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AMD Selling, Leasing Back Austin Campus to Raise Cash

By - Source: AMD | B 22 comments

It's part of AMD's plan to reduce investments and capital in non-core parts of the business.

AMD said on Tuesday that it has entered an agreement to sell and then lease back its "Lone Star Campus" in Austin, Texas to Southwest Parkway Holdings, an affiliate of real estate investment company Spear Street Capital. The transaction is expected to close around March 26, and will generate approximately $164 million in cash for the struggling chip maker.

According to the deal, AMD will enter into a 12-year lease with an extension option to continue its operations on the campus. Meanwhile, money generated from the sale is expected to be reflected in the company’s first quarter 2013 financial statements when reported on April 18. There will also be a special $50 million charge primarily related to the difference between the sale proceeds and the property's carrying value.

This isn't the first time AMD has pulled the sell-and-lease-back scheme, as the company sold its Sunnyvale, California headquarters in 1998 and is currently leasing it back. It also pulled the sell-and-lease-back maneuver with the major site in Markham, Ontario, Canada in 2008. Needless to say, this isn't anything new for the APU maker.

"As we reset and restructure AMD for long-term success, we are taking a number of steps designed to optimize our business and monetize assets," said Devinder Kumar, chief financial officer of AMD. "The sale of our Austin campus will unlock a significant amount of capital, while the multi-year lease back of our Austin campus reconfirms our long-term commitment to the city that so many AMD employees have called home since 1979."

AMD said the sale of its Austin campus is part of the company’s strategy to reduce investments and capital in non-core parts of the business, including real estate. Currently AMD employs approximately 1,900 people in the Austin campus.

 

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  • 19 Hide
    edogawa , March 12, 2013 7:26 PM
    I hope AMD restructures, and comes back into the game strong again; Intel needs competition.
Other Comments
  • 19 Hide
    edogawa , March 12, 2013 7:26 PM
    I hope AMD restructures, and comes back into the game strong again; Intel needs competition.
  • 7 Hide
    GabZDK , March 12, 2013 7:49 PM
    Who would say a console would bring so much hope to the PC market??
    PS4, you need to succeed so that AMD can bring on full badass mode, that is an order
  • 4 Hide
    DRosencraft , March 12, 2013 8:03 PM
    With the upcoming Haswell from Intel looking to be a much more modest step for them, AMD has an opportunity to build up some sales come this summer and fall, and hopefully that will put them in place to do more spending on innovations and improvements on their forthcoming offerings.
  • 7 Hide
    Marco925 , March 12, 2013 9:08 PM
    ta152hHaswell is a modest step??? It's going to have at least 10% better IPC, considerably higher in HT use. IB already rapes anything AMD has out.


    They said that about ivy bridge in comparison with sandy bridge, the performance gains of ivy bridge were negligible at best.
  • 2 Hide
    velocityg4 , March 12, 2013 9:36 PM
    I wonder how much of that $164 million will end up as bonuses for executives?
  • -3 Hide
    dragonsqrrl , March 12, 2013 10:32 PM
    Marco925They said that about ivy bridge in comparison with sandy bridge, the performance gains of ivy bridge were negligible at best.

    Umm, who? That's news to me, as far as I know Ivy Bridge was never meant to provide a large jump in processor performance, nor was it ever expected to by legitimate sources. I think most informed enthusiasts basically knew what to expect from Ivy Bridge based on Penryn and Westmere before it.
  • -2 Hide
    iamtheking123 , March 12, 2013 11:00 PM
    Marco925They said that about ivy bridge in comparison with sandy bridge, the performance gains of ivy bridge were negligible at best.

    No. It was around 10% faster with lower power consumption.
  • -5 Hide
    Blessedman , March 12, 2013 11:20 PM
    I know I am going to get a lot of boo's but Apple sure could step in here and have it's own CPU house...
  • 5 Hide
    silverblue , March 13, 2013 12:23 AM
    iamtheking123No. It was around 10% faster with lower power consumption.

    More like about 4% faster.
  • 5 Hide
    fuzznarf , March 13, 2013 4:36 AM
    AMD is improving IPC about 10% per year, where Intel is increasing 5% per year. At the current rate, in 5 years IPC for both intel and amd will be close to equal.

