AMD to split into two companies

[Ancalagon]

AMD is splitting into two companies - one to design chips and one to carry out the debt-dependent business of actually making them.

Two Abu Dhabi investment firms will hand over at least $6bn to the two new firms and to build a new chip fab near Albany, New York and to refurbish one in Germany.

The chip-making business will be 44.4 per cent owned by AMD and is using the working title the Foundry Company. The rest of the firm will be owned by Advanced Technology Investment Company. ATIC was formed by the Abu Dhabi government and has equal voting rights with AMD.

The Foundry Company will make chips designed by AMD but will also manufacture for other companies.

Wow.... this is big. It probably had to be done, lets hope its for the best. Whatever your feelings about AMD, they have forced Nvidia to reduce prices, and forced Intel to design faster and more power efficient chips. If this keeps them in the game, then its a good thing.

Source: AMD to split into two companies (http://www.theregister.co.uk/2008/10/07/amd_spilts_two/)

[Raen]

Wow this is pretty huge. Makes a lot of sense from a financial perspective I guess, although I hope that offering chip fabrication services to others won't hurt the quantity of their own produced. I'm assuming from the article that the chips will still be branded AMD, so I guess it won't make much difference for us consumers.

[JediSanf]

This actually sounds pretty smart if their fabs aren't operating at capacity. Those extra contracts could really help. Plus, it makes AMD (the chip design company) look better on paper since their fab work will be "contracted out".

[bryan]

From my understanding at one stage they were under capacity and had trouble delivering chips to big players like Dell and that was a major stumble. Regardless spinning off their plants is a good move as they are such a huge capital expenditure.

[KingGorilla]

This makes sense, if AMD can make in roads like Intel, IBM, etc into making chips for things like mobile devices, there could be a cash cow for them. Sadly, I also see this as a last ditch effort as AMD has never been able to catch up on past glories, like their 40 percent consumer market share in the 90's. But as their major partners like HP and Asus push more product into the market, and as the ATI part keeps cranking out their chips(with help from NvIdia cards melting to cinders) they may come out ahead.

Keep in mind, also, ATI/AMD has a major stake in the console market with the WII and Xbox, the two top selling consoles. Each new Wii or Xbox is another new ATI graphics card sold.

[VerseD]

Good for AMD. This is sort of like expansion, right? My lack of understanding about economics is supreme.

[KingGorilla]

Actually this is downsizing. They are removing the fabrication portion of their business and outsourcing it.