You claim it'll be PPC for sure and say the word "Bulldozer" like you don't know where the idea came from.
Here's a hint
http://en.wikipedia.org/wiki/POWER7
http://en.wikipedia.org/wiki/POWER6
but instead of "threads" add "integer cores."
I think paying out of the GloFo contract might have something to do with this if it is indeed true. You're right in that a 'die shrink this forever' type deal wouldn't generally work with AMD but considering they are completely fabless now it shouldn't be a problem. Had they been stuck with GloFo it would have been absolutely impossible but now... not so much.
AMD did the same thing with their GPUs, ShintaiDK. They, unlike nVidia for GPUs and Intel for their x86 license, allowed for very cheap chips and razor thin margins while being open to a
completely customized design as well as continuous straight shrinks. AMD won't be paying for the masks nor producing the chips, the fabs will. The fab argument makes absolutely zero sense to me.
AMD might suck on the desktop and the high end (and in servers they do even worse), but you know what they do REALLY well? Embedded, GPUs and cheap prices. That's 3 huge checks for any console maker.
Also what happens when AMD for example says, hey we gonna stop Llano and make Trinity CPUs. Then MS would say. STOP, we need this Llano CPU. And we need it not only on 32nm, but also 22nm and 14nm. Trinity is not an option.
But why pay AMD 100$ for something you can make yourself for 10$ after you payed 50mio to the designer.
How is this any different than IBM? or Intel? or nVidia for that matter? It isn't different for any of them. Why would MS stop Llano production? What the hell does MS have to do with Llano? Trinity? I think you're forgetting AMD is fabless. AMD, if they are to make the chips, will do something like IBM did but without the fab, meaning they'll help design it, charge a small licensing fee and then that's it. Their job is done. The rest is the same as it's ever been: up to the fabs to produce high yields and good volume.
If any supply issues were to occur it wouldn't be weight on AMD to shoulder but on GloFo (remember GloFo promises the yields and supply now, not AMD) and it would have to be the retail Llano/Trinity chips. If it isn't the retail Llano/Trinity chips then all bets are off as far as fabs go and everyone tosses their name in the hat. Again, even if it were to be an exact Trinity/Llano chip the supply issues would have nothing to do with AMD as MS would be the ones signing the WSA with GloFo.
When it comes to getting blamed, being fabless ain't that bad. People are pointing their fingers at TSMC for 28nm, not Qualcomm/nVidia/AMD