Jobs assured despite Penang plant sale: AMD CFO

  • Sale to China firm won’t result in reduction in workforce, says Malaysian-born CFO
  • Malaysia still plays a key role for AMD, with global hub and data centre still here
Jobs assured despite Penang plant sale: AMD CFO

ADVANCED Micro Devices Inc (AMD) said that it will be business as usual for the employees in its Penang manufacturing facility, even though the US-based chipmaker has sold an 85% stake in the 30-year-old plant to China’s Nantong Fujitsu Microelectronics (NFME).
According to AMD chief financial officer (CFO) Devinder Kumar (pic above), the Penang plant may even play a bigger role moving forward, as NFME aspires to move up the ranks in the global outsourcing semiconductor assembly and testing market.
“We don't expect any reduction in workforce. In fact, there is potential for further collaboration and expansion, depending on how Malaysian agencies and ministries work with China.
“After all, this [the Penang plant] will be the first electronics company in Malaysia that is majority-controlled by a mainland Chinese entity,” he told Digital News Asia (DNA) in an exclusive interview in Kuala Lumpur recently.
In October, AMD and NFME entered into a definitive agreement that saw NFME buying an 85% stake of AMD’s assembly and testing facilities in Penang and Suzhou, China for US$371 million. Post-transaction, AMD will still retain a 15% stake in each facility.
The joint-venture, which will involve 1,700 employees in both facilities, will be well positioned to take advantage of the increasing demand for semiconductor assembly and test services (SATS), according to Devinder.
Citing Gartner’s Research Forecast: Semiconductor Assembly and Test Services, Worldwide, 3Q15 report, he said SATS market revenue is expected to be US$27.4 billion this year, and is expected to grow to US$34 billion by 2019.
AMD also signed a five-year manufacturing service agreement with NFME, under which AMD will purchase its requirements for back-end processing services for products currently processed at the two facilities. AMD will not be obligated to purchase the services for new products.
Malaysia still key for AMD
Although it has sold a majority stake in its Penang facility to NFME, Devinder stressed that this was not a sign of its lack of confidence in Malaysia.
In fact, Malaysia still plays a major role in AMD’s operation globally, argued the Malaysian-born CFO.
Devinder has a bachelor’s degree in ecology from the University of Malaya; a master’s degree in biology from the University of California in Santa Barbara; and an MBA in finance from the University of California, Los Angeles.
He joined AMD in 1984 as a financial analyst, and spent 10 years in Asia as financial controller for AMD Penang and group finance director for AMD’s Manufacturing Services Group across Singapore, Thailand, China and Malaysia, before moving on to a corporate position.
He was appointed AMD CFO in January 2013, and treasurer in April 2015.
Devinder pointed out that AMD has two global services centres, one in the United States and the other in Malaysia. These centres serve the company’s internal global network in areas such as finance and accounting, IT, HR (human resources), procurement, and other business services.
“In terms of our global services centre in Malaysia, we have operations in Penang and in Cyberjaya. We have about 400-plus employees focusing on the non-manufacturing aspects of AMD,” he said.
In fact, Devinder said the group’s global services centre is also looking at growing its headcount over the near term.
“There are some services that the joint-venture will need from AMD because of the nature of the relationship. The global services organisation will grow by about 10% in terms of headcount,” he said.
Besides being one of its two hubs for global services, Malaysia is also home to one of AMD’s two data centres.
“At one point, we had more than 20 data centres globally. Then we embarked on a consolidation exercise, and today, we have two data centres – one of which is in Cyberjaya,” he noted.
Next Up: Getting back on the path to profitability
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