Advanced Micro Devices Inc. has unveiled long-awaited details of the company's asset-lite manufacturing strategy, which the microprocessor and graphics IC manufacturer has been developing for more than one year.
Dirk Meyer, AMD's president and CEO, talked at length about the benefits of the new plan, and the potential impact on the semiconductor industry, during a conference call with reporters on Tuesday (Oct. 7).
AMD CEO Dirk Meyer
On the likely impact on AMD and the semiconductor industry:
"This plan will help us transform AMD and the semiconductor industry. The combination of the [spinoff of the manufacturing facilities and investments in AMD] will result in a financially stronger and more tightly focused AMD, unlocking the value of our manufacturing assets with a solid commitment to expanding those assets to meet the growing demand for global, leading-edge foundry services in the semiconductor industry."
Financial implications for AMD:
"We would see an immediate improvement in our unconsolidated balance sheet and liquidity of $2.8 billion, including Advanced Technology Investment Co.'s $700 million investment towards ownership in the foundry business, the transfer of roughly $1.2 billion in debt to the new [foundry] and $314 million for the purchase of additional AMD equity by our partner and investor Mubadala Development Co."
Meyer continued: "The benefits of these transactions for AMD go well beyond financials. With the transaction, AMD is assured of access to leading-edge manufacturing processes without the capital expense requirement that comes from owning a world-class manufacturing operation. We can now intensify our focus on serving our customers as the only company capable of delivering both world class CPU and graphics designs for next-generation computing and digital media platforms."
On the role of Hector Ruiz in the transaction:
"IBM has welcomed the new foundry company into its technology alliance. Congratulations to [AMD executive chairman] Hector Ruiz. Thank you for your patience, your leadership and your tenacity. This event [and] your vision will go down as certainly the most important transaction in the history of AMD and one of the most important in the history of the semiconductor industry."