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The mystery that is AMD Fab 38

13 November 2007 | By Mark Osborne | Editor's Blog

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Several emails made their way to me yesterday, as did a few more this morning, that include some stories citing John Lau, a semiconductor analyst at New York-based Jefferies & Co., as saying that AMD is negotiating the sale of Fab 38 (previously Fab 30, 200mm) to TSMC. 

I was actually in Dresden only last week and got the chance to briefly talk to Udo Nothelfer, VP of Fab 36, AMD’s 300mm facility and one of the original Dresden start-up engineers for AMD’s operations in Dresden 10 years ago.

He said that a small tool set was being installed at Fab 38 to assist in the qualification of AMD’s 45nm process that was currently in pilot production at Fab 36. No mention (as expected) that executives could be in talks to sell the fab!

With that said, it is interesting that TSMC’s name keeps popping up whenever a fab is being touted for sale. We had this recently with TSMC and Hynix with regard to 200mm fabs and with Atmel’s 200mm fab in the UK.

In each of these cases, the negotiations were actually about purchasing 200mm tools for its (TSMC’s) China fab which is massive and expanding very quickly to cater for trailing-edge CMOS chip demand from a wide base of customers, both fabless and IDM.

It should also be noted that TSMC has only three fabs outside of Taiwan: one 200mm fab in the US (200mm), one new 200mm fab in China and a JV fab with Philips (NXP) in Singapore. The US fab has never been a jewel in its crown, while the low cost basis of China is far more lucrative for TSMC.

TSMC has had many opportunities to buy decent-sized fabs in Europe in the past and has never done so!

I don’t actually know if all the 200mm tools for Fab 30 were actually sold to the Russians, so there could be negotiations over certain tools that TSMC may be interested in rather than the fab itself if any are hanging about.

Granted, we also have the overhanging issue of what Hector Ruiz is planning as far as an asset-lite strategy goes, which always includes closer foundry relationships. Perhaps - and this is pure speculation at this time - AMD has said to TSMC that if it wants its microprocessor business (a percentage thereof), then purchase or come in on a JV footing with Fab 38 and run our 300mm SOI wafers while you can run other customers’ Bulk CMOS processes – customers such as NXP, STM or CSR, perhaps!

But that all makes a mockery of the Chartered and Common Platform Alliance work of which AMD has been and still is a firm supporter.

It all seems a mystery to me at the moment, as the logic required to go along with the initial rumors seems to me to be fundamentally flawed. The simple gossip that TSMC is negotiating the purchase of Fab 38 - or the other way round - doesn’t actually matter!

What isn’t so illogical is that the rumor is being spread by John Lau at Jeffries & Co. Lau is very much in the Intel Corp. camp. Perhaps more time spent in Dresden talking to AMD people would have prevented the Chinese whisper phenomenon, as the rumor didn’t travel that well across the Atlantic.

AMD is expected to give an update to its asset-lite strategy next month, but as usual, the longer the wait, the more ridiculous the rumors will get. This current rumor isn’t ridiculous it’s just flawed based on its simplicity.

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