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Will AMD be able to afford the 45nm and 32nm node?

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April 4, 2007 1:28:57 PM

According to this article at EE Times, the answer is no. Or, at the very least, they will not be able to afford it on their own and will have to rely on partnerships with other manufacturers.

EE times artcle

Quote:
Much of the data is uncertain for the 32-nm node and beyond, but some say that by then, a new 300-mm fab could go for $10 billion, as process R&D costs reach $3 billion and design costs $75 million.

"I am not saying that the semiconductor industry has reached a stalemate," said Tom Williams, a fellow at Synopsys (Mountain View, Calif.). "But making the jump to the 65- and 45-nm nodes will involve a very small part of the [chip-making] population. You will see people jumping at the 45- and 32-nm nodes too, but only the elite few will be able to afford it."


It appears intel is killing AMD's cashflow when they need it more than ever.

Thoughts?

More about : amd afford 45nm 32nm node

April 4, 2007 2:13:23 PM

To me its the same old story. AMD has always relied upon IBM and others. The consortium is there just for that reason. The MIT example will help deflect the costs as well. As more processes are included into making chips smaller it will get more costly. Ultimately 32 nm may be the end of process size design. Then what? Lasers? Diamonds? Who knows, but I think its far easier to be in a consortium than to go it alone IMHO
April 4, 2007 2:19:05 PM

Quote:
To me its the same old story. AMD has always relied upon IBM and others. The consortium is there just for that reason. The MIT example will help deflect the costs as well. As more processes are included into making chips smaller it will get more costly. Ultimately 32 nm may be the end of process size design. Then what? Lasers? Diamonds? Who knows, but I think its far easier to be in a consortium than to go it alone IMHO

maybe the limit for 2d transistors, how about if they start in 3d? :p 

or going quantum D:
April 4, 2007 2:27:52 PM

This is exactly why most company, but Intel, are doing "team work" right now to cut most of the cost involved. I can even predict that most probably around 32nm, Intel itself will start to look for partner to keep the return on investment at a reasonable level.

My 2¢. :wink:
April 4, 2007 2:38:23 PM

Real busy today but just had to stick my nose in real quick for a mini-post.

AMD's market cap has just dipped to $6 billion and change category and a share price of $12.67.

The entire value of AMD is now very close to what they paid for ATI. AMD can't afford coffee for the staff at this valuation, let alone $10 billion fabs.

This is like the bum on the corner visiting the Rolls Royce dealership. All he's gonna be able to do is look in the windows.

At some point Hector is gonna have to pull his head out of his rectum and take a good look around. Even rats jump off of a sinking ship.
April 4, 2007 2:43:40 PM

If this helps :roll: ....
April 4, 2007 4:22:44 PM

Quote:
According to this article at EE Times, the answer is no. Or, at the very least, they will not be able to afford it on their own and will have to rely on partnerships with other manufacturers.

EE times artcle

Much of the data is uncertain for the 32-nm node and beyond, but some say that by then, a new 300-mm fab could go for $10 billion, as process R&D costs reach $3 billion and design costs $75 million.

"I am not saying that the semiconductor industry has reached a stalemate," said Tom Williams, a fellow at Synopsys (Mountain View, Calif.). "But making the jump to the 65- and 45-nm nodes will involve a very small part of the [chip-making] population. You will see people jumping at the 45- and 32-nm nodes too, but only the elite few will be able to afford it."


It appears intel is killing AMD's cashflow when they need it more than ever.

Thoughts?


To me it shows that if you are behind Intel's efforts and they succeed you will wish you hadn't. Intel would quickly raise prices quoting "increased demand" and "cost of infrastructure changes."

ALL HAIL THE STUPIDITY!!!!
April 4, 2007 4:29:59 PM

Quote:
Real busy today but just had to stick my nose in real quick for a mini-post.

AMD's market cap has just dipped to $6 billion and change category and a share price of $12.67.

The entire value of AMD is now very close to what they paid for ATI. AMD can't afford coffee for the staff at this valuation, let alone $10 billion fabs.

