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Mubadala Provides AMD With Financial Room to Breathe

By - Source: Bloomberg | B 43 comments

AMD apparently received a safety net from Mubadala Development, which reportedly increased its share in the company to 19 percent, in exchange for a cash payment and an additional seat on the company's board.

An analyst pointed out that this move could mean that Mubadala would bail out AMD, if it had to.

“If you have a lender of last resort like that, what’s the potential of you not having options?” said Cody Acree, an analyst at Williams Financial Group, in an interview with Bloomberg.

AMD is making adjustments to its business to sail through the current economic storm. The company refinanced a $485 million debt payment that was due in Q3; AMD announced that it would sell its Austin company campus for about $150 to $200 million, presumably to cover a $225 million payment that is due to be paid to Globalfoundries in Q1 2013; and a 15 percent cut of its workforce should positively influence its balance sheet further.

For the fourth quarter of 2012, AMD said it expects revenue to decrease by 9 percent sequentially.

 

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Top Comments
  • 27 Hide
    wannabepro , December 5, 2012 1:18 AM
    No, it's plagued with bad management, and general bad luck.
  • 21 Hide
    blazorthon , December 5, 2012 1:24 AM
    Bad management and they keep trimming everything other than management from what I'm reading :( 

    AMD should get a clue about the management issue if they want good market share and higher profitability.
  • 20 Hide
    joytech22 , December 5, 2012 1:29 AM
    Poor AMD, really is a killer to see a technology giant slowly sinking.
    They have to rise back up, they just have to for the sake of the rest of us.

    If one of every single enthusiast or general PC user spent $100 on one of AMD's CPU's, they would be out of trouble faster than you can say that really long word from Merry Poppins.
Other Comments
    Display all 43 comments.
  • -7 Hide
    memadmax , December 5, 2012 1:11 AM
    Wow, AMD is that bad huh?
  • 27 Hide
    wannabepro , December 5, 2012 1:18 AM
    No, it's plagued with bad management, and general bad luck.
  • 21 Hide
    blazorthon , December 5, 2012 1:24 AM
    Bad management and they keep trimming everything other than management from what I'm reading :( 

    AMD should get a clue about the management issue if they want good market share and higher profitability.
  • 20 Hide
    joytech22 , December 5, 2012 1:29 AM
    Poor AMD, really is a killer to see a technology giant slowly sinking.
    They have to rise back up, they just have to for the sake of the rest of us.

    If one of every single enthusiast or general PC user spent $100 on one of AMD's CPU's, they would be out of trouble faster than you can say that really long word from Merry Poppins.
  • 0 Hide
    BigBodZod , December 5, 2012 1:34 AM
    I'm hoping for the best, however the ghost of CBM seems to have camped out at AMD these past few years...
  • -8 Hide
    warmon6 , December 5, 2012 1:37 AM
    joytech22Poor AMD, really is a killer to see a technology giant slowly sinking.They have to rise back up, they just have to for the sake of the rest of us.If one of every single enthusiast or general PC user spent $100 on one of AMD's CPU's, they would be out of trouble faster than you can say that really long word from Merry Poppins.


    superfragilisticexpialidocious :p 
  • 17 Hide
    A Bad Day , December 5, 2012 1:48 AM
    BTW, the company bailing out AMD is an investment vehicle of Abu Dhabi's government. It has quite a bit of assets and partners.
  • 15 Hide
    digiex , December 5, 2012 1:48 AM
    Better lender than the Chinese.
  • 6 Hide
    Anonymous , December 5, 2012 1:49 AM
    Companies that cut management as a last resort normally fail in the end.
    Overhead has to be reduced.
  • 4 Hide
    A Bad Day , December 5, 2012 1:52 AM
    Forbes did an article talking about why AMD failed: http://www.forbes.com/sites/michaelkanellos/2011/11/07/where-amd-failed/2/

    1. It lost trust in it's own employees.
    2. It engaged in a losing price war against Intel, who had better fab plants on their side.
    3. It failed to expand into new profitable markets. AMD APU was a good idea, but not good enough.
  • 16 Hide
    DRosencraft , December 5, 2012 2:38 AM
    A Bad DayForbes did an article talking about why AMD failed: http://www.forbes.com/sites/michae [...] -failed/2/1. It lost trust in it's own employees.2. It engaged in a losing price war against Intel, who had better fab plants on their side.3. It failed to expand into new profitable markets. AMD APU was a good idea, but not good enough.


