Go Big or Go Home, AMD!

Editor's note: At this time, the release date of AMD’s “Fusion” platform is unconfirmed. Previously, the Fool had quoted this date as the second half of 2009. The Fool regrets this error.

If I can make it there,
I'll make it anywhere;
it's up to you,
New York, New York!
 -- From "New York, New York"

Thus spoke Frank Sinatra, and now Advanced Micro Devices (NYSE: AMD  ) is following in Ol' Blue Eyes' footsteps. The chip designer's newly spun-off manufacturing arm is about to break ground on a new factory in New York state.

The GLOBALFOUNDRIES joint venture (Apologies to the company and their love for the Caps Lock key, but I'll be referring to it as "GlobalFoundries" from this point on) is expected to spend $4.2 billion on this new facility over the next three to four years, creating more than 1,400 direct manufacturing jobs and an additional 5,000 jobs within the region.

While that's great news for the Empire State, it also shows the benefits AMD is reaping from this spin-off move. AMD's admittedly shaky balance sheet will not need to bear the full burden of this ambitious project, as wealthy investors in Abu Dhabi help foot the bill. The company can't afford to fall too far behind Intel (Nasdaq: INTC  ) in the eternal race toward more manufacturing capacity and better chip-making processes. Delaying the new fab while rebuilding AMD's balance sheet could have been a fatal error, which has been avoided for the time being.

It's also a show of strength that coincides with market research firm iSuppli showing that Intel lost 2.3 percentage points of market share to AMD last quarter. And all of these forward-looking moves are happening without the benefit of the new 6-core Istanbul architecture, which launched too recently to have any impact on iSuppli's numbers.

The New York plant should be operational by 2012, and equipped with the latest and greatest manufacturing processes GlobalFoundries can come up with. That includes input from longtime manufacturing tech partner IBM (NYSE: IBM  ) , whose global headquarters are just a couple of hours down I-87 from Saratoga County.

Intel will surely remain the largest processor provider for years to come, but AMD's capacity planning should put some pressure on the giant. Also, GlobalFoundries plans to go a-courtin' other fabless chip designers who need manufacturing done here in America rather than shipping orders off to Taiwan Semiconductor Manufacturing (NYSE: TSM  ) and other far-eastern providers. That could include homeland heroes like Broadcom (Nasdaq: BRCM  ) and even direct AMD competitor NVIDIA (Nasdaq: NVDA  ) .

As I keep telling you, AMD appears poised to rise from the grave, and is positioned for big things in the near future. We haven't even seen the real payoff from the ATI acquisition yet, but the "Fusion" platform that builds on the combination of AMD and ATI's technologies looks to fulfill that promise, though on a delayed release schedule.

Further Foolishness:

NVIDIA is a Motley Fool Stock Advisor recommendation. Intel is a Motley Fool Inside Value recommendation. The Fool owns shares and wrote puts on Intel. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund owns shares in AMD and TSMC, but he holds no other position in any of the companies discussed here. He's just as blue-eyed as the Chairman of the Board, but not nearly as blond. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.


Read/Post Comments (6) | Recommend This Article (17)

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  • Report this Comment On June 11, 2009, at 5:08 PM, MajorPhil wrote:

    Guess you didn't get the memo:

    http://arstechnica.com/old/content/2008/11/amd-fusion-now-pu...

    The perpetually-delayed Fusion won't be available for 2 more years, as announced by AMD last November.

  • Report this Comment On June 11, 2009, at 5:12 PM, SnarfJabroni wrote:

    The shameless author and well-known AMD bagholder and shill, Anders, says the following:

    "As I keep telling you, AMD appears poised to rise from the grave, and is positioned for big things in the near future. We haven't even seen the real payoff from the ATI acquisition yet, but the "Fusion" platform that builds on the combination of AMD and ATI's technologies is coming in the second half of 2009."

