Mark LaPedus Courtesy of EE Times (08/08/2008 3:28 PM EST)

For some time, Advanced Micro Devices Inc. has been talking about its asset lite efforts, without providing any concrete details about its plans. As previously reported, AMD can no longer afford to keep up with Intel Corp. in IC manufacturing, forcing the troubled microprocessor vendor to devise a new fab-lite--or fabless--strategy in order to focus on design.

But AMD's constant leaks about its asset lite plans are getting tiresome. By the time AMD announces its asset lite strategy, will anyone care?

The public won't care. AMD's customers might. Its foundry partners are certainly paying close attention. Singapore's Chartered Semiconductor Manufacturing Pte. Ltd. is handling some foundry business for AMD. Hard to believe that Chartered's volumes are large for AMD. Meanwhile, Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) is making devices for AMD's graphics chip unit, ATI.

In the future, AMD is supposedly planning to split the company into two parts. It will supposedly spin out its manufacturing unit, turning AMD into more or less a design house.

The manufacturing spinoff may take ownership of AMD's fabs, especially its leading-edge plant in Dresden, Germany. Reports have surfaced in the media that AMD will also have its parts made on a foundry basis by Chartered, TSMC and possibly United Microelectronics Corp.

Sources say otherwise. TSMC is expected to get the lion's share of AMD's foundry business--leaving Chartered on the outside looking in, according to one source. Chartered may make some of AMD's products, but the many of AMD's key parts have already migrated to TSMC's fabs, according to the source.

In any case, the strategy is risky. There is little or no evidence that a foundry can keep up in the high-volume processor game against Intel. Foundries can make processors, but they have typically worked with small, third-tier suppliers over the years. Competing with Intel is a different story.

On second thought, there's a good change the strategy will succeed. By the time AMD makes its asset lite announcement--and based on the company's recent execution--the processor vendor could lose what's left of its status and become a second- or third-tier player.

Maybe not a third-tier player, but one that is fighting to stay relevant.

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