AMD asset lite strategy overview
First, this is not based on any AMD internal document, but my strategic analysis of the situation.
AMD's goal is to take market share at an accelerated rate and with minimum investment. The asset lite strategy has the following key elements.
1) Use foundry capacity for mass production of low end desktop and mobile CPUs. These products have very low margin, it is not worth the investment of expensive tools to produce them. AMD's plan is to outsource the production of these CPUs to TSMC and Chartered. Everyone will be laughing, except Intel. TSMC and Chartered are expected to crank out 30 million K10 X2 and X3 CPUs per quarter, selling at the ASP of $55, with $2 profit each. Of course, AMD's GPU production is already asset lite. TSMC will be involved in the production of Fusion core, driving the PC cost even lower.
2) Use AMD FABs for high margin production. Using APM, Immersion lithography, SOI, exotic processes, AMD will produce high end server, desktop and mobile CPUs in its own FABs. These are the money makers and Intel fraggers.
3) Use Intel FABs for free after 2009. A jury is expected to award AMD $69 billion in treble damages. Intel won't have enough cash, and will have to pay the award with FABs.
4) Intel will have to spend more and more cash on expensive equipment, which leaves little for AMD to collect for judgment.