    Overall, IPC is starting to matter less and less. As long as intel continues to keep 6+ core processors price prohibitive and exclusively for the professional market, AMD will win every time in multi-threaded arena. And considering that more and more developers are creating software that utilizes multithreading, single core IPC is becomming less important.

    AMD wins in GPU, APU, and multi-threaded CPU to price markets.
    Intel wins in IPC, workstation, and marketing. Ask anyone who intel is and they will tell you about those stupid blue-man commercials. Ask those same people about AMD and they will stare at you.
  • -2 Hide
    jujuvivi , March 13, 2013 4:54 AM
    This really tells us how weak financially is AMD.
    They laid off, sold their factory and now their campus.

    Sure, in the short term, they make some $$ that Rory Read willl undoubtly claims to be from his great market vision.
    But in 15 years or so, it will have all been swallowed by the rent that they will still have to pay...

    Outside smartphone and tablets, the interest of Haswell is not in the CPU but the integrated GPU that might be twice faster than IvyBridge.
    The only benchmark in favor of AMD will vanish this summer...
  • 0 Hide
    yhatz17 , March 13, 2013 6:50 AM
    some people want amd to be down to prove that intel is better than amd, but if that company goes down surely intel will rape the prices of cpu's and nobody gonna be happy because of that :) 
  • 0 Hide
    Darkk , March 13, 2013 6:52 AM
    AMD is shooting themselves in the foot with this but since we're on a serious credit crunch it's understandable why they are doing this just to survive.

    I too hope AMD has few aces up their sleeves. PS4 is one of them.
  • 0 Hide
    catfishtx , March 13, 2013 7:14 AM
    I used to work in that building. I agree with Blessedman, this seems like an opportunity for Apple or anyone needing a fab.
  • -1 Hide
    InvalidError , March 13, 2013 8:48 AM
    jujuvivithe interest of Haswell is not in the CPU but the integrated GPU that might be twice faster than IvyBridge.The only benchmark in favor of AMD will vanish this summer...

    Even Intel's GT3 IGP will only barely match AMD's Trinity IGPs from last year so AMD's APU refresh should put them ahead again in that department. Intel might catch up with AMD on the IGP front on a same-year-model basis with Broadwell next year if they go with another 2-3X performance leap.
  • 0 Hide
    maxinexus , March 13, 2013 10:03 AM
    Things are not looking bright for AMD...we need another athlon64 era
  • 1 Hide
    madjimms , March 13, 2013 11:55 AM
    BlessedmanI know I am going to get a lot of boo's but Apple sure could step in here and have it's own CPU house...

    NO
  • -1 Hide
    thecolorblue , March 13, 2013 7:36 PM
    yhatz17some people want amd to be down to prove that intel is better than amd, but if that company goes down surely intel will rape the prices of cpu's and nobody gonna be happy because of that

    too true, although intel is already raping the market price-wise
  • -1 Hide
    somebodyspecial , March 14, 2013 12:21 AM
    Intel has competition. Starting next year ARM (calxeda, NV, Arm themselves, Qcom, Samsung etc all enter cpu's on your desktop, and 2015 they all enter your servers). Intel won't be facing a bankrupt AMD. A lot of the ARM Juggernaut has billions in the bank and no debt. Samsung says server chip in 2014 but we'll see.

    Here's a quick rundown on a bunch entering servers and where they're heading:
    http://www.theregister.co.uk/2013/01/02/arm_server_future/
    Not much of a jump to make things run on the desktop either for anyone. NV has Denver (desktop) & Boulder (server) coming 2014/2015. IF AMD goes bankrupt and I'm running NV, as the only discrete gpu maker, I'd block all Intel machines from using my cards once gaming isn't directx oriented :)  Ruthless, but deadly. A Bill Gates/Steve Jobs kind of move. Of course that's assuming they get some real games on android by then. If we're all weaned off Directx and consoles sales suck this xmas and beyond it can be done. Imagine x86 with only Intel gpus. And then on the flip-side an android/chrome based PC running NV's latest gpus. I'm guessing game devs would follow the gpu power as nobody wants to be LESS creative.

    The 164mil here for AMD won't do squat to stop another Billion loss this year. AMD will need more funding as they lost 1.18B last year, and have ~1B left. Consoles and Arm profits are 9months out at best. This is a challenging year for AMD and their credit is already junk bond status. That makes borrowing even more costly going forward. I really hope AMD gets bought soon and backed by Billions (IBM, Samsung, Qcom could all do this easily).
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