Quote Originally Posted by JF-AMD View Post
I can't speak for GF because I don't work for them, but think about the remoteness of the option to move away from AMD.

AMD is their largest customer. You make money in a fab business by keeping the fab running at 100% at all times. That allows you to depreciate the fab quicker and get on to the next process.

Who, exactly, would they replace AMD with? Who else in the business could replace that much business that quickly? If they moved away from AMD, they would have a very expensive fab sitting at low utilization and that would be very costly. GF and AMD have a vested interest in working together. All of the people thinking that somehow this deal is bad for AMD don't really understand how the financial aspects of running a fab work.

Fabs are most profitable when they are at 100% utilization. They have massively high fixed costs, and relatively low variable costs. So the quicker you can run through enough wafers to offset the fixed cost, the quicker you can get to the next node. By having AMD and other companies together GF can keep the fabs running around the clock, diversify their process technologies and increase their access to IP. All of that makes them more competitive.

Dropping customers, running low utilization and starting/stopping the lines will make the fab less profitable. There is a finite number of companies that you can strike a foundry deal with, so the last thing you want to do is lose one of the big dogs.
Not to nit-pick, b/c I agree with what you are saying, but the "who" that GF could sign would be ARM customers. ARM chips are like grains of sand compared to desktop CPUs. They are everywhere, in everything.

Sign a big enough ARM design (say Qualcomm and cell phone products), and they could potentially load up the fab with no need for AMD.


Just speaking hypothetically, don't flame me for it.