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Interview with Intel CEO Paul Otellini

Posted on Friday, February 27 2009 @ 01:40:46 CET by

DailyTech published a two-part interview with Intel CEO Paul Otellini. Here's what he has to say about AMD's fabless future, Otellini says the move will definitely impact AMD's future competitiveness as costs will inevitably go up.
Answering a question in regards to the future competitiveness of AMD, Mr. Otellini replied that "The Mubadala guys will want a return on their investment", referring to the purchase of shares by Mubadala Development and "The Foundry Company" spinoff with the Advanced Technology Investment Corporation, both owned by the Emirate of Abu Dhabi. Since the current agreement is for a cost plus contract, AMD's costs will inevitably go up.

It will either mean their prices will go up or their margins will go down. This affects their ability to compete on price, which is the only advantage they have right now. There is no way their production costs will go down.

Intel may provide limited foundry services to Sony, TI, and other companies going asset light. It may offer wafer services and semi-custom cores to some key customers, but Intel won't be competing with TSMC.
You can find part 1 here and part 2 over here.



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