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Old 04-08-07, 06:23 PM   #21
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Default Re: AMD layes off employees,in seeking cost savings

Originally Posted by Redeemed
Well, hopefully they will recover from that. They've been beaten pretty hard before and still pulled through. Here's hoping that they will manage to pull through yet again.
Well things was not the same as it were 10 years ago, it easier for AMD to invested a few hundreds millions dollars in R&D and get $500m to $800m loan to build a fab in 1997. But since 1997 the economy were changed, science and technologies getting more and more advanced all the times, the R&D and fab costs soaring every year. This time AMD are find it very hard to invested more than $1bn in R&D and more than $1.5bn loan to use existing 2 fabs and dont forget the rest costs goes on fabs upgrades & conversions like from 90nm to 65nm. If AMD want to build 3rd fab to produce 32nm, it will cost the company $3bn and process smaller than 32nm will cost $3.5bn and beyond that AMD are no way can afford it, here is only one company can afford to build 32/22nm fabs is Intel.

AMD likely will not survive through end of 2007 and beyond without raised extra $1bn need to help pay off $3.8bn debt repayments because by end of June they will have just about $600m cash left. AMD will spent $200m in July, another $200m in August and last ever $200m for September while stock still lose money and profits plunge. I think it are too late for $6.8bn AMD to recover the long way up to $24bn it was worth back in Jan and Feb 2006, they are not fit to have another price war with Intel after June when they response AMD 65nm Barcelona with Intel 45nm Penryn and then in 2008 with 45nm Nehalem core with up to 8 cores on a die that has answers to AMD on-die memory controller, HyperTransport and also AMD Fusion due in 2009, late again.

Things could get much worse if AMD decide to delay supply R600 and Barcelona due to AMD inventory problem they struggling to get clear obsoleted 90nm products then AMD could fold sooner than end of September if they still cant make money from obsoleted 90nm products that nobody want it.
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