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AMD makes joint x86 venture with China, earning them $293 Million

AMD makes joint x86 venture with China, earning them $293 Million

AMD makes joint x86 venture with China, earning them $293 Million

AMD makes joint x86 venture with China, earning them $293 Million

 

Ever since the Snowden leaks a lot of companies and governments have been very cautious when it comes to potential "back-doors" and vulnerabilities in their own technology, this has, in turn, made China want to not just own their own software ecosystem, but their hardware as well. 

Creating your own hardware is complex, requiring Chinese companies and institutions to licence the IP from western companies allowing them to add their own "special sauce" into the mix for enhanced security. This allows China to create their own chips for Chinese server OEMs, which they can rely upon to be free from any potential backdoors or vulnerabilities. 

AMD has just announced that they have made a deal which partners them with a combination of both public and privately owned Chinese companies which licences high-end server architecture and products.  The Chinese company is called THATIC, Tianjin Haiguang Advanced Technology Investment Co. Ltd, will licence x86 designs, SoC technology and several other select IP from AMD to allow them to create their own server platform, including CPUs, controllers and high-speed interconnects. 

This deal will earn AMD a minimum of $293 million in cash if AMD can deliver their IP on time, which is enough to cover the losses of the last few quarters from AMD and all the chips created from the Chinese will be giving AMD Royalties, which will provide AMD with additional cash flow moving forward.  

  AMD makes joint x86 venture with China, earning them $293 Million    

AMD are only providing their IP here, so AMD will not have to front the costs of designing or manufacturing AMD any chips for the Chinese, so AMD is set to earn a lot of money from their IP in the future without a lot of cost to the company. 

Right now it is unknown what IP AMD are licencing to the Chinese, but AMD will need to licencing some of their modern architectures in order to make the most out of this deal. 

This deal will extend AMD's reach into the server market, without having to spend hundreds of millions designing and manufacturing their own chips while also giving them increased cash flow through royalties after the initial licencing fees run out. 

Intel has had several deals with China blocked in the past when it has come to providing Xeon CPUs to Chinese companies for Supercomputing tasks, but with AMD licencing their technology to China AMD does not need to about such intervention, as china will be building their own server chips.   

This deal will help AMD greatly when it comes to returning to profitability, hopefully giving them the money they need to keep up with their competitors moving forward. 

 

You can join the discussion on AMD's licencing their x86 technology to Chinese companies on the OC3D Forums

 

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Most Recent Comments

22-04-2016, 11:19:13

NeverBackDown
Few things to note. They are licensing ARM and X86 designs.. X86 designs for them are very tricky, as there agreement with Intel prevents them from doing so. However they said they have structured a deal that does not infringe with the agreement. But we will see how that goesQuote
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