Germany Lend AMD $262 Million for Dresden Fab

[Kuroimaho]

Well what I am saying is that if the money is spent and nothing is achieved, then they just just a huge sum of money which in the current times that they are in, could take them under or force them to sell ownership.

Sure they need a competitively performing chip no point of expanding the fabs if can't sell what they already make.

 

[benbaked]

I'm curious how AMD writes off 30 million worth of old processor inventory. What did they do with all of those old microprocessors?

 

[AngelfireUk83]

Don't they give them away to charities and paces where PC's can be used for support in education ect.

 

[Kuroimaho]

Chips which worth 30 million for charity ? That's a few hundred thousands chips. I also wonder actually but can hardly imagine where could they give away so many if nobody wanted them in the first place.

 

[AlabamaCajun]

The 262m€ would be 362,08m US$ after the current course.

at least that is around 1/11 of their current depts..

Cool, thanks, not tooo far off.

Ben, more than likely the old chips were devalued and dumped on the market below cost. As for people wanting them, it's more at how cheap do you sell them to move-em out of the channel.

I don't think the money will be misused, the market is just too tight to squander anything off.

 

[aaronjb]

Once again folks, this is par for the course in manufacturing (and in the commercial sector in general). Enticing a company to build a lucrative (for the host country/county/city/town/hamlet economy) plant with tax breaks and grants is nothing new. In any industry. On any day of the week. For any company.

It's amazing what passes for reasoned analysis here.

 

[Mr. Fri]

if i was a german citizen, i would not be too happy about this. this isn't the first large sum of money they have gotten from germany either.

You have to remember that many people in eastern Germany still think with the DDR mindset where the government will save them. It's a lot more common thought process than in the west

Very rarely do goverment bailouts and subsidies have any measurable impact in the near-long-term. Eventually capitalism catches up and the assisted companies die a natural death. Unless, of course, you're a member of a select few industries (such as passenger rail) which subsist soley on government handouts.

The AMD grant (not loan!) from the German government is par for the course in all industries. It's a signing bonus of sorts to ensure that AMD keep building fabs in Germany. This grant is unrelated to AMD's ongoing cash flow issues.

Don't think of it as hurting AMD's opportunity to compete in a capital marketplace. Instead, think of it as Saxony competing with other German states by using good companies like AMD to improve opportunities for their community (state) to grow and become more competitive. Saxony wants to enhance their state by making sure AMD does well. There's a lot of unemployment and a strong AMD is a tool to fight against that.