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posted by CoolHand on Monday June 22 2015, @10:47PM   Printer-friendly
from the survival-of-the-fittest dept.

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 story

On 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

 
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  • (Score: 3, Interesting) by TheRaven on Tuesday June 23 2015, @09:56AM

    by TheRaven (270) on Tuesday June 23 2015, @09:56AM (#199806) Journal

    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.

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