Saturday, February 23rd 2008

AMD Considering Outsourcing Chip Manufacturing

The title says it all. Chinese magazine Bloomberg recently discovered plans of AMD to outsource chip manufacturing. Most likely, this move would be done to reduce capital expenditure. AMD has already been testing outsourcing with IBM, and is now ready to go all the way. This is all part of a strategy Hector Ruiz likes to call "asset light". Nobody on earth other than Ruiz seems to know what, exactly, asset light is, and Ruiz refuses to elaborate upon it at this point.Source: The Inquirer
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25 Comments on AMD Considering Outsourcing Chip Manufacturing

#1
Sh00t1st
im almost starting to think amd bought ati soley to switch over to graphics, seeing as intel has dominance by brand name from the get go, and amd just dropped the ball pretty bad,they just allowed things to stagnate and didnt seem to care much. so maybe there switching to graphics because they can sort of compete against nvidia if they focus entirely on that who knows though.
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#2
ShadowFold
by: spootity
im almost starting to think amd bought ati soley to switch over to graphics, seeing as intel has dominance by brand name from the get go, and amd just dropped the ball pretty bad,they just allowed things to stagnate and didnt seem to care much. so maybe there switching to graphics because they can sort of compete against nvidia if they focus entirely on that who knows though.
I hope AMD just focus on Graphics cause imagine what they could do.
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#3
brian.ca
Isn't that what ATI already does for their GPU chips (as well as Nvidia)? Thought I read one company, TSMC or something like that, already does all the manufacturing for both gpu companies. I always assumed asset light meant they would scale back on their pysical assets (ex: chip manufacturing plants) to cut on costs. Elminating having to manage that side of production, possibly to allow more focus on the design / engineering side.
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#4
eidairaman1
Ruiz needs to be thrown out along with the CFO and CTO
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#5
beyond_amusia
By letting IBM make the chips, they'll have more money for research.
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#6
btarunr
Editor & Senior Moderator
"Real men have fabs" .....yeah right.

Doesn't AMD already have several fab partners that are working on Barcelona production? It's actually good that they outsource the manufacturing. A lot of companies (incl. NVidia) are fab-less and have come up in a big way, Nothing wrong for AMD, especially they save on possible expenditure each time they make a fab-shrink. The two companies, Intel and AMD are making it an annual affair, of shrinking the fabrication process of their chips.
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#7
eidairaman1
Problem is with that quote is Ati VPUs are made by TMSC which makes Nvidia GPUs aswell.

by: btarunr
"Real men have fabs" .....yeah right.

Doesn't AMD already have several fab partners that are working on Barcelona production? It's actually good that they outsource the manufacturing. A lot of companies (incl. NVidia) are fab-less and have come up in a big way, Nothing wrong for AMD, especially they save on possible expenditure each time they make a fab-shrink. The two companies, Intel and AMD are making it an annual affair, of shrinking the fabrication process of their chips.
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#8
jbunch07
by: beyond_amusia
By letting IBM make the chips, they'll have more money for research.
i agree thats one of the probs with AMD/ATI now....they dont have enough money to do r&d, thats y the drivers usually come out a little behind
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#9
btarunr
Editor & Senior Moderator
by: eidairaman1
Problem is with that quote is Ati VPUs are made by TMSC which makes Nvidia GPUs aswell.
That shouldn't be a problem, companies like TSMC manufacture for several competing companies. Think Foxconn.
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#10
imperialreign
by: jbunch07
i agree thats one of the probs with AMD/ATI now....they dont have enough money to do r&d, thats y the drivers usually come out a little behind
I agree that they don't have enough resources for truly innovative research like what AMD has done in the past - although the ATI branch seems to still be on par, albeit somewhat suffering also. Their drivers, on the other hand, are generally up to snuff - we know round abouts when they'll be released, and the almost always offer improvements for newer hardware, as well as clean up issues with older hardware; they're solid, dependable and stable. The only time we ever see public beta drivers is when there is some issue they're working hard to address before alpha release. IMO, ATI has the best driver methodology in the industry - if only the other 99% of hardware manufacturers could follow their lead.