    Umm, YEAH, you keep telling people...of course, you kept telling them throught 2006 and 2007, and how'd that work out for them...and YOU? Last time I checked you were a stock analysis website, and your "analysis" on AMD is clouded by your fandom, and dead wrong.

    You know, when you told people last year it couldn't possibly go lower than $6.7, and then it proceeded to plummet to $1.62.

    And I disagree, you HAVE seen the "payoff" of the ATI, and that would be: $3B in writedowns of goodwill that never bore any fruit, and non-performing ATI businesses that were shed for pennies on the dollar.

    And if you could please direct me to any AMD collateral, or INDEPENDENT account, of AMD having what they called the "Fusion" platform, i.e. a CPU/GPU on a single chip, being planned for release in 2009, I would LOVE to see it. Apparently you have drank the AMD KoolAid as well, because there is no such thing as FUSION until 2011...MINIMUM!

  • Report this Comment On June 11, 2009, at 5:15 PM, chipdudeatx wrote:

    It will be interesting to see how this plays out for both AMD (as the design house) and GLOBAL FOUNDRIES (as the fab), since both are married to the CMOS SOI process (silicon on insulator) - which is in the small minority of the chip industry (huge majority, including Intel, are using Bulk CMOS - cheaper to produce, esp, since that is where the volumes are). For AMD to make a change to Bulk CMOS, it will require lots of pain, time, and religious conversions :-)

    At this point in time, only AMD/GF, IBM, and Freescale are the ones trying to use SOI - time will tell if the additional R&D will really help anyone. I guess that NY is happy with the investment dollars, but it may be short lived.

    One thing for sure - the market will decide !

    Chip Dude in Austin, TX

  • Report this Comment On June 12, 2009, at 3:09 AM, BearSilicon wrote:

    Like others that have previously posted, I'd also like to see references to evidence of Fusion appearing in 2009.

    To Chip Dude in Austin, it's not a secret that GF will be offering a bulk process.

  • Report this Comment On June 12, 2009, at 10:11 AM, TMFZahrim wrote:

    MajorPhil, I did indeed miss the memo. So Fusion goes along with 32nm manufacturing now, which in turn comes to Dresden next year, according to Dirk Meyer:

    http://www.informationweek.com/news/hardware/processors/show...

    So Fusion is slated for next year, not 2009 or 2011. My apologies.

    Anders

  • Report this Comment On June 13, 2009, at 9:24 AM, SnarfJabroni wrote:

    TMFZahrim, aka Anders Bylund,

    Sorry chief, you are absolutely the WORST kind of tech analyst/journalist out there.

    From your link as "proof" of your claim on Fusion's "arrival"..

    "Dirk Meyer, chief executive of Advanced Micro Devices (NYSE: AMD), said Friday the chipmaker plans to "ramp up" production of next-generation 32-nanometer processors in the middle of next year with volume production starting in the fourth quarter"

    Let me see if I have this right:

    You are quoting a company CEO of a company who is NOTORIOUS for showing powerpoint product roadmaps where products mysteriously disappear with no explanation (yes, such as Bobcat and Fusion), from an article way back in in February, as your verification that Fusion will be available even in 2010?

    Do you even FOLLOW the mircoprocessor industry at ALL?

    When a company says they expect "volume production STARTING in the fourth quarter" of 2010, this should be your big indicator that they don't expect any real SALES of the product until the following 1-2 quarters, which is....say it with me: 2011.

    Plus, even though they said in the past their plans were to wait until 32nm for a CPU/GPU combo chip, I see nowhere in this article or elsewhere, where they say their FIRST 32nm chip is going to be Fusion, yet you make this illogical leap based on.....what?

    Not to mention, this is going to be a very risky process shrink AND new process, being implemented at the same time (which their competitor Intel would never do), AND being done by globalfoundries for the very first time.

    tsk tsk...utterly shamless. you truly cannot detatch your fandom from your "reporting", can you?

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