After a bad 2008, AMD tries to reinvent itself

Logo AMDNext year will be critical for Advanced Micro Devices, as the chip company pursues two major initiatives designed to reverse its financial losses and compete better with industry leader Intel.

To narrow losses, AMD this year cut staff and divested its digital TV assets to focus on profitable markets, including the graphics space through its ATI acquisition in 2006. It also announced that it would spin off its manufacturing assets to become a fabless company and appointed Dirk Meyer as CEO to revitalize the company's efforts to become more competitive in the microprocessor market.

However, the company earlier this month dropped its fourth-quarter revenue expectations, citing weaker-than-expected global demand for its products, especially in the consumer space. It joined other chip companies struggling due to a slowdown in PC demand and constrained budgets, including rival chipmakers Intel and Texas Instruments.

AMD in October announced that it would focus on chip design and spin off its chip manufacturing operations to a new company temporarily called The Foundry Co. The original plan called for AMD to have a 44.4 percent stake in the new company, with the rest owned by Advanced Technology Investment Company (ATIC), a fund owned by the Abu Dhabi government. Terms of the agreement were renegotiated last week, dropping AMD's ownership to a 34.2 percent stake, with the rest going to ATIC. In addition, another Abu Dhabi fund, Mubadala Development Company, will pay less for its stake in AMD than originally agreed upon, according to the renegotiated terms.

Spinning off the fabs helps AMD reduce expenditure and concentrate on chip design to deliver products competitive with Intel's offerings. It also helps AMD unload debt of $1.2 billion, which will be assumed by the spin-off. The deal, which closes early next year, will also send AMD's two fabrication facilities in Dresden, Germany, to the new company.

However, spinning off the fabs into a separate company has its risks. AMD could lose its independence in chip development, as it will have no fab to test and fine-tune processors while adding more features to smaller chips.

That could put AMD at a disadvantage over Intel, which owns fabs and is a generation ahead in manufacturing technology, said Jack Gold, principal analyst at J. Gold Associates. Intel launched chips manufactured using the 45-nanometer process in 2007, close to a year ahead of AMD's first offering of chips manufactured using the 45-nm process.

AMD can hope for a quick recovery of the PC market and keep its chip road map afloat next year to remain competitive with Intel, Gold said. It will also need to overcome design challenges by coordinating its chip design efforts with the company manufacturing the chips.

The Foundry Co. may initially focus manufacturing efforts on AMD's chips, but it may not remain exclusive as the spin-off tries to expand its market presence. "Changing a fab is a long and expensive process, so it won't happen overnight," Gold said.

Source: InfoWorld

Tags: AMD, ATI, CPUs, GPU, Intel

Add comment

Your name:
Sign in with:
Your comment:

Enter code:

E-mail (not required)
E-mail will not be disclosed to the third party

Last news

A mobile hotspot in Australia will be capable of hitting gigabit speeds on the go
A new game could be in the works as Blizzard appears to have been hiring for a Diablo-related project
Nokia CEO Rajeev Suri will speak at MWC 2017
However what if you could go way, way back?
The Helio P15 packs an octa-core Cortex-A53 processor clocked at 2.2GHz
Samsung claims up to 27-percent higher performance or 40-percent lower power
Preliminary data for October shows another Windows 10 boom
Samsung Galaxy TabPro S - a tablet with the Windows-keyboard
The first Windows-tablet with the 12-inch display Super AMOLED
June 7, 2016 /
Keyboards for iOS
Ten iOS keyboards review
July 18, 2015 /
Samsung E1200 Mobile Phone Review
A cheap phone with a good screen
March 8, 2015 / 4
Creative Sound Blaster Z sound card review
Good sound for those who are not satisfied with the onboard solution
September 25, 2014 / 2
Samsung Galaxy Gear: Smartwatch at High Price
The first smartwatch from Samsung - almost a smartphone with a small body
December 19, 2013 /
HP Slate 7 is a 7-inch Android 4 Tablet PC with good sound
A cost-effective, 7-inch tablet PC from a renowned manufacturer
October 25, 2013 / 4

News Archive



Do you use microSD card with your phone?
or leave your own version in comments