http://www.heise.de/newsticker/meldung/73529

Link is in German...

On Thu, 25 May 2006 14:45:01 GMT, Jan Panteltje <(E-Mail Removed)>
wrote:

>
>http://www.heise.de/newsticker/meldung/73529
>
>Link is in German...

Isn't it about time they thought of a different location?

--
Rgds, George Macdonald

> Isn't it about time they thought of a different location?

You'd think so, but I'm having a hard time coming up with new
candidates. Unlike Intel, AMD doesn't have a far flung international
presence.

It doesn't make sense for them to open up fabs in random countries...so
it boils down to the US and Germany (since they are already there). I
think if you have a fab in a country, you end up needing to make major
investments there as well.

Perhaps you might say, India would be strategically wise, and perhaps
it would...but I think AMD is a very conservative company, because any
mistep would have (and perhaps still will) result in insolvency.

Germany and the US are safe...many other options would be too expensive
or too risky.

DK

On Thu, 25 May 2006 20:14:43 -0400, George Macdonald
<fammacd=!SPAM^(E-Mail Removed)> wrote:

>On Thu, 25 May 2006 14:45:01 GMT, Jan Panteltje <(E-Mail Removed)>
>wrote:
>
>>
>>http://www.heise.de/newsticker/meldung/73529
>>
>>Link is in German...
>
>Isn't it about time they thought of a different location?

There are a number of benefits to building in the same area as an
existing fab, particularly when it comes to fab support and
infrastructure. Materials support, contractor support, vendor
support, relationships with local authorities, tax breaks, experienced
employee pools, shared internal support systems, and so on. All this
can cut the costs a good bit, improve the margins, and provide a
faster ramp.

Silicon Valley is now dead as a fab center because so many of those
things have petered out and moved to more viable locations. Intel's
flash development/production fab D2 is the last big fab in Silicon
Valley, and it's not very big by today's standards. It's also 200mm -
I don't think there's any 300mm in Silicon Valley, and I doubt there
ever will be. End of an era, and a bit of a shame.

Intel's a good bit more spread out, partly to avoid disabling
disasters, but they're constantly expanding at the existing sites -
Chandler, Rio Rancho, Leixlip, and Aloha/Hillsboro all started out as
smaller fabs (both in capacity and wafer size), and have been expanded
or are expanding to high volume 300mm fabs for the reasons above.

The downsides of too much expansion in one area include the risk of
local disasters disabling the bulk of your production, raising
property values that make it harder to attract workers, and stretching
the resources too thin, but money attracts solutions to everything
except the disaster avoidance.

Their other options are the existing sites in the US, but there are
issues with those. The old Sunnyvale Development Center and the
Austin fabs are Spansion now, I believe (and still 200mm), and their
old San Antonio fab was bought out by Sony, IIRC. Austin's probably
the best bet, but retrofitting old fabs from 200mm to 300mm is an
expensive challenge even if Spansion weren't using them, and I don't
know if they have enough land there (or local government support) to
build a greenfield fab.

max

On Thu, 25 May 2006 20:14:43 -0400, George Macdonald
<fammacd=!SPAM^(E-Mail Removed)> wrote:

>On Thu, 25 May 2006 14:45:01 GMT, Jan Panteltje <(E-Mail Removed)>
>wrote:
>
>>
>>http://www.heise.de/newsticker/meldung/73529
>>
>>Link is in German...
>
>Isn't it about time they thought of a different location?

For a while they almost opened one here with TSMC but that deal fell
through for whatsoever reasons. Maybe it's because Chartered (CSI)
convinced them to just use them (CSI) instead of opening their own.

--
A Lost Angel, fallen from heaven
Lost in dreams, Lost in aspirations,
Lost to the world, Lost to myself

On 25 May 2006 20:00:22 -0700, "David Kanter" <(E-Mail Removed)> wrote:

>> Isn't it about time they thought of a different location?
>
>You'd think so, but I'm having a hard time coming up with new
>candidates. Unlike Intel, AMD doesn't have a far flung international
>presence.

They're not exactly parochial.:-) Chartered will of course be a Far East
source which is also on the doorstep of the existing AMD packaging plant -
if you look a bit harder I'm sure you'll see that there are many potential
regions with a suitable investment profile.;-)

>It doesn't make sense for them to open up fabs in random countries...so
>it boils down to the US and Germany (since they are already there). I
>think if you have a fab in a country, you end up needing to make major
>investments there as well.

