While AMD will serve as The Foundry
Company's first and primary customer for x86 processors, the new company has
ambitions beyond serving a single customer.
In the future, Sonderman said he sees
The Foundry Company as competing against some of the other large chip
manufacturers in the worldwide market, including TSMC (Taiwan Semiconductor
Manufacturing). Right now, TSMC manufactures all of AMD's
ATI graphics chips, and Sonderman said The
Foundry Company plans to compete against TSCM
to capture that business in the future.
By spinning off its manufacturing facilities, AMD
can now concentrate on processor design and marketing, while The Foundry
Company can compete for new business on its own. It's an agreement that Roger
Kay, an analyst with Endpoint Technologies Associates, said he believes is the
smart play for competing against Intel and bringing the company back to
"AMD gets to lower its fixed costs,
making it profitable at a lower level of revenue, and it can still participate
in leading-edge technology development," Kay wrote in an Oct. 7 research
note. "It gets out from under some of its debt and receives a cash
infusion from a patient source. The bonus: It gets to participate in an
entirely new business, a foundry that takes in knitting from other fabless semi
companies. AMD sweated this deal for a long
Before any deal goes through, however, AMD
and its Abu Dhabi partners are expected to face some scrutiny from CFIUS (Committee
on Foreign Investment in the United States), a government interagency committee
chaired by the Secretary of the Treasury. AMD's
processors are used in many computers and servers used by the U.S.
government, including the giant
Roadrunner supercomputer that IBM built for the Los Alamos National Laboratory
in New Mexico.
In the interview, Dessau said AMD and its Abu Dhabi partners are already preparing the paperwork for the
CFIUS committee, although he expects the government will approve the joint
venture partnership without problems. In addition, AMD is
preparing paperwork on the deal for the European Commission, the regulatory arm
of the European Union.