AMD is denying reports that it will sell off its fabrication plants, or fabs, in Germany as part of a plan to cut expenses and refocus the chip maker's energy of processors and graphics.
Advanced Micro Devices is planning to keep its fabs for now.
AMD
is denying a report that appeared in the Austin American-Statesman that contains
an interview with new CEO Dirk Meyer that seemed to indicate that the chip
maker was preparing to spin off its manufacturing facilities in Germany
and sell its two fabrication plants, or fabs.
The story appeared in the July 18 editions of the Statesman but was brought
back to life July 23, when the Inquirer news site used the Meyer interview to bolster its own story that
AMD is ready to sell off its manufacturing infrastructure as part of
cost-cutting drive. The selling of the two German fabs could be seen as part
of AMD's plan called "asset-smart" or "asset-lite," which
has been much talked about in the past year.
In the Statesman story, Meyer appears to have confirmed that AMD
will sell off its manufacturing facilities in a few months, and then a new
company would form with different ownership. Drew Prairie, an AMD
spokesperson, said Meyer was referring to how the company manufactures its
wafers.
"He said it is 'fundamentally important to AMD
to transform how we manufacture our wafers,'" Prairie wrote in an e-mail.
This could refer to a number of improvements, including AMD's
planned shift to 45-nanometer manufacturing later in 2008.
Since
announcing its seventh quarterly financial loss July 17, and with the
departure of Hector Ruiz as CEO, AMD
has been under scrutiny by both the financial community and the IT industry as
the chip maker looks to come back by the end of 2008. Meyer has said AMD
plans to refocus its energies on its core processor and graphics business.
However, the more AMD keeps its
asset-smart strategy under wraps, the more speculation it generates, which puts
additional pressure on the company. Ruiz has said he will remain with AMD
as the executive chairman of its board and focus on implementing the
asset-smart program.
Prairie said AMD hopes to release some
information on asset-smart soon.
Some financial analysts believe asset-smart involves spinning off AMD's
manufacturing facilities, and that would leave
Ruiz
as a natural choice to be the top executive of this new company.
AMD has two fabs in Dresden,
Germany, called Fab 36
and Fab 38. In the chip business, manufacturing eats up a vast chunk of the
revenue.
Intel
announced in 2007 that it had spent billions on just one new fab and AMD
could save much-needed millions by selling its own facilities.
AMD has jettisoned manufacturing facilities in the past.
In 2004, AMD converted its Fab 25 in Austin, Texas, into a facility that is now making flash memory
for Spansion, a company in which AMD
holds a financial stake.
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