This is like the bum on the corner visiting the Rolls Royce dealership. All he's gonna be able to do is look in the windows.

At some point Hector is gonna have to pull his head out of his rectum and take a good look around. Even rats jump off of a sinking ship.



Talk about over-dramatizing. Sure AMD is down right now but they are far from out as they still service 25% of the world. Their credit rating was lowered but that just means they can't borrow as much.

They probably won't need to as they have operated in the red for YEARS and are still here. Even when the stock was $3.
April 4, 2007 4:30:13 PM

Quote:
Real busy today but just had to stick my nose in real quick for a mini-post.

AMD's market cap has just dipped to $6 billion and change category and a share price of $12.67.

The entire value of AMD is now very close to what they paid for ATI. AMD can't afford coffee for the staff at this valuation, let alone $10 billion fabs.

This is like the bum on the corner visiting the Rolls Royce dealership. All he's gonna be able to do is look in the windows.

At some point Hector is gonna have to pull his head out of his rectum and take a good look around. Even rats jump off of a sinking ship.


ATi's asset was only about $1.3B in the merger.
April 4, 2007 5:11:42 PM

Quote:
Talk about over-dramatizing. Sure AMD is down right now but they are far from out as they still service 25% of the world. Their credit rating was lowered but that just means they can't borrow as much.

They probably won't need to as they have operated in the red for YEARS and are still here. Even when the stock was $3.


Baron, are you kidding? The punchline of the article is that at every node, the capex and R&D costs go up substantially. If AMD can no longer raise sufficient capital, they are going to have change the way they operate -- i.e. outsourcing all 45nm production to a foundary such as chartered or TSMC for example.

Sure AMD has operated in the red for many years, but never have they been in such deep debt with such huge capex requirements on the horizon.
April 4, 2007 5:27:15 PM

Quote:
This is exactly why most company, but Intel, are doing "team work" right now to cut most of the cost involved. I can even predict that most probably around 32nm, Intel itself will start to look for partner to keep the return on investment at a reasonable level.
My 2¢. :wink:


32nm already works and is on it's way to mass production right now. No partnerships needed, thanks.
April 4, 2007 5:33:16 PM

Quote:
According to this article at EE Times, the answer is no. Or, at the very least, they will not be able to afford it on their own and will have to rely on partnerships with other manufacturers.

EE times artcle

Much of the data is uncertain for the 32-nm node and beyond, but some say that by then, a new 300-mm fab could go for $10 billion, as process R&D costs reach $3 billion and design costs $75 million.

"I am not saying that the semiconductor industry has reached a stalemate," said Tom Williams, a fellow at Synopsys (Mountain View, Calif.). "But making the jump to the 65- and 45-nm nodes will involve a very small part of the [chip-making] population. You will see people jumping at the 45- and 32-nm nodes too, but only the elite few will be able to afford it."


It appears intel is killing AMD's cashflow when they need it more than ever.

Thoughts?


When I gave the publication of this same article 2 days ago:

http://forumz.tomshardware.com/hardware/modules.php?nam...


no one really could say much about it by my standards. Even Jack didn't touch it then, even when I asked him about it in another thread also. Probably because it isn't easy to guage.

But I did have a couple of rather interesting thoughts! Which I put in that thread, if you are curious. (especially message #5)
April 4, 2007 5:46:14 PM

Sorry halbhh, I seemed to have missed your thread. In regards to the tick tock strategy slowing down, I am inclined to agree with you, especially if the competition begins to really lag behind.

It is better to maximize your ROI at each node by staying on it as long as possible so long as you at least stay 6 months ahead of your competition.
April 4, 2007 5:59:59 PM

Intel has already stated 32nm is coming in 2009. 22nm and 16nm are expected in two year intervals after that. It's not really known where they'll go after that. It would make some sense with Intel to team up with someone like IBM for the next gen designs after that. With all their engineers and all the cash those two companies have they could come up with something more than a "simple" die shrink that will keep the industry going for the years to come.
April 4, 2007 6:08:22 PM

Quote:
Talk about over-dramatizing. Sure AMD is down right now but they are far from out as they still service 25% of the world. Their credit rating was lowered but that just means they can't borrow as much.

