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AMD reviews plans for NY fab ...

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mpjesse   03-11-2007 at 04:33:34 AM
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Quote :

New York state has offered the company $1.2 billion in financial incentives, including $650 million in cash, and AMD has between now and July 2009 to make its decision.



Christ...

Reply to mpjesse
ira176   03-11-2007 at 08:22:51 AM
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I heard about AMD's plan for searching for a potential Fab site in Upstate NY about 1 to 1 1/2 ago. As soon as I heard, I told the newly elected mayor in my city (Auburn, NY) about AMD's plan. Auburn needs well paying jobs badly, as well as all of Upstate NY. Too bad the information was too late, only a about a month later, Malta, NY was the top choice. NYS especially Upstate NY, has been bleeding good jobs and the talent and knowlege of the younger ones go elsewhere. I think between Rochester and Syracuse, there's pleanty of talent to be had for AMD. I wish AMD would have chosen to be among other of America's great companies (Kodak, Xerox)in the region closer to me.

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bixplus   03-11-2007 at 08:33:17 AM
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Quote :

Posted in another thread, now it's own thread ---

Does the question 'will AMD go ahead with the NY fab?' coming up surprise anyone. Of course not. This is nothing to be alarmed about, AMD specifically penned the deal to give them ample time to judge present and future needs prior to making the decision.

Short-term performance should not make a big deal too much, other than how they might secure committed financing. Perhaps, and this is a big perhaps, the SEC filing to allow possible increase in outstanding stock has played into this.

Jack



Yes, and time is ticking. They have 12 weeks to raise the rest of the 2-3 billion it takes to build a new fab...or at least make it look to interested parties like they can. That will be a daunting task indeed. And, I think that statement about it having nothing to do about quarterly performance is pure manager speak. In light of their current position, it has everything to do with their decision....just my opinion though.

Also, I believe if AMD wouldn't have purchased ATI and placed such a large debt load on themselves, this FAB in NY deal would have already been inked. Bottom line, AMD should have focused on what they do best first...making CPU's and growing production capacity. I know, there's the whole arguement about branching into other markets or die...however, there's much to be said about overextending and it appears that's exactly what they've done.

Thoughts?

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Periander   03-11-2007 at 08:52:08 AM
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Quote :


Also, I believe if AMD wouldn't have purchased ATI and place such a large debt load on themselves, this FAB in NY deal would have already been inked. Bottom line, AMD should have focused on what they do best first...making CPU's and growing production capacity. I know, there's the whole arguement about branching into other markets or die...however, there's much to be said about overextending and it appears that's exactly what they've done.

Thoughts?



This is exactly my thinking as well. By buying ATI they dramatically weakened their balance sheet, their first order of business after the acquisition should have been to patch it up. Now it's probably too late. With their stock in the dumps, and worries about their balance sheet and cash flow they are in a much much more difficult position. Banks won't lend, private placements difficult and damaging, and that leaves cost cutting. First the Austin move is pushed back, now this. I think Intel's #1 priority right now is making sure this fab is never built. AMD/DAMMIT's lack of execution is making the job stupidly easy.

Reply to Periander
rammedstein   03-11-2007 at 09:43:15 AM
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AMD should do it, but only make a R&D fab or something, something that wont be as big and wont cost alot of money, but will have a great impact on them, and will be mostly paid for by the state of NY

Reply to rammedstein
bixplus   03-11-2007 at 03:45:04 PM
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Quote :

AMD should do it, but only make a R&D fab or something, something that wont be as big and wont cost alot of money, but will have a great impact on them, and will be mostly paid for by the state of NY



Yeah, R&D is definetly important, but AMD's biggest problem right now is capacity...and the only way to remedy that is with full chip producing fabs.

Speaking of R&D, Barcelona should give us a pretty clear picture where AMD is with R&D. If it turns out to be loser, then it'll be apparent that their hurting in this are too.

Reply to bixplus
bixplus   03-11-2007 at 03:53:12 PM
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[quote="Periander]AMD/DAMMIT's lack of execution is making the job stupidly easy.[/quote]

Agreed! Everything happened at AMD at exactly the wrong time. C2D came out and began chipping away at their momentum. They bought ATI and took their eyes off the ball. Delay of R600 likely due to AMD/ATI transition. Delays to 65nm (somewhat assumed at the moment) possibly due to the AMD/ATI transition and/or process setbacks. They've been distracted with too much activity and now, with the Austin decision, appear to have realized this.

Question is, will they have to make the same decision of postponement with regard to NY? I'm thinkin yes which really puts the hurtin on them since they desperately need capacity. They really shot their wad on ATI.

Reply to bixplus
Bobsama   03-11-2007 at 03:56:47 PM
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If I was AMD and Barcy wasn't quite finalized, I'd start immediate production, boosting clock speeds up nearing the max at 55*c... put their new cores in full-production to at least buy them some time... once they start pulling in some cash they'll be able to refine current designs and release new designs. Simple fact of the matter; Intel already has many cores ready for production; they're holding them back to keep AMD on the defensive. If AMD could push out Barcy tomorrow, no doubt in my mind but Intel would put out Penryn within 2 weeks... same with R600/R610/R630; I say within 2 weeks, nVidia releases the 8300GS/GT and 8600GT/Ultra; 2 weeks is enough to put it in mass production, and once that happens, all X1*00 AMD chips and all 7*00 nVidia chips stop production; sell of whats in stock and sell what's new and make it hot.

Simple fact of the matter; AMD is up on the gallows for now... once they try to escape, Intel has its move... if AMD makes the wrong move; check and mate.

Reply to Bobsama
qcmadness   03-11-2007 at 05:14:17 PM
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Quote :

I am not sure what the details went into the original agreement between AMD and NY state... I think they have up to two years to make a final decision. Not certain though.

I certainly agree ---- the ATI deal was a large acquisition for anyone, but it pretty much locked AMD into less than stellar leverage for future deals. It is odd, it isn't like Hector or Henri cannot add.... putting through the ATI deal would have left the cash strapped for a while, why would the be thinking NY fab when they know they would not be in a good position to fund it.... unless the outlook and progressives made more sense at the time they spit and shook hands..... who knows.

My bet is that the NY Fab will eventually be built.... it will be a year or two later than what AMD would have liked.

Here is the scarier part --- if you dig, you can find the presentations for AMD's financial arguments for buying ATI, under the new AMD_ATI model, everything worked so long as gross margins remained above 50%, but GPUs -- and specifically ATI -- have rarely witnessed 50% gross margins. So I think their concept that they would be able to drive to 50% GPM and remain there was optimistic at best.

Jack



AMD originally wanted NY Fab 4x to be completed in 2009. Now I think the fab will be completed after 2010.

About the gross margin, the chance of getting 50% GM for graphics products is slim unless AMD can find a way to save transistor from the fancy design for DirectX and OpenGL. :wink:

Reply to qcmadness
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