Analysts praise AMD's move to spin off its fab operations

The industry will be dealing with an AMD that's a good deal more nimble.

Advanced Micro Devices's move to spin off its manufacturing operations generated praise from analysts and questions from Intel about whether it violates a cross-licensing agreement between the two companies.

Sunnyvale, Calif.-based AMD last week announced it is spinning off its fabrication operations into a new firm, temporarily called The Foundry, to cut costs and gain an infusion of capital.

Advanced Technology Investment (ATIC), based in Abu Dhabi, United Arab Emirates, paid US$2.1 billion for a majority stake in the new firm. Co-owner AMD will retain a 44.4 percent stake.

ATIC, wholly owned by the Abu Dhabi government, will spend between US$3.6 billion and $6 billion over the next five years to expand the firm's chip-making capacity, said Doug Grose, CEO of The Foundry. Grose had been senior vice president of manufacturing and supply chain management at AMD.

Meanwhile, Intel said it plans to evaluate the terms of the AMD-ATIC agreement to determine how the deal would affect the licensing pact, which, among other things, lets AMD use Intel's x86 processor architecture.

An AMD spokesman said the company structured the spin-off "in a way that takes into account all our licensing agreements to ensure The Foundry will be able to manufacture all of AMD's products."

Despite the potential licensing problem, analysts said the deal could rejuvenate AMD after two years of struggles. "

The industry will be dealing with an AMD that's a good deal more nimble, because they won't be dealing with the same financial burdens or the fab plants," said Dean McCarron, president of Mercury Research in Cave Creek, Arizona.

Early in the decade, AMD had grabbed a solid footing in the market, and analysts cited its success as a reason Intel floundered between 2003 and 2005.

Intel responded in 2006 with a reorganization that curbed AMD's momentum. After that, AMD stumbled further under the weight of its US$5.4 billion purchase of ATI Technologies and its delayed Barcelona chip.

In July, after AMD's seventh straight quarterly loss, Dirk Meyer replaced Hector Ruiz as CEO. Ruiz last week was named chairman of The Foundry.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags AMD

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.
Sharon Gaudin

Sharon Gaudin

Computerworld
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?