Is AMD getting ready to split?

Is AMD getting ready to split?

Summary: Rumors are circulating that chip maker AMD will split into two companies - one that's Asset Light and the other which is Asset Smart.

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Rumors are circulating that chip maker AMD will split into two companies - one that's Asset Light and the other which is Asset Smart.

Here what TG Daily has to say:

It is widely expected that Asset Light will part AMD into two companies – one that is led by newly crowned CEO Dirk Meyer and a focus on the development of chip technologies and a manufacturing arm that will take over AMD’s fabs. Our sources indicated that critical decisions are being made at this time and the official announcement of Asset Light and Asset Smart will be made next month.

It's hard to decipher this Asset Light/Asset Smart board room jargon, but there is logic to a chip technologies/manufacturing arm split. That said, it's hard to see how this is going to:

  • a) Be cheaper for the company (in the short-term at any rate)
  • b) Allow them to compete more effectively against Intel.

[poll id=340]

It'll also be interesting to see where ATI fits into any split if it happens. AMD is working hard to try to stop us thinking in terms of CPUs and GPUs and instead think of AMD as a company that can deliver a whole platform. While performance wise AMD is having a hard time keeping up with Intel in the CPU front, having a platform does simplify the buying process for end users, especially those looking for a good value PC that's suited to casual gaming.

AMD is in desperate need of high-end (and as such, high price-point) desktop CPUs to be able to complete with Intel. High-performance CPUs would give the company breathing space as it clawed back market share from Intel. In the desktop sector AMD has noting that costs more than $235. Intel has one Core 2 Duo part, six Core 2 quad and four Core 2 Quads that are priced above AMD's Phenom X4 9950 (AMD price list here, Intel here).

Topics: CXO, Enterprise Software, Intel, Processors

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8 comments
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  • high-end AMD vs Intel

    While I agree that AMD wants a high-end CPU to compete with the Core2Duo extreme processors, it is hard to say that this is a good course of action. Generally, it is gaming enthusiasts and benchmark addicts that actually shell out the insane prices for the extreme Core2s - it is hard for me to believe that there are enough of these out there to justify the R&D and production costs of such high end chips. If the course of action AMD took with ATI gives us any clue, the new market strategy aims for the mainstream - and so far is working. The new 'mainstream' ATI cards are powerhouses at the price level and putting a very strong squeeze on nVidia. If AMD can do the same thing with CPUs, Intel will be hurting. They do not need to match Intels high end CPUs, they just need to come within 10-20% of the performance at a mainstream price.

    Personally, I am skipping the current Phenom CPUs in wait of the AM3 socket platform to see what will available via that route. If this split helps AMD achieve lower production costs and streamline their R&D department, then I say go for it. I the consumer will benefit from the increased competition. With that in mind, I also believe that AMD has a good finance department and they would not persue this split unless it was financially viable.

    My 2 cents. Any other opinions out there?

    "The views expressed here are mine and do not reflect the official opinion of my employer or the organization through which the Internet was accessed."
    gnesterenko
  • AMD split talk premature

    Nvidia has a HUGE problem with with some of their deployed GPUs. It's a mistake to only consider the problems AMD is having competing with Intel in terms of assessing AMD's overall strategy. ATI (AMD) GPUs could help the bottom line in the short term given the Nvidia situation.

    But outsourcing manufacturing could work in the long term for AMD. Implementing new chip manufacturing technology is an important area where AMD has consistently lagged behind Intel over the past several years.
    djchandler
  • I was thinking the same thing...

    ** meant to reply to gnesterenko **

    Who is really in need of these high performance chips on the desktop in mass. I seriously look for the fastest sub $100 AMD and call it a day. Its more than fast enough for average daily use. I also do some graphics work and music production and they haven't posed any problems.
    storm14k
  • NoMo Assets Inc. and CoverMy Assets Inc.

    Despite the BS marketing nomenclature, I find this to be a good thing for AMD.

    They clearly have no assets on their own to wage a manufacturing war with intel. They may as well get rid of it combine with a TSMC of sorts.

    On the CoverMy assets piece (asset smart), this is aain a good resolution to focus on getting their pretty good engineers to design god graphics and CPUs.

    Still, Intel has an overall advantage to tailor their designs to their manufacturing processes. It's hard to do that when you're two different companies.
    Prognosticator
  • AMD can't seperate CPU design from CPU manufacturing.

    Under the agreement they have with Intel for the x86 license I believe that AMD must manufacture at least 80% of their x86 chips themselves. While it may be a good Idea to have AMD fabs manufacture something else when they are not moving enough AMD CPU's, the company that designs the CPUs must be the same as the one that manufactures them.

    The only way I can see it working where AMD splits into two companies where one designs and one manufactures, is if the company that designs the CPUs then turns around and sells the design to the AMD that manufactures the CPUs.
    se_lain
  • The only way a split makes sense

    If AMD is contemplating an architecture change/addition, then the split would facilitate licensing. Perhaps leaving x86 license with the manufacturing side, would leave the design side free to explore others. There are some who say that x86 as an architecture has "maxed out". If they are right, perhaps exploring PowerPC or some as yet undefined architecture is in order.
    Sagax-
  • RE: Is AMD getting ready to split?

    I build computers with AMD processors . I don't like intel's. The greatest thing i have found with the AMD's is that with a little tweaking you can't find an intel to hold a candle to them. Now i'm sure someone will dispute me (only in america) but prove me wrong. I'll prove me right.
    As far as AMD doing the split,it only makes financial sense. Less'n the irons in the fire so to speak.
    computerdudes2008@yahoo.com
    thebaileys1
  • RE: Is AMD getting ready to split?

    I think it is a bad idea (I voted) because i love AMD processors, even though i wouldn't mind Intel. AMD have done so well as one company, their reputation is huge so i don't know why they'd want to split up. I, like probably many others, are very frightened that it may turn into the worst processor ever. I prefer AMD over Intel and want to stick with AMD, but now i might not have an AMD to stick with.
    07palman