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Advanced Micro Devices has hired JP Morgan Chase to investigate future strategic options for the company, which has been losing money, market share and talents for many years in a row. AMD officially denied that the plan is to sell the company or to merge with a bigger partner.

The options that AMD asked JP Morgan Chase to explore include sale of the whole company as well as a sale of its portfolio of patents, reports Reuters news-agency citing three sources with knowledge of the matter. It is claimed that the primary option of JP Morgan Chase’s investigation is not sale of AMD to a private equity group or a larger competitor, but are other strategic options and ways to raise cash.

AMD has suffered hard from the growing popularity of ultra-mobile devices like smartphones and media tablets since x86 chips that it has been manufacturing for around forty years still have not found a way into those new devices. Recently AMD introduced its new ambidextrous strategy under which it intends to start making central processing units and system-on-chip products based on ARM architecture that integrate more of third-party intellectual property.

While the new strategy allows AMD to become more competitive in the future, there are too many current issues that may prevent the company from staying on the market. Therefore, large shareholders of AMD could help the chipmaker strengthen its finances in order to acquire technology it believes it needs to tackle new markets.

"Right now they don't have the currency on their balance sheet or their share price to make an acquisition (of another company) viable," said Cody Acree, an analyst with Williams Financial.

AMD itself also denied plan to sell off the company.

"AMD's board and management believe that the strategy the company is currently pursuing to drive long-term growth by leveraging AMD's highly-differentiated technology assets is the right approach to enhance shareholder value," said Drew Prairie, a spokesman for AMD.

Tags: AMD, Business, Mubadala, Globalfoundries, Apple, Samsung

Discussion

Comments currently: 42
Discussion started: 11/13/12 10:11:56 PM
Latest comment: 11/19/12 03:32:07 AM
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1. 
This rumor has already been discredited officially by AMD:

http://www.foxbusiness.co...organ-to-explore-options/

The AMD Buyout Rumor: Why It Had To Be Fake
http://seekingalpha.com/a...or-why-it-had-to-be-fake?

It could happen but it's too early to write off the firm. Either way, if AMD goes down, it's not in the best interest of consumers.
16 7 [Posted by: BestJinjo  | Date: 11/13/12 10:11:56 PM]
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3 12 [Posted by: j7  | Date: 11/14/12 12:14:12 AM]
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For goodness sake, how many usernames do you actually have? 12? 20?
14 6 [Posted by: linuxlowdown  | Date: 11/14/12 04:21:47 AM]
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Either way, if AMD goes down, it's not in the best interest of consumers.


Agreed, I will be watching closely to see what happens in the coming years. Best of luck to AMD in this trying time.
3 2 [Posted by: veli05  | Date: 11/14/12 07:31:48 AM]
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2 7 [Posted by: j7  | Date: 11/14/12 09:02:11 AM]
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4 10 [Posted by: Azazel  | Date: 11/13/12 10:43:27 PM]
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No. In short, Project Win was just about making AMD leaner and more efficient.

http://www.anandtech.com/...ct-win-a-misunderstanding

Selling off patents, trademarks and chopping off AMD into pieces is not Project Win. Project win described a set of initiatives to streamline business and decision-making processes across our operations, R&D and go-to-market functions. Selling off a Patent Portfolio and exploring putting the company up for sale is entirely different.

I can't see how AMD can sell of parts of the firm and survive. AMD can't survive without the GPU division because GPUs are integral to their APU's / HSA strategy. AMD can't sell SeaMicro since it's integral to their sever/ARM-based 2014 strategy. AMD can't sell off the x86 license since Intel won't allow for that.

If they are going to be bought out, how come no other company such as Qualcomm, Samsung, Apple or MS has done so? Either there are serious barriers to the transaction/licensing or no one sees any value in buying AMD.
12 9 [Posted by: BestJinjo  | Date: 11/14/12 12:01:38 AM]
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4 9 [Posted by: j7  | Date: 11/14/12 12:15:52 AM]
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3 7 [Posted by: AvONbaCK  | Date: 11/14/12 01:55:08 AM]
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I think what is happening is that JPMorgan has been called in by management to help make a business case to Abu Dhabi's Advanced Technology Investment Co. (or indeed any other big potential investor) for greater investment. AMD recently appointed another representative from their company to the AMD board of directors. Advanced Technology Investment Co are able to increase their share to 49% of the company under US foreign ownership rules.
12 6 [Posted by: linuxlowdown  | Date: 11/14/12 04:30:52 AM]
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AvONbaCK,
Just wondering, so once AMD is Gone, what will happened to Intel and particular you? Will you see better value coming from Intel and Nvidia? What is wrong with you? In your world competition for consumer $ is a negative thing? We all get it, you hate AMD and Like Intel, good. Now, please answer this question, what will happen when AMD is gone and so x86 competition? All I want to know this answer, please do not tell me AMD sucks, I know it.
5 4 [Posted by: dima  | Date: 11/14/12 07:38:02 AM]
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Don't bother asking him. It's not in his paid script.

