Analysts weigh in on AMD split

WE ASKED SOME analysts and industry insiders for their reaction to news of the AMD split and here is a very quick look at some of what they had to say.

David Kanter from Real World technologies: “AMD's move to separate manufacturing and design is not 'bad' per se… Fundamentally, this was a change that needed to happen, since AMD's business model and current state cannot support capital intense activities like building a new fab every year”. Referring to the newly formed Foundry Company, he added, "I'm sort of baffled they didn't come up with a better name though".

Mercury Research’s Dean McCarron noted: It is entirely possible that Nvidia might look into getting chips made at The Foundry inc. We will have to wait and see how much capacity is available and what it costs, But I would imagine that a number of companies would consider using them.

Nathan Brookwood from Insight 64 commented on the oil money being funneled into AMD by the Abu Dhabi investment funds noting, “Willie Horton once said he robbed banks because 'that’s where the money is'. Today the Arabs have a lot of money to invest, thanks to the US's dysfunctional energy policy. They can afford to be 'patient investors', and don’t need to worry about AMD’s Q4 results. I wonder if I could talk them into taking an equity position in Insight 64.”

Martin Reynolds from the Gartner Group noted it was unlikely any of the technology would find its way to Abu Dhabi right away, however, “In the long term we could see Abu Dhabi building a fab in the Middle East. But its unlikely because fabs tend to go where governments give tax breaks”.

Jon Peddie noted the move gave AMD “breathing room, an opportunity to get back to profitability, and a stable, reliable fab to use” and added that in Mubadala, AMD had found a “patient investor with long–term commitments and horizons” noting, “I don’t think they (AMD) could have picked a better partner or investor”.

Intel’s spokesperson, Chuck Malloy said Chipzilla was still “evaluating the competitive landscape” after the announcement, but added, “We have always believed that tightly-integrated teams of product designers and manufacturing engineers brings tremendous benefits to our customers. For decades we have been successful because we are an integrated device manufacturer.”

Nvidia Spinner Luciano Alibrandi told the INQ “We don’t think this will affect our strategic direction at all. We’re still investing heavily in R&D so that GPUs can be far more than “just graphics”. We’re the only Graphics+ company, we’re the only company focused on bringing the benefits of GPU computing to consumers, we’re the only company that enables gamers to see physics accelerated in games, we’re the only company that lets gamers enjoy over 350 games in 3D right out of the box.” µ