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Updated June 21, 1720 EST (2220 BST): AMD Spokesperson Sarah Youngbauer issued a statement over the weekend denying Reuters' report. She wrote, "AMD provided official confirmation that we have not hired an outside agency to explore spinning-off/splitting the company... We remain committed to the long-term strategy we laid out for the company in May at our Financial Analyst Day, which encompasses all parts of the business."
Original storyOn Friday afternoon, Reuters reported that AMD is weighing its options, and those options include breaking the company up or spinning off some sectors into independent companies. Three anonymous sources who are "familiar with the matter" told the newswire that AMD is just looking at a break up preliminarily, noting that the company hasn't made any decisions to go forward with the move.
Remember when AMD could compete with Intel in both speed and price?
Reuters' sources had said that AMD has hired a consulting firm, "to help it review its options and draw up scenarios on how a break-up or spin-off would work."AMD has struggled over the last decade to keep up with its hulking competitor, Intel. The company's most recent quarterly financial results in April were down 26 percent year on year, with revenue of $1.03 billion and increased operating losses. In addition, the company announced that it would be leaving the microserver market, essentially scrapping its 2012 acquisition of SeaMicro. Since stepping into the role, AMD's new CEO Lisa Su has been determined "to consider every possible option to turn the company around," according to Reuters, including breaking up the company.
"One option under consideration is separating AMD's graphics and licensing business from its server business, which sells processors that power data centers," an anonymous source said, while adding that nothing has been decided and the company could remain together after all.
Original Submission
(Score: 3, Interesting) by Non Sequor on Monday June 22 2015, @11:23PM
The theories that favor mergers are vertical integration (consolidating links in a supply chain, possibly reducing redundant elements in product design or engineering that take place along various points along the chain), horizontal integration (consolidating similar product lines with similar suppliers, possibly reducing redundant elements in product design or engineering that occur in all of the products), and the old conglomerate theory that merging product lines with different development or business cycles should produce a company more likely to weather adverse conditions.
On the other hand, the theory that opposes mergers is that you have to have two companies that fit together or at least one company where if you bring in other employees the way the one company does things makes sense to the new employees. Another theory that opposes mergers is that they tend to be pursued for the sake of fiefdom acquisition schemes by management. Larger companies are more difficult to manage effectively.
The pro theories seem to be losing to the con theories here. Abandoning some grand strategy and sending the pieces on their separate ways lets the pieces pursue whatever niche markets are most appropriate, letting the employees do what they can do best and serving existing customers. That's instead of trying and failing at being Intel.
The day may yet come when Intel fails at being Intel and needs to break up for similar reasons.
Also, even if Oracle has done some horrible things with everything they got from Sun, it's really not much worse for the users than where Sun was headed and the outcome is probably better than Sun trying to remain the same and going bankrupt. Employees, customers, and shareholders generally get screwed over by these kinds of deals, but generally not as badly as they were headed for anyway. It's worthwhile to pay attention to whoever gets thrown under the bus the worst though. Whether you're fully aware of it or not, everyone here plays the role of employee, customer, or shareholder from time to time. Management is the role that not everyone gets to play and that should be viewed more skeptically.
Write your congressman. Tell him he sucks.
(Score: 3, Funny) by c0lo on Tuesday June 23 2015, @02:04AM
I mean... why can't AMD put their shit together?
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 2) by Non Sequor on Tuesday June 23 2015, @02:45AM
I know, right?
It's as if the things you say that sound nice at a meeting have no relationship with what's actually possible. It must be that these eggheads have no vision.
Write your congressman. Tell him he sucks.
(Score: 0) by Anonymous Coward on Tuesday June 23 2015, @12:12PM
I recall AMD being hamstrung by Intel. Intel threatened PC manufacturers with holding back chips, or price gouges, if they went with AMD. As a result of companies not buying their chips, AMD was getting mired in debt, and spun off the foundries to try and stay afloat. They spun off a lot of their business and had to take in overseas capital just to keep going.
(Score: 3, Interesting) by TheRaven on Tuesday June 23 2015, @09:56AM
The CPU business is interesting because of the trend in fab prices. AMD spun off Global Foundries because they don't sell enough chips to be able to afford the investment in new fabs each generation. The only way to get the volume up was to get other people to use their fabs and they thought that this would be an easier sell if they were just another customer of the production part of the company. It also let them use other companies' fabs if it made more sense to do so.
AMD has always been better than Intel at CPU design but worse at fab design. The fact that they've managed to be competitive (and ahead a lot of the time) while being an entire process generation behind Intel attests to this. Intel is starting to struggle because the amount that they need to spend to stay a generation ahead is continuing to go way up each generation, but now the number of laptop / desktop / server sales are not going up at the same rate. They tried to get into the big growth areas, but if you talk to anyone that's tried to use their SoC parts then you'll learn that they fundamentally don't understand the market. They also are only just starting to realise quite how low the margins are for those parts.
sudo mod me up