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It looks like AMD will bite more than the ‘asset-smart’ bullet and go fabless after all, according to comments made by new CEO Dirk Meyer in an interview with the Austin American Statesman newspaper.

AMD is preparing to spin off its manufacturing operations into a new company, which would imply that a new business partner will also be a stakeholder in the manufacturing arm.

Though I doubted any ‘asset-smart’ plan actually existed, the only possible way forward as the company continued to wrestle with heavy quarterly losses was to go fabless.

The time it would take to deal with the Saxony Government over subsidies etc… for the new entity, as well as finding a financial backer to support the independent manufacturing, shouldn’t be underestimated, especially in the current economic climate.

In AMD’s conference call last week it became clear that the ‘asset-smart’ plan was close to being revealed and that it would be a substantial change to AMD’s business model going forward.

We can only speculate at this point who the investor partner in the manufacturing spin-off will be, but thinking back over the last few years, some of the major private equity firms had commented on their interest in the foundry market. Though SMIC was seeking financial support, the company wasn’t interested in being bought outright, but a new foundry in the form of AMD’s Dresden fabs is a great way for these people to get into that market.

Where does this leave the NY fab?

With $1 billion-plus in potential subsidies, that fab may still proceed under the spun-off new entity, but it doesn’t immediately look good.

As any asset-lite company will tell you, it takes time to the tune of 12 to18 months before you can prime your preferred foundry(ies) to start volume production. AMD doesn’t have that problem using the Dresden 300mm fab and the new bumping facility next door. Chartered Semiconductor remains in place for excess capacity requirements so the transition should be done before the year-end.

So AMD’s asset-smart strategy looks like fabless after all.