Does it make sense that AMD would build a 3.2 billion dollar plant when, as a publicly traded company, the only have a market cap of 4.3 billion? ... And a Net Income of -396 million?

The NYS incentives almost seem small change.

Here is another article:
http://www.timesunion.com/AspStories/storyprint.asp?StoryID=649508



Here are the financial stats:
http://finance.google.com/finance?client=ob&q=AMD

Financials (In millions of USD)
Total Revenue 1,632.00
Gross Profit 669.00
Operating Income -226.00 -47.00 232.00
Net Income -396.00 -166.00 165.00
Balance Sheet
Total Current Assets 3,543.00
Total Assets 12,934.00
Total Current Liabilities 2,702.00
Total Liabilities 8,809.00
Total Equity 4,125.00
Cash Flow
Net Income/Starting Line -396.00
Cash from Operating 223.00
Cash from Investing -231.00
Cash from Financing -200.00
Net Change in Cash -208.00

I think AMD has no choice but to build this fab if they want to stay in the microprocessor business. This will be their only facility capable of using the latest technology, and it is crucial if they want to compete with Intel.

How they proceed is still up in the air. They could bring in another company to own the fab and lease the facility or resell the chips to AMD. I think that would fit into their "asset light" strategy. Regardless of AMD's decisions, it is almost a certainty that a fab will be in operation in the LFTC within the next 5 years or so.

I thought this was an interesting quote in the article in this morning's TU:

"Playing in the semiconductor industry has always been like playing Russian roulette with a twist. You put the gun to your head and pull the trigger, and four years later you find out if you blew your brains out," Palmer writes, according to Greenagel.

It kind of answers your question - they don't have the money, but they are hoping that the fab will be a sound investment.

This was also an encouraging quote by the AMD spokesman:
And it's a question of when. It's not a question of if.