X-bit labs

AMD May Consider Outsourcing of Chip Production – Analysts.

Category: CPU

by Anton Shilov

[ 06/18/2007 | 11:19 PM ]

Advanced Micro Devices, the world’s second largest maker of central processing units (CPUs) for personal computers, may be considering to outsource production of its microprocessor to a third party in order to save on fabrication technology development costs.

Even though AMD said that a report from Goldman Saschs that described the plan to outsource the manufacturing was “speculative”, AMD spokesman Drew Prarie confirmed that the company was trying to focus its efforts on developing chips instead of manufacturing them, a news story by IDG News Service agency reads.

In fact, AMD already uses manufacturing capacities of Charted Semiconductor to produce some of its chips; however, the amount of such products is not really significant. At the same time, AMD has been facing shortages of its own manufacturing capacities for years and, due to the fact that development of new manufacturing technologies gets more complicated and expensive, while building of fabs is becoming more expensive too, outsourcing may turn out to be a solution for AMD. The company already is developing its process technologies with IBM, whereas its arch-rival Intel Corp. relies on in-house developed fabrication processes.

“We’re looking to find ways to extend that model beyond research and development to the full range of the manufacturing supply chain. That could run the range from increasing the amount of processors we send out for Chartered manufacturing, and could also include things like establishing partnerships on the manufacturing side,” said Mr. Prarie.

It should be considered that making of state-of-the-art chips requires state-of-the-art manufacturing processes and bulk technologies developed by companies like Taiwan Semiconductor Manufacturing Company (TSMC) may not allow AMD to create truly competitive high-performance products.