AMD aren't going away. Intel needs them for the mostly lopsided competition to look good for the regulator. And the American government needs AMD for their high tech innovation (ie they won't allow a sale to a foreign government). AMD are in the process of repositioning the company for the post-PC era (aka computing for the masses of iFacebook dead-heads). I wonder what Intel are doing to make up their declining desktop sales? Intel share price will also head south, going down to the $17 mark by Q2 2013, despite earlier predictions of +$29. Haswell ain't gonna stop a decline.
11 6 [Posted by: linuxlowdown  | Date: 11/14/12 08:19:05 AM]
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2 7 [Posted by: j7  | Date: 11/14/12 08:59:27 AM]
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It's not all bad. I see a stronger alliance between ARM and AMD to try to capture every market from their common competitor Intel besides supercomputing and high-end server. AMD would be a better "partner" than Nvidia due to their technology portfolio and brand in established markets. AMD could "slot" an ARM cpu into their APU design for the Desktop and Server. Nvidia probably would not be in the running here. But I read that AMD themselves reckon that x86 design will catch up to ARM in only 5 years time. So they can't afford to stop their x86 R&D. I think the economic recession rather than the rise of tablets and phones is the biggest challenge facing chip and desktop manufacturers.
11 5 [Posted by: linuxlowdown  | Date: 11/14/12 09:51:15 AM]
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2 8 [Posted by: j7  | Date: 11/14/12 09:03:57 AM]
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Nope.
11 4 [Posted by: linuxlowdown  | Date: 11/14/12 09:59:21 AM]
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@i7. I do agree with you on this, but how Intel will survive without massive cuts. AMD might be relative to ARM if they hurry up and start integrating ARM CPU with ATI GPU and x86
3 3 [Posted by: dima  | Date: 11/14/12 10:50:02 AM]
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2 7 [Posted by: j7  | Date: 11/14/12 02:47:29 PM]
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2 7 [Posted by: AvONbaCK  | Date: 11/14/12 09:06:32 AM]
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How did you came up with conclusion that I do not see that AMD is desperate? My question was very clear, What will happened to x86 CPU market when AMD is gone? Get it? At this point in live, I need fortune tellers for my stock portfolio. Are you good in this “fortune telling “ business?
4 4 [Posted by: dima  | Date: 11/14/12 10:46:58 AM]
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2 5 [Posted by: j7  | Date: 11/14/12 06:16:21 PM]
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AMD can't sell off the x86 license since Intel won't allow for that.


I completely disagree with this. Intel most certainly would LOVE for a competitior with a chunk of their x86 market to leave the market, due to the fact that they will have an opportunity to gain more market share.

Legally, they can't get to crazy tdue to the anti-trust/monopoly laws in place (in the USA at least) but I would be willing to bet if AMD was dissolved Intel would capitalize as much as legally possible on it.

They might even go as far as taking most of the x86 market, and reincorporating part of their share under a different name while sharing the same design secrets. AKA Two taxably different corporations that both exclusively sell intel product.

Either way, prices will most likely scyrocket in the even AMD goes out of business due to lack of competition. NOT good for anyone.
2 4 [Posted by: veli05  | Date: 11/14/12 07:41:13 AM]
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2 6 [Posted by: AvONbaCK  | Date: 11/14/12 09:36:37 AM]
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3 7 [Posted by: AvONbaCK  | Date: 11/14/12 01:21:37 AM]
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Maybe they could start by outbidding Intel for your services?
12 5 [Posted by: linuxlowdown  | Date: 11/14/12 04:39:30 AM]
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2 7 [Posted by: j7  | Date: 11/14/12 08:58:00 AM]
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4. 
While AMD can turn things around, it will take time, and lots of it. I don't see why they do not merge with someone bigger an use its resources to come up with something great. AMD may not Like to merge with someone else, but it may be a smart option.
0 2 [Posted by: Sahasrara  | Date: 11/14/12 03:23:18 PM]
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2 5 [Posted by: j7  | Date: 11/14/12 06:07:51 PM]
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5. 
NO AMD IS NOT CONSIDERING SELLING THE COMPANY.

