AMD Talks About Current Business Strategy

Earlier this month, Intel's archrival, Advanced Micro, announced that it was spinning off its manufacturing facilities into a new company called The Foundry Company, which would be meant to manufacture the chips designed by the mother company, AMD. The decision was part of a business strategy meant to allow the chipmaker to reduce some of the debt load it had accumulated, and bring the company back on a profit making track. Recently, AMD has announced its Q3 earnings, which were surprisingly good, despite initial predictions, while also talking more about reducing its participation in the newly founded Foundry Company.

 

Currently, AMD owns approximately 44 percent in the new manufacturing venture, while the other 56 percent is owned by Advanced Technology Investment Co. (ATIC). However, it is said that Micro Devices is planning an exit strategy for the foundry side of the business, a move discussed the company’s Chief Financial Officer Bob Rivet, during a conference call. Apparently, AMD will “turn in more shares and ownership of the (manufacturing) company” if necessary.

 

According to Rivet, the foundry deal stipulates that “when a capital call is required for the foundry business, it allows us to either pay our fair share of that capital call or turn in more shares and ownership of the company... We'll make that determination at each point in time... There's a natural way to get out of it if we want to.”

 

In addition to discussing the exit strategy for the foundry company, Bob Rivet and AMD's CEO Dirk Meyer have also detailed the company's conversion to 45nm manufacturing technology. “We'll be fully converted in first half of next year,” Meyer said.

 

Also, Meyer addressed a question regarding AMD's strategy regarding the new netbook market, saying, “Clearly the Netbook is a new form factor and new market opportunity and one we're not participating in right now, today.”