As Semicon Sales Sag, AMD Spins off Its Fab Operations
The global economic slump has forced chipmakers into uncharted waters, causing major manufacturers to set new courses.
The Semiconductor Industry Association (SIA) announced Monday that its members' revenues sank again in January, dropping 11.9 percent in just a month. The trade group for the big microprocessor makers said sales for member firms such as AMD, Intel, and Texas Instruments fell from US $21.5 billion a year ago to $15.3 billion in January, a decline of 28.6 percent.
A spokesman noted that January is traditionally a slow month for chipmakers but worried over the lingering economic malaise the world over. "Sales declined across the entire range of semiconductor products, as sales of important demand drivers such as personal computers, cell phones, automobiles, and consumer items remained under pressure," commented SIA President George Scalise.
"This is the worst recession the semiconductor industry has seen since its inception," Sean M. Maloney, the chief sales and marketing officer at Intel, said at a news conference Monday.
Hoping that focusing on its key competencies will turn around its business, AMD this week spun off its own fabrication facilities into a new venture called GlobalFoundries, to be jointly owned by AMD and the Advanced Technology Investment Co. (ATIC) of Abu Dhabi.
In a press release yesterday, the new management of GlobalFoundries said it plans "to drive profound change and expand opportunities" in the chip sector. It noted that the new manufacturing firm becomes the only U.S.-based global foundry services provider currently in operation.
"With two committed joint venture partners providing strong technology and capital resources, our company brings a unique set of global capabilities to the market that will enable our customers to fully unlock their potential to innovate," Doug Grose, the new CEO of GlobalFoundries, stated.
The new fab firm said going forward it will service the manufacturing needs of AMD but will also offer its technologies to third-party customers through its high-volume foundry operations.
It added that GlobalFoundries is proceeding with plans to expand its Dresden, Germany, manufacturing lines by bringing a second 300-mm manufacturing facility with bulk silicon capabilities online later this year. The company also plans to start construction on a new $4.2 billion plant in Saratoga County, N.Y., in 2009.
"Despite the current economic climate, this is an industry with tremendous opportunities for long-term growth and innovation," said Waleed Al Mokarrab, the chairman of ATIC. "Through its global footprint, world-class technology know-how, and access to state-of-the-art research and development, we believe GlobalFoundries is well positioned to challenge for market leadership in this competitive industry."