Harsh J

Just read this article about the plans AMD has after their defeat by Intel’s Core platform processors, and even real bad in the servers and workstations share.

Advanced Micro Devices‘ move to cut overhead costs by outsourcing its chip manufacturing business may backfire in the long run, according to several analysts who have downgraded the company’s stock.

AMD is struggling it keep its head above water after posting losses of $611 million and $574 million for its past two quarters. The company has also drawn criticism for its manufacturing, with recent reports that it will delay the full-volume launch of the “Barcelona” quad-core Opteron server chip from July to October.

AMD currently has a deal giving it access to IBM’s chip fabrication plant in East Fishkill, New York. Under that arrangement, AMD can perform much of its research and development without having to incur the cost of owning its own manufacturing plant, he said.

“We are again lowering AMD estimates, this time for 2Q07 (we had previously lowered 2H07), reflecting our field checks suggesting current conditions are weak,” Yeung wrote. While Citigroup recognizes that AMD could be moving away from its own manufacturing and that could help the company cut costs, “we remain on hold for the shares given near-term weakness,” he wrote.

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This sure is a bad news, but I hope the Barcelona does try getting the market back, and same with Phenom. No personal experience with AMD, however. But it is bad to see a company that’s made it so far, start dropping like this.