AMD is splitting up!

[goog40]

So what's the outlook on this move? Seems like it should be a good thing, but I wonder how the stock prices are going to be affected by the announcement.

 

[91TTZ]

This isn't really bad news, it's a smart move. AMD probably currently has more manufacturing capacity than they're using, and they'd like to run their fabs at full capacity. Their competitors aren't going to ask them to build their chips for them, so it's in their best interest to spin off that operation. Now AMD can still design CPUs and their spun off manufacturing company can produce those CPUs as well as other companies' chips.

 

[BeauJangles]

Originally posted by: 91TTZ
This isn't really bad news, it's a smart move. AMD probably currently has more manufacturing capacity than they're using, and they'd like to run their fabs at full capacity. Their competitors aren't going to ask them to build their chips for them, so it's in their best interest to spin off that operation. Now AMD can still design CPUs and their spun off manufacturing company can produce those CPUs as well as other companies' chips.

I demand that you stop injecting logic and reason into this conversation!

 

[Xyclone]

Misleading thread title. I thought they weren't solvent anymore.

 

[NoShangriLa]

Originally posted by: TridenTBoy3555

Originally posted by: Buck Armstrong
In other news, prices for Intel CPUs and Nvidia video cards more than doubled overnight. Film at 11.

I'll be sure to watch

It would be a miracle if it occur in the current credit melt down.

It would take more than a miracle for Nvidia to double the current share price over night when NVDA is losing its exclusive partners due to poor top end graphic chip performance, with rumors that NVDA is getting out of the chipset market floating around on the net, $200,000,000 write down for defective parts, and Intel Labaree is looming around the corner.

There aren't much good news to booster NVDA stock at the moment, but I hope CUDA will be the saving grace and bring Nvidia shares back into perspective by the end of 2009 early 2010.

Intel is currently at $16.93 down from a 52 week high of $27.78.

Nvidia closed at $7.85 a share today from a 52 week high of $37.39.

Interesting, any rumors on who they're partnering with for manufacturing?

AMD+IBM+TSMC?

Rumors has it that it could be either IBM or TSMC, or both will be likely to produce AMD future chips because AMD hasn't gotten any where near IMB/TSMC 22/20 nm tech.

 

[ElFenix]

was there this much teeth gnashing when coca cola sold off its manufacturing?

 

[pstylesss]

So what does this mean for stockholders tomorrow morning? Anyone know?

 

[NoShangriLa]

.

 

[OCGuy]

Originally posted by: ZeroIQ
So what does this mean for stockholders tomorrow morning? Anyone know?

Im sure this has been factored in to AMDs stock for a while. Anyone who follows CPUs and hasnt been under a rock has known about this.

 

[goog40]

AMD's stock is up a good amount in Frankfurt right now. Previous close was at 3.00 Euros, it's at 3.67 Euros now which translates to approximately $5.00 (which would be about a 17% jump over the value of it's close yesterday in the US stock market).

Edit: Up to $5.50 a share in pre-market trading right now (+30%).

 

[DisgruntledVirus]

This can be a great move for them. As others have said, splitting the fabs off on their own can help them to bring in new business they might not under the AMD banner. Now AMD can go to the cheapest fab without that overhead, and the fabs can branch out to more companies they produce for (hopefully).

At first I was thinking "crap no more AMD that sucks", but then realized that's not at all what it meant.

 

[iamwiz82]

Apparently Nermal was on the board of ATIC.

 

[AMCRambler]

Crap. There goes my stock...even more!

Edit: Wait...the stock is up now? Wtf? Thought this would be viewed as a bad thing. I guess Wall Street likes outsourcing.

 

[bharatwaja]

I was on the phone with my girlfriend when I heard this on the Radio and go "Holy cr@p".... Then I've not been able to get in touch with her again till now, I wasn't paying much attention to her, and I have no idea what she was talking about.... but yeah, nice move by AMD......... (wish I weren't on the phone with my SO when I heard of this)

***EDIT*** I got in at $4.30......

 

[ElFenix]

Originally posted by: AMCRambler
Crap. There goes my stock...even more!

