AMD CEO shares hopeful outlook on fab spin-off


— 10:57 AM on February 27, 2009

Just days before AMD expects to spin off its manufacturing division and give birth to The Foundry Company, AMD CEO Dirk Meyer has spoken to the folks at CNet to share some observations and his outlook on AMD's future. Meyer seems hopeful about the financial impacts of the spin-off, which he believes may save $1-2 billion a year down the line:

"In the past we've been burdened with the need to invest in silicon R&D and wafer fabs (plants). And this transaction gets us out from underneath both of those things. In the past, we've had to invest between one and two billion dollars a year in manufacturing capacity for wafer fabs. We don't have to do that anymore." . . . "This will bring a bunch of cash into the company and lighten our debt load," he said.

Meyer also addressed some comments by Intel CEO Paul Otellini, who—quite unsurprisingly—believes AMD is making a mistake by splitting its design and manufacturing operations. On that point, Meyer thinks Otellini has an inaccurate view of the situation:

"The supposition is just wrong. That presumes we won't have a relationship with our foundry partners." . . . "Actually, we have that relationship with TSMC today, who builds our graphics parts." . . . "So, the supposition that we won't have the appropriate influence on technology isn't correct. What about Qualcomm, Nvidia, TI (Texas Instruments)...who don't own their own manufacturing assets? The idea of being a successful semiconductor product company and not owning the manufacturing assets isn't new."

Finally, Meyer reiterated AMD's disinterest in netbooks. "I hate to say Netbooks because a year from now people won't say Netbooks," he noted, although he went on to say AMD chips will eventually "show up in devices down to the $399 price point." AMD has made it clear before that it's aiming for full-featured, portable, and low-cost laptops rather than less-powerful netbooks.

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