at least not at the consumer level.

AMD will instead focus on trying to compete in a segment of the x86 market that may remain relevant over the long term: SoCs for embedded applications. I think it's a smart move because it's the market that AMD has the best chance of being competive in.

I predict that the fastest x86 CPU will ever be made will be no more than 50% faster than the current fastest Core i7. Intel's development dollar momentum will carry us through to that but nobody, including Intel, is going to be willing to invest significantly more in x86.

bad move (0)

Anonymous Coward | more than 2 years ago | (#39257451)

Divesting the company of its core competency is never a good idea. Making killer fabs was one of AMD's core competencies. I don't see a bright future for AMD with this move. And that's sad, because the CPU space is lacking competition as is. The last thing we need is to see AMD wither and die.

Global Foundries may be dying much more than AMD. (1)

drhank1980 (1225872) | more than 2 years ago | (#39257847)

This story strikes me as more gloomy for Global Foundries. AMD is effectively paying to get out of their stake in the company. Last I knew Global had ST and AMD for major customers only. Now with AMD obviously unhappy with the line yields and slow execution on advanced processing nodes we can only assume that they will at least in the short term be looking to TSMC. If Global is not able to quickly back fill with orders from somewhere else their cost situation is only going to get worse. The only bright point for Global I can see is the 2012 contract not being pay for good die only, something I have never heard of in any other supply agreement in the industry. (I have seen price breaks for yield dips or non-acceptance of yields below a certain point, but nothing like pay for good die only).

Re:Global Foundries may be dying much more than AM (1)

unixisc (2429386) | more than 2 years ago | (#39258969)

I know Wiki ain't the last word, but according to them, GF also fabs for Qualcomm and Broadcomm as well.

amd usefulness (1)

Anonymous Coward | more than 2 years ago | (#39258039)

The e-350 was a very nice chip. Low power, but I could run vm ware under windows so I could run linux on a vm under win7 and still have 6- 8 hours of battery life in a 3.x lb laptop. AFAIK, atom cpus don't have hardware vm support or 64 bit support. While this summer's intel cpus will probably do better, I needed that last year, not this year. Sure, it'll play old games, but more importantly, it supported vmware, could be light, and had good battery life.

Just give it time (0)

Anonymous Coward | more than 2 years ago | (#39258303)

A lot of people on this thread seem to take it for granted that the spin-off was a bad move. The fact is that only time will tell. Just because independent foundries in the past could not manufacture cutting-edge CPU's does not mean that it cannot be done. One thing we know from history is that this industry is never static (eg. at one time no one thought a fabless company would become so big, but now look at ARM).

GloFo has had its share of problems - as an independent foundry they are very young. But a lot of other fabless companies are rooting for them to succeed just so there is a cutting-edge or latest tech-node foundry option in the market. Intel may not be a direct competitor for the foundries but through AMD they are still a big competitor. If the foundries cannot compete with Intel then AMD falls. If that happens, the collective foundry industry loses a huge client. And one that can give them the high margin leading-edge business. Worldwide foundry capacity has increased rapidly (and is still increasing), and the capacity calculations obviously include AMD as a client. Everybody foundry company knows what is at stake. If they fail in competing with Intel, Intel will lap up the 'AMD vaccuum'. Trailing-edge mobile chips or console CPUs alone won't fill up worldwide foundry capacity.

GloFo's Germany fab was AMD just a few years ago. They were manufacturing leading-edge then, and will look to do so in the future too. ARM's processors are catching up, and in a few years they will need latest node technology. So this whole argument of a business 'not being vertically integrated' cannot succeed is a bunch of crap. There is no one single good business model. Business models change all the time (e.g Netflix or Dell when they started). Who knows, in a few years TSMC or GloFo may be able to release latest technology at around the same time as Intel, or even earlier. Might not happen for the next 3 or 4 technology nodes, but it can happen. Good leadership at AMD and the foundries can still make this business model succeed. This is NOT the business model of the old (with foundries making mostly older generation nodes). When AMD spun out GloFo, everybody in the industry understood that.So all the people claiming that AMD going fabless was a bad move or that foundry model cannot work are honestly clueless. AMD did what it did to survive. Rest of the industry knows it has to adapt to account for this, and they are obviously trying. Let's just hope they succeed.

No foundries (1)

TheGoodNamesWereGone (1844118) | more than 2 years ago | (#39258865)

I'm not sure how you can be a chip manufacturer without any foundries or production facilities whatsoever, but I think I speak for everyone when I say, "Good luck, AMD!!"

Time will (in)tell. (0)

Anonymous Coward | more than 2 years ago | (#39259343)

One could argue that AMD's decision to get out of the foundry business is a logical extension of new-CEO Rory Read's plan to de-emphasize cutting-edge silicon in favor of SoCs. Time will tell.
Time will Intel. At least far as the CPU business is concerned. Of course in the long run, I suspect Intel will have to reimagine itself into something else, what with the expected convergence of processing, graphics and memory.

So, AMD no longer has production capacity? (1)

EmagGeek (574360) | more than 2 years ago | (#39259693)

Is my understanding of this correct? I think that's a really bad move. When you have to rely on someone else to manufacture your product, only bad things can happen. When it's something as complex as a CPU, the risk shoots up several orders of magnitude.

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