IBM Is Building a Fab For AMD?

by Anton Shilov
05/12/2003 | 04:08 AM

During the weekend pretty interesting rumours emerged concerning relationship between AMD and IBM. Reportedly, IBM may eventually transform its Advanced Semiconductor Technology Center (ASTC) in East Fishkill, New York, into a semiconductor plant that will produce AMD’s next-generation microprocessors.

 

Terms of the rumoured deal are not known at this point while AMD and IBM never made any comments in regards such deal, so, currently only unofficial sources are able to partly satisfy our curiosity.

According to the report over here, IBM is shutting down its Advanced Semiconductor Technology Center (ASTC) in East Fishkill and turning it into 300mm, sub-100nm fab. It is claimed that after the fab is operational, IBM will turn it over to AMD, who will make its next-generation processors there.

Earlier this year AMD and IBM signed an agreement about collaboration in development of on 65 and 45nm technologies to be implemented on 300mm silicon wafers (see this news-story). Under the terms of the agreement AMD and IBM will be able to use the jointly-developed technologies to manufacture products in their own chip fabrication facilities and in conjunction with selected manufacturing partners. Both IBM and AMD will produce chips using advanced SOI technology. In January we were told that IBM may also manufacture CPUs for AMD. Moreover, according to AMD plans, it intends to begin manufacturing its 65nm process on 300mm wafers in the second half of 2005 and the company was looking for a partner in the manufacturing facility that will produce 300mm wafers (see this news-story). Well, maybe AMD has already found this partner.

Since we have no idea about terms of such relationship between two companies, we can suppose almost everything. For its recent quarter AMD reported sales of $715 million and a net loss of $146 million. Having yet another $800 million or something like that in cash, AMD definitely cannot afford a semiconductor fab now. Though, the CEO Hector Ruiz said that the company will become profitable this year, so, we may now hope that AMD will start earning money and will be able to buy a plant from IBM by 2005. Another possible situation for both companies will be IBM buying AMD if the latter fails to become profitable eventually. This is a fantastical move for the companies, however, it may be possible in some cases.

In fact, idea to collaborate with an excellent semiconductor developer and technology provider is reasonable for AMD. The company faced a number of problems with its code-named Hammer aka K8 processors that are now branded as Opteron and Athlon 64; the list of difficulties AMD needed to tackle also included troubles with SOI manufacturing technology process, so, it is logical for AMD to turn to IBM (who is an inventor of this technology) not only in order to develop such techniques, but also to make the actual next-generation processors (probably code-named K9). But what IBM gets from all of this? Maybe money, maybe AMD.

To sum up, AMD and IBM may really have some deals besides technology partnership and it would be reasonable for the former to collaborate with the latter, however, nothing is a fact yet.