Intel Corp (INTC)

[Saturn V]

The key assumption in the "Asset Light Model" is that AMD will be able to buy wafers at a lower cost from Foundry Company than from itself. The Foundry will be able to make it cheaper only if it finds new customers who can help pay a part of the overhead costs of the fabs.

So the key is to find other customers. One obvious customer will be IBM Microelectronics. Or Customers of IBM Microelectronics who need more volumes than IBM is capable of. These customers are Qualcomm and NVDIA, who have to go to Chartered or Samsung to get volume shipments of designs developed on the non-SOI IBM processes.

That obviously requires cooperation from IBM. I am surprised that IBM does not figure in the deal at all. I would have expected IBM to have some kind of an equity stake in Foundry company. Maybe IBM has no money.

Another issue is NVDIA. Will it be happy getting Wafers processed by a company which has is partially owned by its competitor. I guess that AMD will sell its stake in the Foundry as soon as the financial markets stabilize. AMD will need the money anyway.