And, in AMD's case, sucking up tax credits and low-cost loans... in one
location.

>Perhaps you might say, India would be strategically wise, and perhaps
>it would...but I think AMD is a very conservative company, because any
>mistep would have (and perhaps still will) result in insolvency.

There are many places with a viable workforce/infrastructure profile - fabs
get shut down, resold, reallocated to foundry, etc. etc. all the time.
"Insolvency"?... more FUD!... so transparent.

>Germany and the US are safe...many other options would be too expensive
>or too risky.

I suspect that their 2nd build stretched the EU's tolerance as far as it
can go on "incentives" - Intel has had similar issues in IE and did not get
desired benefits the last time. Even the West Germans are getting sick of
the East German lame duck.

--
Rgds, George Macdonald

> They're not exactly parochial.:-) Chartered will of course be a Far East
> source which is also on the doorstep of the existing AMD packaging plant -
> if you look a bit harder I'm sure you'll see that there are many potential
> regions with a suitable investment profile.;-)

Ok, why don't you tell me where? I'm too lazy to look.

> >It doesn't make sense for them to open up fabs in random countries...so
> >it boils down to the US and Germany (since they are already there). I
> >think if you have a fab in a country, you end up needing to make major
> >investments there as well.
>
> And, in AMD's case, sucking up tax credits and low-cost loans... in one
> location.

There's that too...

> >Perhaps you might say, India would be strategically wise, and perhaps
> >it would...but I think AMD is a very conservative company, because any
> >mistep would have (and perhaps still will) result in insolvency.
>
> There are many places with a viable workforce/infrastructure profile - fabs
> get shut down, resold, reallocated to foundry, etc. etc. all the time.
> "Insolvency"?... more FUD!... so transparent.

You think that's FUD huh? That's good for you, but there happen to be
a couple of folks at AMD that agree with me. Given their position, I'm
much more inclined to believe it was truth.

What do you think would have happened to AMD if they had screwed up the
K8? I don't have any doubts in my mind that if a screw up happened at
AMD back in the K6/K7 days, AMD had a very good chance of going out of
business or being totally screwed and unable to compete in the future.

Today, that may or may not be true, it's hard to tell b/c their
financial situation is a bit better. However, I think the improvement
is really in their income/revenue. They still have a lot of debt
floating out there...

> >Germany and the US are safe...many other options would be too expensive
> >or too risky.
>
> I suspect that their 2nd build stretched the EU's tolerance as far as it
> can go on "incentives" - Intel has had similar issues in IE and did not get
> desired benefits the last time. Even the West Germans are getting sick of
> the East German lame duck.

That's another reason I was surprised. I would have expected them to
try and get discounts out of another country...it seems like Germany
would be somwhat less generous this time around.

DK

On 26 May 2006 17:44:55 -0700, "David Kanter" <(E-Mail Removed)> wrote:

>> They're not exactly parochial.:-) Chartered will of course be a Far East
>> source which is also on the doorstep of the existing AMD packaging plant -
>> if you look a bit harder I'm sure you'll see that there are many potential
>> regions with a suitable investment profile.;-)
>
>Ok, why don't you tell me where? I'm too lazy to look.

Wha? Ya want me to set up the ducks for ya?Ô_ô

If you know the industry at all, it doesn't take much looking - you've
already mentioned India and AMD does have some hook-up there with govt.
sponsored programs. Far East is already covered by Chartered so maybe they
don't need a 2nd fab in that region; then again with the size of the China
market alone, maybe it would be right... so just about any place on the
western Pacific rim.

As for Europe, there's a huge pool of skills and experience in terms of
workforce; a good strategic location would possibly be Northern Italy...
close to Soitec. In the timeframe of any new fab, if "incentives" are
important, some of the Eastern European countries, e.g. Bulgaria, will have
a good base of existing plants.

I tend to think they should look harder in the U.S. where the workforce,
with a common language, is accustomed to moving around to where the work is
- it would also fend off any hint of exclusively furriner influence in
AMD's products.

>> >Perhaps you might say, India would be strategically wise, and perhaps
>> >it would...but I think AMD is a very conservative company, because any
>> >mistep would have (and perhaps still will) result in insolvency.
>>
>> There are many places with a viable workforce/infrastructure profile - fabs
>> get shut down, resold, reallocated to foundry, etc. etc. all the time.
>> "Insolvency"?... more FUD!... so transparent.
>
>You think that's FUD huh? That's good for you, but there happen to be
>a couple of folks at AMD that agree with me. Given their position, I'm
>much more inclined to believe it was truth.

