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Report: AMD Hired JP Morgan to Explore Options

By - Source: Tom's Hardware US | B 29 comments

AMD is looking for ways to make some cash in a changing market before its reserves are depleted.

Reuters reports that AMD has hired on J.P. Morgan Chase & Co., a leading global financial services firm with assets of $2 trillion and operations in more than 60 countries, to explore its options.

Sources claim that options AMD is currently investigation could include a potential sale as the company struggles to compete with Intel in both the desktop and mobile sectors. However unnamed sources claim that an outright sale is not the current priority. Instead, the company may focus on options like selling its portfolio of patents.

Currently the company is cutting costs and downsizing, and analysts fear that AMD may not find new markets for its technology in time to reverse the declining cash reserve. In this year alone, shares have fallen more than 60-percent, placing AMD's market value around $1.42 billion (Intel is $103 billion). The company also has $2 billion worth of long-term debt and capital lease obligations.

"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," the company said in an official release. "AMD is not actively pursuing a sale of the company or significant assets at this time."

After the Reuters exclusive report went live, AMD shares actually began to rise, jumping 5.03-percent to $2.35 in recent trading. In 2011 the company generated revenue of just over $6.5 billion, and as of late employs nearly 12,000 people.

Last month AMD said it would take an "ambidextrous" approach to its chips by combining ARM's 64-bit A-15 core architecture to its own x86-based Opteron processors for data center servers and cloud computing. The first ARM technology-based AMD Opteron processor is targeted for production in 2014 and will integrate the AMD SeaMicro Freedom supercompute fabric, the industry’s premier high-performance fabric.

 

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  • 16 Hide
    myromance123 , November 14, 2012 11:20 AM
    People still try to put AMD's products in the same light as Intel's, but with Intel's market value of practically 100 times that of AMD's I'd have to say AMD's offerings are amazing in this perspective. It is very frightening though, the thought of an Intel monopoly. I really really hope it doesn't come to that.
Other Comments
  • 9 Hide
    kog91 , November 14, 2012 10:52 AM
    Correction: the A-53 and A-52 Cortex processors are the 64-bit ARM architecture that AMD is planning on using. A-15 is 32-bit and not suitable for large memory environments.
  • -6 Hide
    wemakeourfuture , November 14, 2012 11:05 AM
    I wished I had short AMD when it was $8
  • 0 Hide
    Yuka , November 14, 2012 11:07 AM
    I wonder what Otellini has to say about this...

    I'd love to hear his opinion about JP Morgan getting involved with AMD xD

    Cheers!
  • 16 Hide
    myromance123 , November 14, 2012 11:20 AM
    People still try to put AMD's products in the same light as Intel's, but with Intel's market value of practically 100 times that of AMD's I'd have to say AMD's offerings are amazing in this perspective. It is very frightening though, the thought of an Intel monopoly. I really really hope it doesn't come to that.
  • 8 Hide
    kog91 , November 14, 2012 11:21 AM
    gamerk316Bye AMD. Was a nice ride.


    AMD has been in this situation more than once, the end of 2008 for one. The problem is that people look at stock values and assume that is a measure of the success or failure of a company. That is simply not true. AMD has been at this game for a very long time. It may mean they need to reinvent themselves in terms of markets and tactics, but they are a long way off from ever throwing in the towel.

    Or have you all forgotten that 20% of AMD is owned by the United Arab Emirates. With that kind of capital pool, revenue isn't the only piece of the story.
  • -2 Hide
    cats_Paw , November 14, 2012 11:34 AM
    Correct me if im wrong, but i was under the impression that AMD GPUs were having a decent run overall in the market.
    In processors they have been loosing for quite some time with intel, but i have no idea what they could work on right now...
  • 1 Hide
    myromance123 , November 14, 2012 11:36 AM
    @kog91 that's pretty cool information. I had no idea the United Arab Emirates owned such a large portion of AMD! Reading up on it now.
  • 1 Hide
    redeye , November 14, 2012 12:01 PM
    ...JP Morgan... also at the center of that MASSIVE bail-out for the banking sector... so i don't see JP Morgan helping AMD... maybe they can find a suitable buyer?... (it is to strong to call JP Morgan a "Vampire" or "Bloor sucker" ... just slightly too strong...
  • 4 Hide
    shqtth , November 14, 2012 12:08 PM
    Please oh Please oh Please someone fire that AMD ceo already.
    He is nothing but bad news for the company, and hes been screwing things up since he started.
    AMD could of easily caught up, especially when they sold GF off and with that 1 billion from intel, but that money magically disappeared.
    AND With the FX launch, he didn't have plan B. (faster clock Phenom II)
    Also since AMD decided to not make high end parts, they lost touch with the enthusiasts, and they need those people as they are the people who recommend AMD to other people. Call them the sales people.
    Anyways, AMD, if you want to go screw yourself, then please separate yourself from ATI, I want my canadian company back. The CEO and AMD can go F themselves together with the billions in stockpile, but give ATI back at least before you ruin it too.