They probably won't need to as they have operated in the red for YEARS and are still here. Even when the stock was $3.


Baron, are you kidding? The punchline of the article is that at every node, the capex and R&D costs go up substantially. If AMD can no longer raise sufficient capital, they are going to have change the way they operate -- i.e. outsourcing all 45nm production to a foundary such as chartered or TSMC for example.

Sure AMD has operated in the red for many years, but never have they been in such deep debt with such huge capex requirements on the horizon.


I agree but with convergence many of ATi's offering will eb staples in every Intel sale and AMD has already lowered their costs by about 30-40% by going all 65nm. Only Opteron and Turion are still 90nm and Turion is a smaller chip with more volume potential.

I would assume that the last Windsor starts aren't far off. FireStream adds a serious margin to the GPU division. Barcelona will buoy the server and desktop divisions. If Barcelona slots perf wise between Clovertown and Penryn, it actually puts more pressure on Intel as they have to decide where to direct their efforts in terms of price, i.e. they can't drop the bottom out of Clovertown the way they did Cointreau(Conroe for the slow), but they may have to.

If AMD does struggle and get 30% overall by Q3, that means an additional 10-12% in revenue without better Barcelona prices.

They have excellent growth opportunities, so execution is hteir greatest need.
April 4, 2007 6:09:22 PM

Quote:
According to this article at EE Times, the answer is no. Or, at the very least, they will not be able to afford it on their own and will have to rely on partnerships with other manufacturers.

EE times artcle

Much of the data is uncertain for the 32-nm node and beyond, but some say that by then, a new 300-mm fab could go for $10 billion, as process R&D costs reach $3 billion and design costs $75 million.

"I am not saying that the semiconductor industry has reached a stalemate," said Tom Williams, a fellow at Synopsys (Mountain View, Calif.). "But making the jump to the 65- and 45-nm nodes will involve a very small part of the [chip-making] population. You will see people jumping at the 45- and 32-nm nodes too, but only the elite few will be able to afford it."


It appears intel is killing AMD's cashflow when they need it more than ever.

Thoughts?


To me it shows that if you are behind Intel's efforts and they succeed you will wish you hadn't. Intel would quickly raise prices quoting "increased demand" and "cost of infrastructure changes."

ALL HAIL THE STUPIDITY!!!!


You hit the nail on the head.Sadly while it's great for us now,processor price wise, we do need AMD to keep intel from being a cartel.
April 4, 2007 6:40:26 PM

Quote:
Real busy today but just had to stick my nose in real quick for a mini-post.

AMD's market cap has just dipped to $6 billion and change category and a share price of $12.67.

The entire value of AMD is now very close to what they paid for ATI. AMD can't afford coffee for the staff at this valuation, let alone $10 billion fabs.

This is like the bum on the corner visiting the Rolls Royce dealership. All he's gonna be able to do is look in the windows.

At some point Hector is gonna have to pull his head out of his rectum and take a good look around. Even rats jump off of a sinking ship.



Talk about over-dramatizing. Sure AMD is down right now but they are far from out as they still service 25% of the world. Their credit rating was lowered but that just means they can't borrow as much.

They probably won't need to as they have operated in the red for YEARS and are still here. Even when the stock was $3.

:lol:  you seem to have polar perception... if it is pro amd you jump in proclaiming it the gospel, if it is pro intel you jump in dispelling the info. :p 
April 4, 2007 6:44:31 PM

:p 
April 4, 2007 6:44:45 PM

Quote:
Real busy today but just had to stick my nose in real quick for a mini-post.

AMD's market cap has just dipped to $6 billion and change category and a share price of $12.67.

The entire value of AMD is now very close to what they paid for ATI. AMD can't afford coffee for the staff at this valuation, let alone $10 billion fabs.