They wouldn't happen to be called Hector or Dirk would they?? Which hat
were you wearing when they "agreed" with you?.... Web-journo?... industry
pundit?... Intel fanboi?:-) I'm sorry but your undocumented, anonymous,
authoritative "sources" carry about as much weight as the "little bird".

>What do you think would have happened to AMD if they had screwed up the
>K8? I don't have any doubts in my mind that if a screw up happened at
>AMD back in the K6/K7 days, AMD had a very good chance of going out of
>business or being totally screwed and unable to compete in the future.

Fortunately for AMD, Intel was the one who "screwed up"... though they seem
to have made a success of operations in Ireland. Who woulda thunk it? A
less than optimal location for a fab is hardly the misstep which is going
to sink AMD.

>Today, that may or may not be true, it's hard to tell b/c their
>financial situation is a bit better. However, I think the improvement
>is really in their income/revenue. They still have a lot of debt
>floating out there...

Everybody has debt. The point is that AMD has a pool of talent & skills
and manufacturing momentum which, in the case of a major financial crisis
*might*, at worst, lead to a merger or takeover. That's not what I'd call
insolvency.

>> >Germany and the US are safe...many other options would be too expensive
>> >or too risky.
>>
>> I suspect that their 2nd build stretched the EU's tolerance as far as it
>> can go on "incentives" - Intel has had similar issues in IE and did not get
>> desired benefits the last time. Even the West Germans are getting sick of
>> the East German lame duck.
>
>That's another reason I was surprised. I would have expected them to
>try and get discounts out of another country...it seems like Germany
>would be somwhat less generous this time around.

For someone claiming to understand the situation your grasp of it is umm,
meagre. This is not about a German choice, though if you read the comments
to the above story, there are Germans asking "why Saxony again?"... "why
not Bavaria?", etc. etc. No the block here is the EU which has rules about
regional economic needs for stimulation and the allocation of subsidies by
member states. There are plenty of other regions in Europe with an under
employed workforce with experience in electronics manufacture, following
fairly recent pull-outs & closures; in fact there are empty modern fab
buildings sitting idle all over the place. I kinda think they're going to
want to raise a ruckus over this... and there are plenty of meddlesome
"high officials", bureaucraps & politicians around in the EU to listen.

--
Rgds, George Macdonald

On 25 May 2006 20:00:22 -0700, "David Kanter" <(E-Mail Removed)>
wrote:

>Perhaps you might say, India would be strategically wise, and perhaps
>it would...but I think AMD is a very conservative company, because any
>mistep would have (and perhaps still will) result in insolvency.

India? Puhhleeease... The main attractiveness of India is dirt-cheap
semi-skilled workforce. I can't call them skilled because anyone with
something close to real skill already got a green card or at least
H1/L1/whatever other loophole in US immigration policy or EU
counterpart thereof. I've seen code written in India and I wouldn't
like to be the one to support it, to put it lightly. And that's done
by "most experienced top-flight experts" as the outsourcing company
represented them - when I had a chance to talk to them, they sounded
like boys fresh from basic training. Very dogmatic, with some
relatively good (or should I say freshly-memorized?) knowledge of the
product capabilities (the product happened to be MS .NET) and no idea
beyond training manual as to how these capabilities apply in real
world.

Fabs are not labor-intensive, and have less tolerance to semi-skilled
labor - they require real skills as the consequences of errors may be
dire and can't be fixed with a few extra lines of code overnight. The
savings on the wages just don't warrant the extra risk and
inconvenience of doing business in 3rd world. What fabs require is
solid infrastructure, not intermittent electricity and water supply,
and even that of questionable quality.

Intel tried to outsource a part of its core business to India, namely
development of the new generation of server chips and interconnect
that mimics HT - we all know the result. And as you correctly noted,
a misstep of this scale on AMD part may easily result in Chapter 11.

NNN

David Kanter wrote:
> Perhaps you might say, India would be strategically wise, and perhaps
> it would...but I think AMD is a very conservative company, because any
> mistep would have (and perhaps still will) result in insolvency.

AMD has a partnership in India as well. A couple of plants are going up
there, the first of which will be an ATP plant, and the second one will
be a full fab.

Yousuf Khan