Edit: Wait...the stock is up now? Wtf? Thought this would be viewed as a bad thing. I guess Wall Street likes outsourcing.

why would ridding yourself of a capital intensive factory with huge amounts of over capacity be a bad thing? they're maintaining a large amount of equity in the new entity and getting an $8.4 capital infusion from sovereign wealth funds in abu dhabi, which helps their long term prospects.

 

[Sureshot324]

Why would splitting the company in two help their financial problems? The bad half goes bust, and the good half profits?

 

[ViviTheMage]

Originally posted by: Injury
Even though they have been on the road to failure for a few years now, it sucks mostly because with less competition, Intel has a bit less incentive to develop at a faster pace.

Hopefully something positive comes from this.

I was thinking the same exact thing...I don't want them to slow down. IMO we are far behind in where we 'should' be...flying cars and all.

 

[hanoverphist]

Originally posted by: Baked

And confirmation from Wall Street Journal

Advanced Micro Devices Inc. Tuesday is announcing a broad plan to cut costs by spinning off its manufacturing operations to a new joint venture, according to people familiar with the matter.

The new venture, which will make chips for AMD and other companies, will take over facilities that include large AMD factories in Germany, with funding provided by investment entities associated with the government of Abu Dhabi, these people said. They will contribute cash to the venture as well as assume some of AMD's ...

Originally posted by: dbk
Probably won't change anything on the consumer-end.

yes it will, it will give them the ability to put chips into things they previously hadnt. smart move on their part, they are diversifying in the face of doom and gloom.

 

[Gibson486]

Originally posted by: goog40
So what's the outlook on this move? Seems like it should be a good thing, but I wonder how the stock prices are going to be affected by the announcement.

Good and bad....

Fabless opens more door to more design and problems of manufacturing are no longer 100% theirs.

Ofcourse, now that they are fabless, they can no longer control the cost of their chips, unless they makes some contract that no fab in their right mind would sign. You also increase the chance of info leaking.

 

[vi edit]

Originally posted by: Sureshot324
Why would splitting the company in two help their financial problems? The bad half goes bust, and the good half profits?

That's not what is happening.

Basically they have a factory sitting there costing a boatload of money to operate and only putting out a fraction of the productivity that it is capable of doing. So you are throwing money away on wasted production capability.

They spun off the production costs to a company that can produce other chips along with their own and run at a higher production level making for more reasonable operating costs.

They don't have to pay the employees to sit there and work half as hard. They aren't paying heating and electricity for a building that is working half as hard as it should. Ect.

Let somebody else maximize the production and just pay them for their services. In turn take those saved costs and apply them to other places you are hemoraging money.

 

[Gibson486]

Originally posted by: hanoverphist

Originally posted by: Baked

And confirmation from Wall Street Journal

Advanced Micro Devices Inc. Tuesday is announcing a broad plan to cut costs by spinning off its manufacturing operations to a new joint venture, according to people familiar with the matter.

The new venture, which will make chips for AMD and other companies, will take over facilities that include large AMD factories in Germany, with funding provided by investment entities associated with the government of Abu Dhabi, these people said. They will contribute cash to the venture as well as assume some of AMD's ...

Originally posted by: dbk
Probably won't change anything on the consumer-end.

yes it will, it will give them the ability to put chips into things they previously hadnt. smart move on their part, they are diversifying in the face of doom and gloom.

no it doesn't. AMD's chips will still be AMD's chips. They are just offering the service of fabrication, not adding other people's chips to their line up.

 

[sandorski]

This will remove a major Cost from AMDs balance sheet. FABs are freaking expensive and need to be completely replaced very often as Manufacturing processes change. The only possible downside is that quality control is out of their hands and possibly direct experience on the Manufacturing side will be a disadvantage in designing a working chip(s). Overall though, without the overhead of FABs to worry about, AMD could find itself being Profitable even when times are tough. Should make them more competitive.

 

[imported_Imp]

Suxxors!!!

Who cares. I wrote off AMD long ago. I can't wait to save enough money to switch back over to Intel.

 

[mrrman]

looks like the Saudi's are buying the US, 1st it was GE, now AMD...next it will Martha Stewart Living lol

 

[0roo0roo]

great, so soon to buy american you just buy intel....
less and less reason to buy amd