With the recent chief executive change by AMD, sources from Taiwan's IC packaging and testing houses are hoping that the US-based company will change its policy and increase outsourcing of backend processing for processors.

AMD mostly outsources IC testing and packaging for graphics chips and only a very small amount of orders for processors at the moment. AMD handles the majority of its own testing and packaging at its plant in Germany.

AMD first outsourced processor chip packaging in the second quarter of 2010 to Siliconware Precision Industries (SPIL), and analysts had expected AMD to further increase outsourcing for backend processing. However, due to AMD looking to digest inventory in the fourth quarter of 2010, backend orders did not increase substantially.

SPIL, in a previous investors meetings, had indicated that it will make production line adjustments and install new equipment to improve capability for processor packaging. With rising costs, it is very likely that AMD will increase orders to Taiwan-based packaging houses such as SPIL and Advanced Semiconductor Engineering (ASE).