This is like the bum on the corner visiting the Rolls Royce dealership. All he's gonna be able to do is look in the windows.

At some point Hector is gonna have to pull his head out of his rectum and take a good look around. Even rats jump off of a sinking ship.



Talk about over-dramatizing. Sure AMD is down right now but they are far from out as they still service 25% of the world. Their credit rating was lowered but that just means they can't borrow as much.

They probably won't need to as they have operated in the red for YEARS and are still here. Even when the stock was $3.

:lol:  you seem to have polar perception... if it is pro amd you jump in proclaiming it the gospel, if it is pro intel you jump in dispelling the info. :p 


I have never attempted to dispel positive Intel news. Stop making things up.
April 4, 2007 6:57:32 PM

anywho, that article indicated a predicted future problem due to R&D costs as the chip arch shrinks...
well, if this is foreseen, the problem can simply be absorbed by increasing future chip prices (or adjusting) when the forecast indicates this is occurring...
April 4, 2007 6:59:47 PM

As my co-worker (I assume) stated, no need for partners for 32 or 22nm 8).

we'll see what happens at 16nm :) 
April 5, 2007 7:27:03 AM

Quote:
ATi's asset was only about $1.3B in the merger.


Then why did AMD pay $5.8B for them?

Quote:
Talk about over-dramatizing. Sure AMD is down right now but they are far from out as they still service 25% of the world. Their credit rating was lowered but that just means they can't borrow as much.

They probably won't need to as they have operated in the red for YEARS and are still here. Even when the stock was $3.


That's my point exactly. Their credit rating was lowered. The entire worth of their company is Wall St. pocket change. So what is this talk about $10B fabs, $3B just in R&D, etc.? It's like walking down Rodeo Dr. with a maxed out Visa card. You can look, but you sure as hell can't afford any of it!
April 5, 2007 9:27:32 AM



the big question i think is will AMDs stock go up again as if it is going to go up (if only in the short term with agena,Barcelona, R600) would it not be a good idea to buy amd stock now?
April 5, 2007 10:11:34 AM

Quote:
would it not be a good idea to buy amd stock now?


I'm not an investor, but with 13 out of 14 majors downgrading the stock this quarter, I'd rather donate, er... spend my money on the next Kevin Federline CD (!!!) than buy AMD. :lol: 

Quote:
Page 55.
About $3B is of "Goodwill".


1) What a deal! I wonder if Hector got some real dry swampland in Florida and the toll rights to the Brooklyn Bridge at the same time.

2) What putz spends more on Goodwill than the rest of the company? As I've said before, these are the guys whose next glimpse of Goodwill will be when they pick out their used furniture for their flophouse bedsits.

3) When I buy an Armani suit, I realize that I'm spending maybe $200 for the fabric and labour and $1000+ for the name. That's part and parcel of the purchase. It doesn't keep my credit card from being charged any less! I still pay full price and I'm out the full amount. Goodwill/Name/Whatever. It still costs!!!

8)
April 5, 2007 10:52:09 AM

I dont think the question is whether AMD can afford future nodes or not.
The question is whether or not AMD can afford being alive.
April 5, 2007 9:14:09 PM

I've seen numbers presented on how much the top players in silicon fabrication are spending per year, and there appear to be three major players with the exit of TI from the picture.

Intel spends the most, somewhere over a $1billion. I don't recall the exact number, maybe $1.2billion.

The IBM alliance, which consists of IBM, AMD, Chartered, Freescale, Samsung and Sony, spends somewhere around $700-800million

The foundry TSMC, which appears to have gained TI's business and NXP's, spends roughly the same amount as the IBM alliance, I think it was $700million.

TSMC has a foothold into the IBM alliance, since Freescale sometimes uses them, and I'm pretty sure that Chartered is not strong enough outside of SOI to competively serve the low-power technology that Freescale lives off of.

The number of big players is dwindling. However, there is only one reason costs are skyrocketing. Intel is setting a torrid pace and the rest are struggling to keep up and stay competitive.

