Intel Corp (INTC)

[TomH7259]

AMD Defabbing

We explain why it doesn't make much conventional business sense, and why it will probably happen anyway.

http://www.overclockers.com/tips01170/
As we've shown, fabbing down or even fabbing out isn't any financial panacea. In the long run, it will cost AMD more, not less money to let others make their CPUs.

So why would finance business advocate actions that will increase, not decrease costs?

There's one very good reason that's very bad for AMD as we've known it. Getting rid of the fabs makes little sense if you think AMD can run them and sell what they make very profitably.

But if you don't . . . .

This is nothing less than a vote of no confidence in the company and the way it does business.

What these proposals in essence say is, "You've never been able to make serious money consistently doing it the old-fashioned way, certainly not enough to justify the billions in investment.

"Well, the gravy train is over. Your way doesn't work. Now you're going to try it our way. Sell your assets (and not so incidentally pay off your debts to us) and let's see if you can make money without our billions. If you can't, well, we got ours back, Jack, sounds like a personal problem to me."