DAAMIT reckons manufacturing is going according to plan

THE CONGLOMERATE of DAAMIT is telling the world that its manufacturing processes are all going according to plan, and that there will be no delays to any of its upcoming product lines. Honest. Despite what anyone tells you.

Speaking to analysts and investors, Tom Sonderman, who heads up manufacturing technology for the firm, said that it was on course to transition entirely to 65nm by the end of the year, and to start manufacturing on 45nm by the middle of next year.

This, he said, would mean that manufacturing would keep pace with Intel (although Intel transitioned to 65nm last year). Sonderman claimed that the delays in moving fully to 65nm were deliberate, and were part of DAAMIT's strategy for 'elegant efficiency', which means utilising existing process technology to its full before making additional investments.

This, roughly translated, means bleeding 90nm dry because there isn't enough cash to properly equip 65nm labs yet, we suspect. The lack of cash at the firm (caused by heavy Q1 losses through price cuts) has hurt its potential manufacturing capacity, and the problem has been exacerbated by the fact that Dell is demanding so many chips there aren't enough to be shipped out to retail, alienating traditional AMD customers like system builders and enthusiast DIY-ers.

Native quad-core server chip Barcelona will be produced, in volume, on 65nm by the middle of this year, Sonderman said. Since this is merely weeks away, it seems optimistic, given that AMD currently only has a single 65nm fab online. The second won't be ready until Q4, according to recent estimates from the company.

Meanwhile, as AMD ramps up 65nm production, Intel will be launching 45nm Penryn by the end of Q3. AMD claims that it is on track to launch 45nm processors by the middle of 2008, fully nine months later than Intel at the very least. This means that AMD will have merely a year with 65nm as its high-end production line, consequently, the technology could be phased down very quickly. Alternatively, it could mean that 45nm technology will be delayed as the company struggles to transition fabs for the second time in 12 months, leaving 65nm as the high end for more like 18 months. I know which bet my money's on.

Whilst AMD execs like Sonderman may claim that manufacturing is going exactly according to plan, every other aspect of the business suggests otherwise. Just yesterday, ATI announced that it will be continuing its contract with TSMC to produce graphics chips, and 65nm chips will be produced in factories in the Far East throughout this year. These chips were already supposed to be shipping in the form of the Radeon HD 2900 XTX, but manufacturing has again not worked out according to plan and the launch of such chips has been delayed, then delayed again.

DAAMIT must have been planning to consolidate GPU manufacturing in AMD fabs - after all, that's one of the big cost savings the pair could make to justify their business partnership, and preparations need to be put in place for GPU/CPU Fusion - but the renewal of the contract with TSMC suggests that this isn't going to be happening any time soon.

As Han Solo would say: "We're fine, we're all fine, here, now, thank you. How are you?" µ