 At an analyst event in New York, AMD executives gave final capital expenditure figures for 2007 coming in at $1.7 billion, several hundred million more than many market analysts had expected after announcements by AMD earlier in the year that CapEx would be cut by $500 million.
Executives noted that the initial ramp of 45nm technology in the first half of 2008 meant that CapEx spending would be front-end-of-year loaded though overall spending would be down significantly at $1.1 billion in 2008. The majority of next year's budget would be spent on 45nm-and-below-capable tools. The company claimed that the manufacturing efficiencies and high yields experienced at Fab 36, coupled to the fab's being fully fitted out, meant that CapEx plans were ahead of schedule, allowing for a greater reduction in spending. AMD’s decision several months ago to halt tool installation at Fab 38 and stop 200mm production completely at the fab also contributed to the spending reduction. The last 200mm patterned wafers at Fab 38 left the facility a month ago, executives noted. Contrary to many news reports of late, AMD has not secured the complete sale of the 200mm tool set from Fab 30 (now Fab 38). Tools have started shipping out but assets of approximately $600 million remain on AMD’s books of which a strong proportion is believed to be tied up in the redundant 200mm tools remaining. Executives noted that one of the goals in the coming months is to arrange the sale of the remaining tool assets as quickly as possible, though no potential buyers were named. AMD expects to start shipping microprocessors sometime in the second half of 2008 employing its 45nm process. With the initial ramp secured, the complete migration from the 65nm node to the 45nm node is expected to take 9 to 12 months, executives noted at the financial analyst meeting.
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Comment by GUEST on 2008-01-09 16:10:05
Does anyone know how much of the 1.7B is spent on back-end equipment, specifically ATE? | Comment by GUEST on 2008-01-02 14:50:36
I disagree with the first comment: going fabless is simply not an option for AMD at this point in time. I do not consider myself very knowledgeable in the field but it's obvious that the poster above is even more ignorant. There are significant problems to overcome for AMD if they decide to go fabless and considering the current state of affairs this is not the right time. I also believe that being dependent on third parties will greatly limit their execution possibilities (although this is debatable).
What I do know is that this company has been literally ruined by current management (hello Mr. Ruiz...) who seems completely oblivious to criticism. | Comment by GUEST on 2007-12-18 10:32:20
The real question is not whether AMD can ramp up 45nm. This is a given fact since everyone else seems to be ahead of them at that node. The issue is will AMD be able to make money at 45nm in light of mounting debt, increased borrowing costs and nearly closed capital markets. AMD is headed on a collision course to a major pack of ice of low market valuation. Their executive team seems oblivious that their only option left is to go fabless or sell themselves to a suitable EU based suitor capable of a large scale recap. Intel wrapping up 45nm and moving full steam ahead to 32nm simply puts the nail in the coffin. This is really bad news for IBM, Sony, Albany Nanotech, Saratoga Springs and eventually for Dresden. The demise of AMD will be regarded as one of the best examples of a company crashed by a management team refusing to embrace innovation by leading early on fabless design of microprocessors. Who will replace AMD? | Comment by GUEST on 2007-12-18 10:30:34
Does anyone knows if the 32nm tools in this CAPEX include some of those to be deployed in Malta, NY? A week ago AMD bought an option for a parcel of land for the future Saratoga Co NY Fab. I'm trying to determine how committed is AMD to the NY project for which they are receiving over $1.2 B in NY State subsidies, $600M of that in hard cash. The subsidies package expires in early 2009. There are lots of people trying to determine whether AMD will be merged, taken private buy a private equity fund, or remain as a going concern until its end. |
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Fab management 
