AMD to tap TSMC for processor production?

Recently, we've heard faint whispers that AMD could spin off its manufacturing business into a new company—whispers that recent statements from AMD CEO Hector Ruiz would seem to corroborate. Now, DigiTimes quotes industry sources as saying AMD will outsource more of its processor production in the second half of the year.

AMD has been getting other firms to make some of its CPUs for some time (just ask Chartered Semiconductor), but DigiTimes claims the chipmaker has picked an unlikely partner this time: TSMC, a.k.a. Taiwan Semiconductor Manufacturing Company, the pure-play foundry that already handles the lion's share of graphics processor manufacturing for both AMD and Nvidia. DigiTimes says the foundry has begun testing a silicon-on-insulator fabrication process in preparation for AMD CPU orders.

AMD partners reportedly believe further CPU production outsourcing might let AMD auction off some of its manufacturing equipment, thus cutting operational costs. Interestingly, DigiTimes says its sources also claim AMD wants to return to profitability in the first half of 2009 and increase its global market share to 30% by the second quarter of the same year. The latest word from AMD itself is that the company aims to become operationally profitable in the second half of this year.

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