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AMD considering a split

by on22 June 2015


Needs to make money

As we have been warning, AMD is considering selling itself off as part of a consolidation which is happening in the chip industry.

AMD leaks suggest that the outfit is at the initial stage of reviewing whether to split itself in two or spin off a business.

The deliberations are preliminary and no decision has been made, the people said but with all the consolidation in the chip industry, coupled with AMD's inability to make money means it is being take seriously.

Chief Executive Lisa Su's has said that she is considering every possible option to turn the company around – so a split or a sell off is on the table.

One option under consideration is separating AMD's graphics and licensing business from its server business, which sells processors that power data centres.

AMD rejected doing that in the past, but Su appears to think there is merit for the company to at least consider such a possibility again.

There is no certainty that a split or spin-off will occur, the people cautioned, but then they also said that it was not a possibility earlier this year.  Officially AMD is denying it.

AMD, which has a market capitalization of around $2 billion, has competed with much larger Intel since the 1980s, and at times has made inroads with its PC and server chips.

AMD has an extensive cross-licensing agreement with Intel, which might put a spanner in the works.

The company, which said in October it would cut 7 percent of its workforce, is now shifting its focus to gaming consoles and low-power servers to combat falling laptop sales.

AMD's net loss widened to $180 million, or 23 cents per share, in the quarter that ended March 28, from $20 million a year earlier. It also missed on revenue expectations. It is forecasting a return to profit in the second half of the year.

Last modified on 22 June 2015
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