Asides, though, I'm glad to see AMD outsourcing as a means of keeping their resources up - but hopefully, though, they won't outsource to somewhere that could potentially hurt them in the long run with higher RMA and device failure rates *cough*taiwan*cough*
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#11
TooFast
by: spootity
im almost starting to think amd bought ati soley to switch over to graphics, seeing as intel has dominance by brand name from the get go, and amd just dropped the ball pretty bad,they just allowed things to stagnate and didnt seem to care much. so maybe there switching to graphics because they can sort of compete against nvidia if they focus entirely on that who knows though.
Yes,yes!!!!!! graphics all the way, take nvidia down for good!
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#12
eidairaman1
the only major problem they are having is AGP support but they state to release AGP drivers every 3 months, but if this continues they should just announce a final driver for the 9500-3K series and just call it quits. Because its hard for me to run anything with my rig with the driver having incompatibility.
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#13
jbunch07
by: imperialreign
I agree that they don't have enough resources for truly innovative research like what AMD has done in the past - although the ATI branch seems to still be on par, albeit somewhat suffering also. Their drivers, on the other hand, are generally up to snuff - we know round abouts when they'll be released, and the almost always offer improvements for newer hardware, as well as clean up issues with older hardware; they're solid, dependable and stable. The only time we ever see public beta drivers is when there is some issue they're working hard to address before alpha release. IMO, ATI has the best driver methodology in the industry - if only the other 99% of hardware manufacturers could follow their lead.


Asides, though, I'm glad to see AMD outsourcing as a means of keeping their resources up - but hopefully, though, they won't outsource to somewhere that could potentially hurt them in the long run with higher RMA and device failure rates *cough*taiwan*cough*
haha i hear you on that one, but i def agree with what you said about drivers, they def have the most stable driver, my nvidia drivers always fail! one of the key reason is decided to build a spider platform!
:respect: AMD/ATI
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#14
jbunch07
by: TooFast
Yes,yes!!!!!! graphics all the way, take nvidia down for good!
that would be cool but i still like amd cpus
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#15
Darknova
"Asset Light" means that the company owns very few assets, so had much lower overhead costs as it doesn't need to pay taxes, running costs, etc. on the fabs. The downside of course, is whoever you outsource to has to run it and pay for it, so if they go down you can lose a major part of your business, but most have a contingency plan to buy back the assets if that ever does happen.

Anyway, OT, I think it's a really good idea for AMD to do this, they need to drastically reduce their outgoings so they can pour all that money back into R&D.
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#16
jbunch07
by: Darknova
"Asset Light" means that the company owns very few assets, so had much lower overhead costs as it doesn't need to pay taxes, running costs, etc. on the fabs. The downside of course, is whoever you outsource to has to run it and pay for it, so if they go down you can lose a major part of your business, but most have a contingency plan to buy back the assets if that ever does happen.

Anyway, OT, I think it's a really good idea for AMD to do this, they need to drastically reduce their outgoings so they can pour all that money back into R&D.
agree
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#17

Personali I don't like this Ruiz Gay!
I read it somewhere that AMD in first place doesn't wanted to By ATI they wanted to merger with Nvidia!
That was before the Core2 era of CPUs so they had the money (and they don't needed so much of it either because they wanted to merger not to buy out Nvidia) and The two company's merger failed because Hector and Nvidia CEO Jen-Hsun Huang couldn't settle who stayed in charge after the merger!
So if Ruiz wasn't so power hungry we would have big differences in strength out there!
If I have a the source of this inf I will link it!
:pimp:
#18
candle_86
best option is for Nvidia to buy AMD gain there fabs, and sell ATI off to the highest bidder, VIA for instance.
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#19
WarEagleAU
Bird of Prey
wrong option.

this is good news. Companies outsource all the time. If AMD Maintains their fabs and has others helping them, they can get more chips out there, and also have more for R&D
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#20
jbunch07
by: WarEagleAU
wrong option.

this is good news. Companies outsource all the time. If AMD Maintains their fabs and has others helping them, they can get more chips out there, and also have more for R&D
this is just what AMD needs to do!
this would help them out in so many ways! mainly they would have more time and money for r&d
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#21
ChillyMyst
WarEableAU thats exectly what i understand they are doing, it costs ALOT to build fabs, or buy then reoutfit them, why do that when IBM would beable to make your chips for you that your not able to make yourself due to capacity?

nowhere did i see them say they where selling their fabs, maby i missed it, i only skimed the artical.

google is wonderfull thing

http://www.techspot.com/news/25816-AMD-denies-rumors-of-selling-fab-plants.html

http://news.softpedia.com/news/AMD-Denies-Selling-its-Fabs-57990.shtml

think what this is leading to is amd not building any more fabs and maby moving the gpu production in house insted of outsorcing it, that would probbly speed up dev and testing of new designs i would think :)
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#23
ChillyMyst
as i say over and over(and at times forget myself....) google is your friend :P
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#24
jbunch07
google IS my friend!
i love it
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#25
AddSub
VIA for instance
VIA can't afford a bowl of hot soup at this point. AMD is here to stay, no matter how bad the financial situation gets for them there will always be a powerful Chinese or Middle Eastern investor standing by to bail them out, and the recent last minute splurge of foreign investment into various North American based bank/credit corporations is a pretty solid indicator of that. Welcome to the global economy.
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