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“The real men have fabs,” once said Jerry Sanders, the founder of Advanced Micro Devices, implying that it takes semiconductor manufacturing fabs to be successful in the chip business over a long term. AMD has already spun off its manufacturing capacities and now plans to sell and lease back its legendary Lone Star campus in Austin, Texas.

In a bid to get between $150 million and $200 million, AMD wants to sell off its Lone Star campus in Austin, Texas. The company will fund chip development using the proceeds, though, it will hardly be able to significantly improve funding. For the third quarter of fiscal 2012, AMD’s research and development expenses were $328 million (down from $361 million in Q3 FY2012); whereas marketing, general and administrative expenses were $188 million (down from $249 million a year before).

"There are favorable economic conditions in the part of Austin where the campus is located. Contingent on finding an investor who wants to do a multiyear lease-back, it is a good opportunity for us to unlock the value of the real estate to fund operations," said Drew Prairie, a spokesman for AMD, in a conversation with Reuters news-agency.


AMD Lone Star campus in Austin, Texas. Image by Wildflower.org

AMD's headquarters in Sunnyvale, California, and a building near Toronto were sold and leased back in the past. However, the Lone Star campus is considered as AMD’s home as it houses many of the critical worldwide business operations of the company.

Recently AMD initiated restructuring plan that reduces costs and allows AMD to achieve break-even point with $1.3 billion quarterly revenue. The company laid-off over 1700 employees this quarter and plans to further reduce headcount in early 2013.

 

Tags: AMD, Business

Discussion

Comments currently: 17
Discussion started: 11/27/12 10:55:01 PM
Latest comment: 11/29/12 11:22:40 AM
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[1-6]

1. 
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3 9 [Posted by: mecow  | Date: 11/27/12 10:55:01 PM]
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2. 
AMD become fabless, then product-less, now will be homeless. What is next step in their bright future ?
10 5 [Posted by: Tristan  | Date: 11/28/12 01:58:22 AM]
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3. 
Are they going to change their name to Advanced Micro Drifters?
9 3 [Posted by: jihadjoe  | Date: 11/28/12 02:50:05 AM]
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4. 
The will make chips underground, kind of like PirateBay does. lol
Well better to sell off to put money into finish a chip or what ever is needed then to risk going out completely without money to finish a chip. i guess they are putting all their eggs in one basket.
You do need to take risk sometimes but wow, you could loose everything.
Apple almost went bankrupt until they asked Steve Jobs to come back and he did some crazy things.

Who knows.

Maybe they need to do more crazy things but faster before time runs out.
5 1 [Posted by: dreamer77dd  | Date: 11/28/12 06:06:12 AM]
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5. 
All they are trying to do is sell the building and land ir it sets on and then immediately lease it back.

Sounds pretty prudent to me as they will no longer have to maintain the building.

Although AMD better "git thair mules in geer, if'n thay egspekt to stay in bidness" (Native Texan, next to Tennessee, the most guns per citizen and darned proud of it
3 0 [Posted by: fdunn  | Date: 11/28/12 07:33:49 AM]
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6. 
The difference between owning and leasing a building is nothing when measured against not being able to fund development and being able to fund development.

Development must happen, or the company goes into a death spiral. Owning a building? Not important.
1 1 [Posted by: TA152H  | Date: 11/28/12 10:35:48 AM]
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- collapse thread

 
show the post
8 15 [Posted by: Avon4Balls  | Date: 11/28/12 12:02:09 PM]
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You probably have no money to buy anything, so are irrelevant.

Owning or leasing a building is different from owning a fab or having engineers. You really can't understand the difference?

People who work in that campus will not be impacted. They'll still have a roof, electricity, etc... It's just leased.

Not having Fabs and engineers is completely different. They are selling these buildings so they can afford to keep engineers. Didn't you understand that part?

So, I agree, you need development. So does AMD. That's why they are generating cash, so they can keep them.

I hope that clears it up for you. But, then, I sense you aren't interested in clearing things up, but in confusing people with your rabid anti-AMD nonsense.
1 3 [Posted by: TA152H  | Date: 11/28/12 01:10:23 PM]
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"Trying to raise cash" means they are seriously out of money.

Owning a building is for certain less costly in the long term than leasing it every month, or every year. This can only mean that AMD is so strapped for cash that they need to think in terms of the very short term in order to survive.

Certainly not a sign of healthy finances.
2 0 [Posted by: jihadjoe  | Date: 11/29/12 01:34:12 AM]
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