They have officially stated that they are looking to leverage their TECHNOLOGY with other partners and that is why they are looking at collaborations with interested industry partners.

QUOTE

"Soon after we clicked Publish on this story, we received a comment from an AMD spokesman. "AMD's board and management believe that the strategy the company is currently pursuing to drive long-term growth by using AMD's highly-differentiated technology assets is the right approach to enhance shareholder value," he wrote. "AMD is not actively pursuing a sale of the company or significant assets at this time."

http://www.theregister.co...loring_options_with_jpmc/
12 6 [Posted by: beenthere  | Date: 11/14/12 03:31:06 PM]
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2 5 [Posted by: j7  | Date: 11/14/12 06:04:57 PM]
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6. 
people like to jump to conclusions amd isn't going anywhere they hired jp morgan and chase to help them venture out into new segments so they can be a lot more profitable in the future instead of trying to do the same old thing, because the same old thing isn't making them money anymore. They are realizing that you just can't stay in business strictly based on x86 computing in an ever changing tech world. What may have worked 10 years ago isn't working today because of that.
8 2 [Posted by: SteelCity1981  | Date: 11/14/12 03:49:42 PM]
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AMD is going nowhere but DOWN SIX FEET UNDER. AMD is just a failing company that doesn't know when to just keel over and die already.
2 4 [Posted by: j7  | Date: 11/14/12 06:13:56 PM]
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2 5 [Posted by: AvONbaCK  | Date: 11/14/12 10:11:40 PM]
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1 5 [Posted by: j7  | Date: 11/15/12 01:18:19 AM]
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Intel down below $20 now. Could fall as low as $12 like during GFC, as Europe and US slip back into recession again. All negative factors priced into AMD shares now with book value at $2.00. Only growth opportunities from here -

Quote: "Wells Fargo’s David Wong had a number of meetings yesterday with AMD management.... AMD is taking appropriate actions to reduce costs and to streamline in product development efforts. We think that AMD has done a good job in leveraging its graphics and microprocessor expertise to create its APU product lines. We think that AMD’s opportunity to design and sell chips into game consoles will be very helpful in providing a near to intermediate term revenue boost as well as some nonrecurring engineering (NRE) funding for R&D costs […] We suspect that AMD has a contract to develop and manufacture game console processors for either one or two of the large game console maker (perhaps Sony (SNE) and/or Microsoft (MSFT)) systems that may be launching in the second half of 2013."

http://blogs.barrons.com/...pe-in-cost-cuts-consoles/

So, AMD have already partly announced how they will combat the falling demand for x86 by employing an ambidextrous strategy. The question is, what is Intel going to do? Where are their alternative streams of revenue going to come from? From Space Invader arcade machines? Will they just take the hit and become a lesser company at the expense of ARM and its fabless motley crew?
10 4 [Posted by: linuxlowdown  | Date: 11/15/12 03:10:00 AM]
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2 5 [Posted by: AvONbaCK  | Date: 11/15/12 03:35:09 AM]
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Just because Intel managed to stuff a Celeron in a small case doesn't mean its a true competitor in this space. How many design wins does it have? Less than AMD's Hondo in tablets I suspect. As far as 48 cores go, that's 10 years away. What is a person going to do with 48 cores in a mobile? The moms and daughters are going to transcode video at the coffee shop? Seriously. I imagine there are going to be diminishing returns of cores in a small screen device. And I think for security reasons our main computers are not ever going to be infallible mobile devices. The technology going forward is going to be all about low power chips and longer life battery technologies. The height will be when they can run and recharge off built in solar cells. In conclusion, I would advise that you sell all your Intel shares now before they lose 20% - 30% value. Intel is going downtown.
10 4 [Posted by: linuxlowdown  | Date: 11/15/12 05:33:15 AM]
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Wrong Intel is going to be a relevant x86 player. ARM cortex A15 uses 2-3x more power than Cortex A9 History repeats itself with ARM. ARM Cortex A8 also used 2-3x more power than ARM11. ARM will be relevant because of low priced devices. Intel will be relevant for top notch x86 performance at less than 10 watts. Next year Intel's x86 will use less power than ARM.
2 3 [Posted by: j7  | Date: 11/18/12 05:07:36 PM]
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@j7
We are nearly there friend. 1.32 and 1.86 a share left to go.
I told many a long time ago that the graphics would be hit as well but they would not believe me.
I have finally reached to the conclusion that RR gets paid to destroy the company.

http://techreport.com/new...ay-amd-plans-more-layoffs
1 3 [Posted by: AvONbaCK  | Date: 11/19/12 03:32:07 AM]
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