PHILADELPHIA The success of Advanced Micro Devices Inc.'s bold plan to spinoff its capital-intensive semiconductor manufacturing operations rests on the shoulders of Doug Grose, a 20-year IC industry veteran and former executive with IBM Corp. systems and technology group.
Since the announcement of the planned spinoff Tuesday (Oct. 8), Grose has monitored industry reaction, some of it bullish about AMD's prospects. But much of the industry's response to AMD's joint venture deal with Abu Dhabi's government was skeptical, with some industry observers reluctant to endorse the new Foundry Co. while others doubted whether the new entity can compete in a market dominated by Taiwan Semiconductor Manufacturing Co. Ltd.
Concerns also were expressed about how the new Foundry Co., which Grose is expected to head as CEO, would deal with the potentially fractious issue of intellectual property agreements and cross-licensing between AMD and rival Intel Corp. In fact, some observers assert that Intel could derail AMD's plans if the two companies were unable to resolve issues related to their IP licensing relationship.
Grose addressed some of these issues in an interview with EE Times, explained that the new foundry has a plan for dealing with the IP licensing issue. Grose declined to elaborate.
The CEO-designate also said the new AMD joint venture with Abu Dhabi's Advanced Technology Investment Co. is already looking to beef up its customer roster by pursuing members of IBM's process technology alliance. AMD executives understand they face challenges, but the opportunities available in the outsourced wafer market far outweigh the problems, Grose said.
Below are excerpts from our interview with Grose:
EE Times: What was wrong with AMD's old manufacturing model?
Grose: Clearly the amount of capital required to stay at the leading edge of semiconductor process capability as well as produce the capacity needed for the large volume of microprocessor from an AMD standpoint is a large draw on the financial position of AMD.
This foundry company is a natural evolution if you think about what has been happening in the semiconductor industry over the last 10 to 15 years. The IDMs are migrating away from producing their own technology, going into partnerships as we have and also exiting building their own fabs. And so the foundry market continues to be a very attractive one for companies who want to focus their investment around the design, the architecture, as AMD will, and really leverage their investment differently.