- Sunday, 15 November 2009
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Talk of virtue and your readers will become bored. Hint of gossip and you will secure perfect attention - Walter Winchell
AMD finally goes fabless
REMEMBER WHEN WE said AMD was going to split into a fab company and design company? Word has it that it will be announced in a few hours, likely before the opening bell tomorrow.
The story is basically what we first told you about in March, Arab, likely Abu Dhabi money will finance the split. The overview is remarkably simple, there will be two companies, basically a foundry and a design house. The deal is greased by billions of dollars, the number we hear is more than one, less than ten, all from bartered SUV go juice.
The OOo Impress version is quite simple, but the deal is likely shatteringly complex, which explains the year plus gestation, and why it took six months after we heard it was basically done. There are a lot of bits to tie up, and a lot of moneyed and politically connected asses to kiss. Better phrase that as egos to stroke while placating fears.
If you think AMD isn't worth it as a company, you are likely right. If you think of this as a strategic investment to put an entire country at the cutting if not bleeding edge of semiconductors, it is very worth it. There are 1.5 companies that can do semis on this level, Intel and sorta Samsung. Tier two has 2.5 players, Samsung, AMD and TSMC. To put it another way, China invested more in the Olympics, and what are they left with?
In any case, we are assured that finance isn't a problem for this deal. If it is done with oil money, that would be a no-brainer, and stock price is not a problem at this time. Basically it was done and all but dusted months ago, and now the loose ends are tied up.
That said, there are still going to be tons of questions when it is outed tomorrow morning, most will likely go unanswered during the announcements and subsequent questions. How will this affect the 20 per cent deal with Intel. Will AMD Design own the majority of AMD fab? Will Luther Park happen? Will Lassie warn Mom of the danger Timmy is in? Is there any government regulation that will need explaining? Will Wall Street even notice? Will SOI be out the door? How long will it take Nvidia to come a'grovelin? Will IBM and Chartered and Samsung and... like I said, questions.
In the end, we told you so. Six months ago. Nothing has changed except the seasons. ยต
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What happens to the x86 license?
wow that charlie really loves to say "i told you so"
Big Money to Rescue? Timmy Goes Dickens? Shanghai'd?

This sounds like defining of Duties to elaborate Greater effiecentcies. Not Two Seperate Corporate Entities or it is split, as Permissions was mentioned, How About Administrative Rights to Split Notchie in Half? Instead what if AMD Reverse Stock Split, Now its so Cheap? for every 5 shares out there, give blokes One Share Back @ $20, with Shangie Doing Soon Pushup., Instant Profit, thats what Guests Get.
drashek
Seems like AMD's trying to cheat death one more time, and Intel will hopefully wise enough to net let them succeed.
Surely IBM fits in to your two tiered scheme somehow?
Just goes to show that is the Inquirer posted it, it's true.
you also told me google is gonna buy valve... still waiting for that to happen though. hehe.
There are several companies in the last 10 years had gone from end-to-end business, to spinning off the manufacturing to make it more competitive.

Acer spin off the manufacturing (Winstron) to concentrate on brand marketing, D-Link spin off its manufacturing (Alpha Networks), Asus also spin off its manufacturing (Unihan).

Dell is also looking for a buyer for its manufacturing business. Once you remove the large overhead of manufacturing, competing head on will be easier, unless the management makes an unrepairable mistake.
You could look at this another way. As a design firm, or foundry, AMD would be open to designing or manufactoring as an independant company/s. So if AMD's processors are floundering they can bring in source work. Alternately they can provide outside design services. It would also allow those portions of the company to focus both resources and technologies on their specific expertise, and negate some standing time as one portion of the company waits for other to catch up. Of course it may be just a way to justify that type of work to share holders. I await the thoughts of those involved.
I think it is good that AMD may split into a foundary company and a design house.

the foundary part will make it easier for fabless companies to get to market...VIA Isiah anyone?
AMD keeps a 44% stake in the new foundry company and a 50.1% decision making stake affectively meaning its still a AMD company.

and intel does NOT want AMD to go under. it would have every anti-trust watchdog in the world springing on its nek minutes after that would happen and thats the last thing any company wants.
and in 2011 when the x86 license is up for renegotiation, and AMD has a strong negotiating position because of the anti-trust lawsuits already running against intel. that part of the agreement will likely be scrapt entirely.