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AMD To Increase Outsourcing

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News Posted: Sat, Feb 23 2008 7:40 AM

“Advanced Micro Devices Inc., the world's second-biggest maker of computer processors, may announce plans to transfer more production in the next two to three months to reduce costs, a Lehman Brothers Holdings Inc. analyst said.”

We can't help but wonder if AMD might be outsourcing their high-end first in an attempt to reach a rough manufacturing parity with rival Intel.  Considering how much time and effort AMD has poured into their 65nm process, we'd be surprised if it wasn't already an extremely efficient operation on its own.  At this stage in the game it makes an awful lot of sense for AMD to be finding a firm to help them get their 45nm on track in time to fight Nehalam of.



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mazuki replied on Sat, Feb 23 2008 5:12 PM
i think it's just a way to save money during a long stretched out rough patch
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Kamrooz replied on Sat, Feb 23 2008 5:25 PM
I'm not necessarily sure on this one. We know that Intel uses a Copy Exact method for their fab facilities, they make sure temperature, humidity level, etc and so on are always the same for each facility to ensure all processors manufactured offer the same level of quality, performance, and to eliminate anything that can cause issues to their products.

AMD just does a Let's go, let's make it now method. So who knows, outsourcing might even help their quality control, while also lower cost. But we'll have to see how everything works out.
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ice91785 replied on Sat, Feb 23 2008 7:57 PM
Outsourcing is what tons of corporations do to save money -- a lot on property rentals/costs, taxes, and of course labor; all of these way cheaper than in the U.S. in many cases. As long as they aren't shutting down factories for the move I guess I don't mind -- if people started to lose their jobs over outsourcing then I would definately disagree with the procedure

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Kamrooz replied on Sat, Feb 23 2008 8:44 PM
Very true...I'm totally against people losing jobs over it. But it might become a reality considering AMD/ATI's finanacial trouble. But hopefully that doesn't become a case. Both ATI and Nvidia outsoure to TSMC and sometimes other companies for their gpu creation. Never expected to see it with their x86 processors though. We'll have to see how everything unfolds. But people losing their jobs is a big no no, especially with the current economy as is.
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How wouldn't someone lose a job? In theory someone is. If you're taking potential jobs and giving it to someone in another country, you are technically not giving the jobs to people in your country thus they are losing them.
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ice91785 replied on Sun, Feb 24 2008 3:58 PM
You could look at ANY situation like that though...If I go buy gas at SA, I am potentially taking gas away from customers that may need it 50 years from now because I am lowering the supply -- this doesn't mean i don't get gas. But I do agree with you mental to a certain extent...I would LOVE it if AMD kept everything local but in this age that is damn near impossible for ANYONE to do whether you are a smaller corporation or a giant.

As long as local factories' doors stay open and AMD doesn't "burn bridges" behind them I am semi-ok with it. Now if they were to outsource indefinately (say 10% labor in the U.S. and 90% to Asia) then I would start to become worried....

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Kamrooz replied on Sun, Feb 24 2008 7:58 PM

Agreed, outsourcing is a huge issue considering all these massive corporations today. When it comes to AMD though, they are seriously in financial trouble. So it will obviously help them a great deal. But I'll admit I'm skeptical about this asset light strategy. We'll have to see how everything unfolds...I would expect them to eventually pull back and produce their products themselves, but as time goes by, most large corporations become money greedy and try to increase profits no matter what. Hopefully AMD won't follow this route once they dig themselves out of this hole.

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methious replied on Mon, Feb 25 2008 10:40 AM

 I can't remember a time when AMD wasn't in some type of financial trouble.  You have to keep in mind though it's the stock price that's down.  The companies real physical and monetary resources are the same.  The stock holders lose money, they probably don't get dividends paid this quarter, AMD putts along.  

 

With their over priced acquisition of ATI it threw them into some murky waters, then immediatly released the 3850, 3870 and 3870 X2.  Which their marketing agressivly at a decent price point.  By diversifying and acquiring related technologies in the long run it should help to stabilize their finacial base. 

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AMD needs whatever cost saving help it needs.  Competition in the CPU market will be in trouble if these guys don't come out with a new good performing processor soon.  And that means higher prices from Intel. 

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Kamrooz replied on Mon, Feb 25 2008 7:59 PM

Indeed Methious, stock prices are down but they do have some cash to fall back on from their prior loans. But it won't last forever...and with the 9600 GT cutting into their profits..it's going to be an issue. But for those who want crossfire on a intel chipset, it'll be obviously picked up with much glee. The only upside ATM to ati cards is the crossfire aspect...They had the upper hand on the value segment with the 3850/3870...But this new 9600 GT takes back the crown at the same price point. But crossfire will be their only factor atm...Which Nvidia imo are idiots for only allowing SLI on their chipsets...they'd gain even more profits although ditching their SLI exclusivity to their own boards. 

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methious replied on Mon, Feb 25 2008 10:51 PM

 I saw some good results running 2 X 9600gt, claiming 80 or 90% of the second cards capacity being used.  Wonder if it'll bear out true, or just an isolated freak of GPU nature.

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methious replied on Tue, Feb 26 2008 11:43 AM

 Just a little after note, I had my water block off my AMD last night, on the processor iteself it said, some thing done in Germany, manufactured in Malaysa, I suppose they mean at their factories.  While they might be AMD manufactured, how much more out sourced on the labor can they get?

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Kamrooz replied on Tue, Feb 26 2008 7:52 PM

 They've been stated manufactured in malaysia for a VERY LONG time. =P

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