AMD Scaling Back Chip Purchases from GlobalFoundries

Status
Not open for further replies.

A Bad Day

Distinguished
Nov 25, 2011
2,256
0
19,790
2
"AMD will make a termination payment of $320 million related to the take-or-pay agreement with Globalfoundries associated with the adjusted wafer purchase commitments in fourth quarter 2012," the company said.

Ouchy for a faltering company...
 

DRosencraft

Distinguished
Aug 26, 2011
743
0
19,010
6
Logical step not to buy large quantities of a product you can't manufacture and then sell. If you're not gonna sell as much processors, then no need for all those wafers sitting around. The concern is, what makes this worrying, is the image it sends that AMD is weak and isn't expecting to make any waves next year with any new products. Or from another more optimistic perspective they could be setting themselves up for trouble of supply shortages if they do make a strong come back. AMD is in so much flux right now, but at least they still have some cash reserves and a forthcoming return to profitability in the not too distant future.
 

A Bad Day

Distinguished
Nov 25, 2011
2,256
0
19,790
2
[citation][nom]abbadon_34[/nom]They should have cut the prices across the board on all cpu to make them value competative, they could own the first or second SMB if the price was right[/citation]

It would be stupid to engage in a price war against Intel, who has a much larger cash reserve and better fab plants. They can produce processors at lower profit margins because the manufacturing cost per processor is less than AMD's suppliers.
 

jaber2

Distinguished
Jan 21, 2012
702
0
18,990
3
Why didn't AMD do like intel and fab own waffers? you'd think they would have better control over engineering and quality, the best thing AMD can do now is spend its energy on the expanding smart phone and tablet market, which Intel just decided to get into
 
[citation][nom]jaber2[/nom]Why didn't AMD do like intel and fab own waffers? you'd think they would have better control over engineering and quality, the best thing AMD can do now is spend its energy on the expanding smart phone and tablet market, which Intel just decided to get into[/citation]
Global Foundries is their old fab but it was getting too much downtime due to low sales so they decided to spin it off so if GF was losing money, it wouldn't effect AMD. What AMD should have done was to fab for other companies to make up the shortfall and not expand the fabs. That way they can keep more of the profit margin in house. Something that sort of make sense back then is coming back to bite them a new one.
 

matt_b

Distinguished
Jan 8, 2009
653
0
19,010
11
[citation][nom]Stickmansam[/nom]GLobal Foundries is their old fab but it was getting too much downtime due to low sales so they decided to spin it off so if GF was losing money, it wouldn't effect AMD. What AMD should have done was to fab for other companies to make up the shortfall and not expand the fabs. That way they can keep more of the profit margin in house. Something that sort of make sense back then is coming back to bite them a new one.[/citation]
You know, I thought the same thing. Of course I am not an insider to AMD to know what all went on, but common sense would say that if you have idle time, down time, or just plain under-utilization, then you try to contract out with other suppliers/businesses to become customers and put a margin of profit back in your pocket. Not only does this give the opportunity to diversify your income (you could be doing poorly while your other customer's demands for chip wafers is skyrocketing), but it also keeps overall quality at a higher level because you still retain production control of your product. It was a bad move back then I thought.
 

tomfreak

Distinguished
May 18, 2011
1,334
0
19,280
0
[citation][nom]A Bad Day[/nom]It would be stupid to engage in a price war against Intel, who has a much larger cash reserve and better fab plants. They can produce processors at lower profit margins because the manufacturing cost per processor is less than AMD's suppliers.[/citation]it would be stupid to buy a cpu that is not price competitive against Intel.

oh of cos I will get thumbdown for this as usual.
 
[citation][nom]Tomfreak[/nom]it would be stupid to buy a cpu that is not price competitive against Intel. oh of cos I will get thumbdown for this as usual.[/citation]
FX6300 is in fact price competitive against the i3 and the i5. It perfroms prertty much smack in between them for the most part and costs about the same as the most expensive i3, making it for the most part, a better bargain than the i3.
 

acadia11

Distinguished
Jan 31, 2010
899
0
18,980
0
[citation][nom]jaber2[/nom]Why didn't AMD do like intel and fab own waffers? you'd think they would have better control over engineering and quality, the best thing AMD can do now is spend its energy on the expanding smart phone and tablet market, which Intel just decided to get into[/citation]

