There are still some interesting questions on this idea including the licensing restrictions currently in place until 2009 between AMD and Intel as well as WHO would be willing to buy the fab business off of AMD in this market.
According to our research, the impetus for this move comes from two sides: the desperate need for money and the oodles of capacity they firm has. Fab 36 is running at a decent enough clip, but 38 next to it sitting almost idle. AMD could equip it, fire up the lines and make chips, but for what buyers? With Luther Park options coming up soon, they will have even more capacity than before, and a huge capital outlay to make the fab. They don’t need the capacity and don’t have the capital.
AMD could simply abandon the Luther Park plans, but there is a billion dollar subsidy attached to it, and that is a lot of money. Even if they only make the fab and sell it, the potential to pocket the cash remains.
So, what do you do? Spin off the fabs to a separate company and sell that to pay off your debt. Silly as it sounds, they did much the same with flash and Spansion. AMD has two state-of-the-art-ish fabs in Dresden and a billion dollar off coupon for upstate NY. Together, they are worth a lot of money, and selling them would pay off the debt AMD has amassed.