Cost are going up, but so is Intel's potential revenue. There is a whole new world of low cost processor, graphics and chipsets that is opening up and the far east is on the verge of an explosion in high-end chip consumption. They are very well positioned to claim this market, especially if AMD is crippled. That would provide them with the revenue to contiune their fast pace of development.

The solution for those without deep pockets is to only slowly increase development spending, thus slowing the speed of technology development. To avoid this, they have to increase the size of their partnerships. However, with the attitude of TSMC, which wants to do all of their technology development themselves, it seems highly unlikely that there will be an IBM-TSMC alliance. Intel isn't going to create an alliance with anyone and will not have to so long as they have the biggest budget. They are setting the pace. If that pace becomes a new technology every five years, they will still be the first ones there, which gives them an advantage in the market.
April 6, 2007 1:16:04 AM

You numbers are a little off there man. Intel spends a billion a year in electricity costs alone.
April 6, 2007 3:09:50 AM

amd back is ibm!
April 6, 2007 4:42:59 AM

Quote:
According to this article at EE Times, the answer is no. Or, at the very least, they will not be able to afford it on their own and will have to rely on partnerships with other manufacturers.

EE times artcle

Much of the data is uncertain for the 32-nm node and beyond, but some say that by then, a new 300-mm fab could go for $10 billion, as process R&D costs reach $3 billion and design costs $75 million.

"I am not saying that the semiconductor industry has reached a stalemate," said Tom Williams, a fellow at Synopsys (Mountain View, Calif.). "But making the jump to the 65- and 45-nm nodes will involve a very small part of the [chip-making] population. You will see people jumping at the 45- and 32-nm nodes too, but only the elite few will be able to afford it."


It appears intel is killing AMD's cashflow when they need it more than ever.

Thoughts?


To me it shows that if you are behind Intel's efforts and they succeed you will wish you hadn't. Intel would quickly raise prices quoting "increased demand" and "cost of infrastructure changes."

ALL HAIL THE STUPIDITY!!!!

OK, so keep on using lesser performances cpu.

On my side I'll gladly switch to AMD if Barcelona perform well, not for the sake of saving them.
April 6, 2007 5:41:35 AM

I predict that AMD's stock will......go up, stay the same and go down over time.... :lol: 

As for AMD recapturing their lead, remember the old saying "Past performance is no gaurentee of future returns" Works for more than just stocks.

INTEL if they are focused on eliminating AMD should be able to since their revenue is so much higher....the thing of it is, that as a goal, 100% market share is just not worth pursuing. You reach a point of diminishing returns and AMD is still very small compared to AMD.

The fact that AMD's great R600 is still not out and irreversibly 65nm based, means that Intel is going to take all the props when they launch 45nm based silicon later this year UNLESS they run into problems just like AMD did.

So you can be safe in saying, one cannot predict the future, no matter what Wall Street and "Experts" say.
April 6, 2007 5:25:51 PM

Quote:
You numbers are a little off there man. Intel spends a billion a year in electricity costs alone.


SockPuppet,

I think your perception that my numbers are off is related to your not understanding what technology development in the semiconductor industry entails. I'm not talking about the expense of building fabs or purchasing new lithography equipment for fabs. I'm talking about running test vehicles through a fab to characterize and tune a new technology. A lot of time and effort is spent putting a system in place so the design engineers can simulate what they are going to get on silicon(drc/model simulation/parasitic extraction/signal isolation) and a lot of time and effort is spent making the process consistent and tuning characteristics of the process to meet the needs of the devices. How many people you have working on this and how quickly you put test vehicles through the fab determines how quickly a new technology gets up and running.
April 7, 2007 12:38:06 AM

Quote:
Talk about over-dramatizing. Sure AMD is down right now but they are far from out as they still service 25% of the world. Their credit rating was lowered but that just means they can't borrow as much.


Not quite all. For some of their borrowing, it also now means they have to pay back a significantly higher rate of interest.
!