Why AMD’s Arab Joint Venture Matters
The spinoff of Advanced Micro Devices’ chip production into a joint venture with the Advanced Technology Investment Co. (ATIC) marks one of the more interesting technology shifts in recent years–and one that could have a significant effect on processor pricing and the competitive landscape over the next decade.
By opening its fab to outside business–basically turning the fab into a commercial foundry–AMD and its partner can potentially generate a reasonable profit. That also takes one of the major cost centers out of AMD’s business, leaving it with the processor design and sales business and a much lower cost model. And with the deep pockets of its U.A.E. partner, not to mention strong business connections across northern Africa, AMD could eke out a comfortable living for years to come. At the very least, the competitive stakes with rival Intel will be raised, and that generally benefits consumers of technology both in cost and in technological advancement. Even Intel has been pushing more of its processor production to commercial foundries over the past several years, driven by the high cost of building a new fab.
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