    I think the CEO of AMD must hang out with his fellow friends at the board of HP, as both seem to be equally retarded.
  • 1 Hide
    tomfreak , November 14, 2012 12:15 PM
    Cats_PawCorrect me if im wrong, but i was under the impression that AMD GPUs were having a decent run overall in the market.In processors they have been loosing for quite some time with intel, but i have no idea what they could work on right now...
    what scare me is the recent driver support, the decision to drop the driver support for not so old HD4000 GPU really bad one. HD4000 GPU is still pretty fast GPU and capable to play a lot of latest games with no issue. I can understand if they decide to drop HD2000, but 3000, 4000 still pretty quite decent for new games.
  • 0 Hide
    sayantan , November 14, 2012 12:24 PM
    Tomfreakwhat scare me is the recent driver support, the decision to drop the driver support for not so old HD4000 GPU really bad one. HD4000 GPU is still pretty fast GPU and capable to play a lot of latest games with no issue. I can understand if they decide to drop HD2000, but 3000, 4000 still pretty quite decent for new games.


    This is what happens when you lay off your engineers.... Although they didn't entirely dropped the driver support for 4000 series. They still release new drivers for 4000 series but at a slower pace.
  • 6 Hide
    sayantan , November 14, 2012 12:29 PM
    Go advertise your APUs, half of the people still don't know about them....
  • -1 Hide
    castle songbird , November 14, 2012 12:33 PM
    kog91AMD has been in this situation more than once, the end of 2008 for one. The problem is that people look at stock values and assume that is a measure of the success or failure of a company. That is simply not true. AMD has been at this game for a very long time. It may mean they need to reinvent themselves in terms of markets and tactics, but they are a long way off from ever throwing in the towel.Or have you all forgotten that 20% of AMD is owned by the United Arab Emirates. With that kind of capital pool, revenue isn't the only piece of the story.



    back in 08 it was check; this time it looks more like check mate.
  • -3 Hide
    squirrelonfire , November 14, 2012 12:33 PM
    Why did I buy a 7970 !!!!!!!!!!!!!
  • 3 Hide
    Anonymous , November 14, 2012 12:41 PM
    OR AMD hired JP Morgan to Explore taking AMD private! JP Morgan could find a suitable private equity firm with deep pockets and long term goals for AMD's very valuable IP! Yes converting AMD from a publicly held company with all the short term profit pressures (Stockholders) to privately held private equity firm with big investors (very wealthy investors with deep pockets who can afford to loose money for a few quarters and not worry about it). Private equity qroups can and do run companys at a loss for a time, or the break even point for even longer, while they employ turnaround specialists to return a failing company to profitability!
  • 2 Hide
    zuluprime , November 14, 2012 12:44 PM
    These days advertisements are so sweet people will buy manuer that's advertised as play dough. Get in peoples face every day and they will know your brand. Pair up with Linux or Valve and make your own OS for servers, gaming, maybe even smart phones or an AMD branded Home theatre set up. You make or band memory, you make chips, you make graphics. Stop selling off what little assets you do have. Make sweet contracts with top companies like Apple, Amazon, GE, Google, etc. Youre already on the works with Sony I hope. That is just my opinion...
  • -1 Hide
    Anonymous , November 14, 2012 1:04 PM
    AMD will deny the sale of the company until they have a buyer. Take my word on this. The company known as AMD will no longer exist, and ATi will be made into its own company again.

    heed my warning!
  • 0 Hide
    Anonymous , November 14, 2012 1:20 PM
    JustPosting75, no breakup no sale of ATI, or any other valuable AMD IP, Just JPM chase and the agreed upon private equity qroup telling AMD's stock holders: Sell your shares to us now, at face value, or sell to us at pennys on the dollar, after the bankruptcy court orders the sell to us, after bankruptcy is declared!
    AMD is just like chrysler, in the auto industry, that was taken private, and then turned around!
  • 1 Hide
    InvalidError , November 14, 2012 1:22 PM
    Cats_PawCorrect me if im wrong, but i was under the impression that AMD GPUs were having a decent run overall in the market.

    The problem with GPUs is that people who buy mid/high-end graphics account for less than 5% of the market, the low-end is getting cannibalized by IGPs, most low/mid-range laptops use IGP, the desktop market is shrinking and the ASP on very capable GPUs are dropping as well.

    The discrete GPU candle is burning from both ends: IGPs are raising the bar for the minimum discrete GPU worth buying while lowering the amount of cash casual gamers and non-gamers are willing to spend on better-than-IGP graphics. About a month ago, some numbers were leaked from AMD hinting that the HD8850 might launch under $200, $50 less than the HD7850's launch price. This seems to indicate that AMD expects to have to give (much) more for (much) less to keep people interested in discrete GPUs.

    The uber-gamers may still buy $400 GPUs but they account for only a tiny (and probably shrinking) piece of the overall pie.
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