They did actually, but creating a Fab cost a couple billion dollars each. They just don't have the cash that Intel has to do create Fabs , nor do they have the manufacturing know how to do the die shrinks as quickly as Intel does. Global Foundries is actually a spin off of AMD's FAB unit, they brought in partners, to purchase their FAB Business, but kept some stake, and then last year the decided to sell their stake all together. When the Athlon was hot and in the late 90's to mid-2000's , AMD was strong and hadthe cash to build fabs, they don't today.
 

acadia11

Distinguished
Jan 31, 2010
899
0
18,980
0
Also, each new die shrink requires a new fab or retrofitting an old fab to the new hardware, while Intel had a dozen or more fabs, retrofitting 1 to a new process, did not mean down time in production of older chips. On the other hand AMD had only 3 Fab 25, Fab 30, Fab 36 (and 38) (Fab 3x' really are 1 facility in Dresden) , Fab 25 was in Austin Tx. The Dresden facility is what became Global Foundaries. If anything went wrong in AMD's switch / die shrink it severely hampered production, Intel wasn't afflicted with the same issue, plus intel had the money, to do the retrofits and new fabs more often. Intel is the worlds #1 fab owner.
 

tomfreak

Distinguished
May 18, 2011
1,334
0
19,280
0
[citation][nom]Stickmansam[/nom]FX6300 is in fact price competitive against the i3 and the i5. It perfroms prertty much smack in between them for the most part and costs about the same as the most expensive i3, making it for the most part, a better bargain than the i3.[/citation]u forgot the performance is unreliable vs the Intel chip, FX CPU performance competitive multi-threaded only + higher power consumption + missing GPU. These are also part of the factors when u buy a CPU. u cant just compare price/performance at certain situation.
 

killerclick

Distinguished
Jan 13, 2010
1,563
0
19,790
2
I guess this is the right time to buy my last desktop CPU/MB, use it for the next 5 years, and then move on to whatever is the new thing, since desktops will become relics in that time. Apparently, too many people just need to take their computers to the toilet or to Starbucks or are simply homeless and can't use a powerful desktop.
 
This is good and bad for GloFlo.

The bad is more production likely moving to TSMC (and maybe, Samsung) over the next 12-18 months. The good is the research at 22nm and below on ET-SOI will likely be significant as the industry moves to optical interconnects on the CPU/APU die.

 

FSCx64

Honorable
Oct 30, 2012
11
0
10,510
0
AMD surely is sailing in a rough sea indeed.

Every time I hear something bad about AMD I just can't help thinking few years back, to PhenomII time to be exact. At that time AMD wasn't too behind 1st gen i-series. However Intel fanboys bashed AMD quite a lot hoping it would be gone within few years.

Here where I live price of 2500k and 3550k prices have gone up €50($70) since they were introduced.

Well.. welcome to the world of Intel. No AMD in high-end CPU. You got what you hoped for.
 

notsleep

Distinguished
Jan 19, 2010
219
0
18,680
0
i'm losing faith in amd cpus. they've royally messed up with bulldozer and now pile driver cpus. if steamroller don't put up a fight against haswell, then i think it's over for amd in the cpu market.

it's also worrying that there are bugs in games that doesn't exist on intel chips. like in the recent, cod ii black ops, your horse get stuck in the level if you had an amd cpu but it works fine if you have intel cpu. wtf? it makes amd cpu owners regret not owning an intel cpu. :(
 

JonnyDough

Distinguished
Feb 24, 2007
2,234
2
19,865
29
[citation][nom]A Bad Day[/nom]It would be stupid to engage in a price war against Intel, who has a much larger cash reserve and better fab plants. They can produce processors at lower profit margins because the manufacturing cost per processor is less than AMD's suppliers.[/citation]

Hardly. They've been competing with Intel since their company name first became known in the IT industry. That's like saying AMD shouldn't be competing with the likes of Qualcomm, IBM, NVidia, etc. AMD is a big company with lots of good IP. There are billions of microprocessors sold every year, and if they can capture a tiny portion of that marketshare they stand to make a lot of money. They may not be able to conquer a giant at this point in time, but that's not their aim. Their aim, as a business, is to make profit. They can still do that while competing with Intel. AMD may just have to focus more on niche products, custom chips, etc. That's what smaller businesses excel at when competing with larger giants.
 
Status
Not open for further replies.

ASK THE COMMUNITY