AMD Hires JP Morgan Chase to Explore Options of Company’s Future

AMD’s Management Considers Sale of Company, Patent Portfolio

by Anton Shilov
11/13/2012 | 09:57 PM

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.