Wednesday, 20 June 2007

AMD May Outsource Chip Production

The world’s second largest chip maker AMD, may outsource chip manufacturing to third parties to save on fabrication costs.

AMD, facing revenue crunch due to increased competition from its much bigger rival Intel has been reducing prices of its chips to increase market penetration.

AMD spokesman Drew Prarie said the company was trying to focus its efforts on developing chips instead of manufacturing them.

AMD already uses manufacturing capacities of Singapore based contract manufacturer Chartered Semiconductor to produce some of its chips; however, the amount of such products is not really significant. At the same time, AMD has been facing shortages of its own manufacturing capacities for years and, due to the fact that development of new manufacturing technologies gets more complicated and expensive, while building of fabs is becoming more expensive too, outsourcing may turn out to be a solution for AMD.