The Foundry Company to Make GPUs, To Accept Designs from Other Manufacturers Soon

[btarunr]

At the AMD Analyst Day event, AMD indicated in its presentations that The Foundry Company, a manufacturing company formed from the assets of AMD with the intestments of ATIC under the AssetSmart program, would in the future become an independent foundry company accepting foundry partnerships from companies apart from its one largest customer, AMD. The move would keep the newly formed company profitable and competitive with other Asian foundry companies.

In the same presentation, AMD also indicated that eventually it would assign manufacturing of its ATI Radeon GPUs and chipsets, to The Foundry Company (TFC). Currently GPUs and chipsets are being manufacuted by foundry companies such as TSMC and UMC in Taiwan. This move would send a significant chunk of manufacturing to TFC. Sources tell ATI Forum.de that at FAB38 Dresden, a major manufacturing facility, installations of the 40nm bulk manufacturing node is in full-swing (not to be confused with 45nm SOI, on which K10.5 processors are built). Also there are indications of the facility accepting orders for manufacturing chips on the new node from other fab-less companies, an attempt to bring in profitability right from the start.



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[locoty]

i hope this will make the GPU price, especially ATI, much cheaper in the future

 

[1Kurgan1]

I'm sure it would even though ATI GPU's at this point in time are pretty reasonable since they found a good way to scale the cards instead of using garbage GPU's in the lower end of the top cards.

 

[Hayder_Master]

dumm ,32NM

 

[suraswami]

If I am not wrong this is how AMD was operating in its initial days and was manufacturing for Intel before producing its own CPUs. I hope this will bring more money into the company.

 

[From_Nowhere]

So this means cheaper (soon they'll be giving 'em away for free) AMD products in the future?

 

[DarkMatter]

I don't see how this can make AMD products cheaper or much cheaper than before. Those fabs were owned by AMD prior to the creation of TFC. How can outsourcing to that newly created company make your products cheaper than when you owned the fabs??

Maybe once/if many other companies use TFC to create their chips, the manufacturing costs would go down and TFC could ask AMD less money than what costed AMD to manufacture when the fabs were theirs, but until then costs (and thus prices) are probably going to be slightly higher. That unless AMD was very bad, and I mean VERY BAD, managing their resources (I don't think so).

 

[Haytch]

I don't see how this can make AMD products cheaper or much cheaper than before. Those fabs were owned by AMD prior to the creation of TFC. How can outsourcing to that newly created company make your products cheaper than when you owned the fabs??

I think AMD/ATi have already arranged their cheaper costs. It may have something to do with dragging others to use TFC too. Time will tell.

AMD/ATi just layed off 600 workers, instead of the forecasted 500. They will need the lower costs in 2009 to make up for the extra 20 million they spent restructuring for Q4 and 2009.

 

[TheMailMan78]

This is great news. AMD is expecting expansion of their company and market. You don't open the doors to a new foundry without some expected growth. I got a letter about this about a week ago but I didn't think much of it. It didn't say what the foundry would be doing until now. I doubt it will effect price but it does show AMD is branching out. Good news for my stocks FYI 600 people seems like a lot but that could be just one distribution center. In a company the size of AMD 600 employees is not that big of a deal.

I wonder when the last time Intel opened a foundry? Does anyone know?

 

[btarunr]

I wonder when the last time Intel opened a foundry? Does anyone know?

Intel has one of the largest semiconductor facilities known to man in Costa Rica.

 

[TheMailMan78]

Intel has one of the largest semiconductor facilities known to man in Costa Rica.

I understand that but have they expanded lately? I know their bigger However have they had any growth?

FYI I'v been to Costa Rica. Beautiful place. I wonder if Intel needs an artist down there.

 

[DarkMatter]

I think AMD/ATi have already arranged their cheaper costs. It may have something to do with dragging others to use TFC too. Time will tell.

Yeah I meant that. In the long run outsourcing to TFC can be cheaper if TFC can manage to get a lot of customers and TFC gives AMD an special treatment. AKA most of AMD manufacturing is "paid" by the others (though I don't know if that would be seen right by other customers, TFC could see it forced to give all it's customers, including AMD, the same deals). But that won't happen until they have enough customers. If anything the costs of running an aditional company would make chips a little bit more expensive.

FYI 600 people seems like a lot but that could be just one distribution center. In a company the size of AMD 600 employees is not that big of a deal.

Define "not that big of a deal". 600 out of ~15.000 is 4% of it's total workforce. I would say it's significant. And 1500 more on January might make Haytch's statement very true.

IMO AMD is not that big BTW, I have worked for local (AKA not even whole country-scale) companies twice as big. That's something that really surprised me the first time I readed about it, the low ammount of people working for semiconductor companies. I expected hundreds of thousands. Nvidia is at like 6000 I think?

I wonder when the last time Intel opened a foundry? Does anyone know?

Well they are constantly improving the fabs they own. So even if they don't buid new fabs, (they did it not too long ago anyway) I would say they are constantly growing. It's not as if they needed more fabs...

EDIT: I decided to bother doing a quick search in Google: http://www.chiplist.com/Intel_Starts_Building_of_New_Fab_in_China/tree3f-article--64-/

I didn't even knew about that. You see, they are doing new fabs. I trully didn't think they needed.

 

[TheMailMan78]

But that won't happen until they have enough customers. If anything the costs of running an aditional company would make chips a little bit more expensive.

Unless the Phenom II blows away the i7 they would be foolish to do any kind of market increase. AMDs only real advantage currently is their price/performance ratio. The current product doesn't warrant a price increase. Investors know this and know they will take an early "loss" on their investment. However down the line much more money can/will be made. This is a long term investment. Not something that can be paid for by a minor increase of profit and loss of a market advantage.

Define "not that big of a deal". 600 out of ~15.000 is 4% of it's total workforce. I would say it's significant. And 1500 more on January might make Haytch's statement very true.

Big deal would not be paying the remaining employees and being subject to a hostel take over. That 4% layoff just paid for the rest of the companies security and the future of its economy. Its called "trimming the fat".

 

[DarkMatter]

So it's going to be the best option in the long term, but will nonetheless hurt the profits in 2009. That's what we said, we didnt discuss if it was a good strategic move or not.

And that's also true for the foundry company although in this case it is indeed going to take out some losses from AMD and that will make AMD stockholders happy in a time when probably are not compfortable. TFC will take the losses instead, but they will recover them in the future. At least that's their hope (I don't see why they wouldn't succed, but anything can happen) and in any case if TFC fails for any reason AMD would be safe.

 

[PCpraiser100]

Now this is great news for AMD. I am starting to get excited about seeing high-end GPUs decrease in price.

 

[LittleLizard]

i dont care if the foundry makes or not gpu. i only want that amd live so intel keeps working on making good chips and not like netburst