Advanced Micro Devices (AMD) may have trouble making
money from its Intel-based processors, the company could soon be reaping
in a handsome gain from making PowerPC chips. Motorola is reportedly in
talks with AMD to use some of its most advanced chip fab facilities in
Dresden, Germany to produce Motorola’s G4 PowerPC chips.
Neither company has confirmed a deal involving AMD making the G4
processors is imminent. Motorola’s inability to manufacture the G4s in
sufficient quantity has already caused Apple Computer to announce this
week that its profits will suffer from the shortage of the chips. A G4
deal will help Motorola catch up to Apple’s booming demand for G4
processors. Apple has a backlog of several hundred thousand G4 computers.
The deal would also help cash-strapped AMD generate an infusion of
money and make better use of the available capacity of its Dresden plant,
which will also produce the new K7 Athlon chips. The Dresden plant uses
advanced copper interconnect manufacturing processes developed by Motorola
and provided to AMD under the terms of a seven- year agreement struck in
July 1998. AMD plans a grand opening of the $1.9 billion state-of-the-art
German plant next month and will begin commercial production of the Athlon
chip these early next year.