    A little bit premature to use "fail" in the past tense seeing as how they're still around. Yes, they have been experiencing a rough time, and probably have been hit harder than most other similar companies due in large part to not living up to expectations of them with Bulldozer. But their APU line is doing alright, and their GPUs are in demand. Furthermore they do apparently have potentially very big contracts with Sony and MSFT for the next gen consoles. And if the FX-8350 is any indication, they are heading the right direction with the new Piledriver, and possibly the subsequent Steamroller, CPU cores. They will be fine so long as they have a means to weather the storm. That is what this article is about - someone offering them a rope to tie the sails back so they don't get ripped in the storm. Without money, they'll have to star cutting R&D, and when they do that, they're as good as ripping a hole in the bottom of their boat - they may last a little longer, but they will sink in the not too distant future.
  • 1 Hide
    lpedraja2002 , December 5, 2012 2:51 AM
    I stopped hoping for AMD on its cpus, I'll buy again when they deliver the performance. If they could achieve the same success they have with their GPUs I would gladly buy full AMD on my next upgrade.
  • 0 Hide
    rds1220 , December 5, 2012 3:19 AM
    lpedraja2002I stopped hoping for AMD on its cpus, I'll buy again when they deliver the performance. If they could achieve the same success they have with their GPUs I would gladly buy full AMD on my next upgrade.


    My feelings exactly.
  • -5 Hide
    Cons29 , December 5, 2012 3:38 AM
    i admit i only had amd during the althlon xp days, and my last amd(ati) gpu was a 9500pro (they were better than nvidia that generation)
    but for our own good they better make it, or its monopoly time.

    i got my little brother a 6870(cheap), to help out a bit
  • 2 Hide
    Teeroy32 , December 5, 2012 3:50 AM
    joytech22 I agree mate, if every one bought an AMD cpu for $100 it would go along way in keeping them alive, I bought AMD for my new comp and I'm happy, about to upgrade my Pentium 4 HTPC to an AMD because it can't play 1080 hi-def, with a HD6670 it plays 720 but the cpu max's out on 1080 ans skips, noy sure if I'm gonna get an APU and hybrid crossfire with the radeon or just get a 4 core piledriver, I may play skyrim on it and run emulators but nothing else, I use my desktop gor serious gaming, And this is coming from some one who was a self confessed intell fan boy a couple of years ago, I feel mo AMD means intel will stagnate like the pentium 4 days
  • 0 Hide
    Anonymous , December 5, 2012 4:03 AM
    I bet that the vote of confidence comes from AMD's aspirations of making ARM CPUs. The latest Linux benchmarks show that A15 CPUs can provide about 75% of the instructions-per-clock-per-core of Intel's CPUs. Of course, the A15 core is well under 75% of the size of Intel's cores, and well under 75% of the power consumption, so throw about 64 of those A15 cores into a 125w server CPU using AMD's GPU memory tech, and Intel has no chance.

    This is the inevitable failure of CISC vs. RISC. CISC relies on compilers to take code and find a way to fit it into instructions. Unfortunately, that's a losing proposition once you get into these giant 256 and 512 bit instructions, the compiler always finds itself trying to fit a square peg into a round hole. The FMA stuff can be accelerated to probably 1024 bit and beyond with FP math like convolution, FFT, FIR filtering and so on, but that stuff is never going to be more than 10% of any application, so you're investing huge amounts of effort into perhaps a 5% speedup of a select few apps.
  • 8 Hide
    blazorthon , December 5, 2012 4:19 AM
    warmon6superfragilisticexpialidocious


    I think that there's a "calla" in there somewhere.
  • 3 Hide
    blazorthon , December 5, 2012 4:26 AM
    a15luvverI bet that the vote of confidence comes from AMD's aspirations of making ARM CPUs. The latest Linux benchmarks show that A15 CPUs can provide about 75% of the instructions-per-clock-per-core of Intel's CPUs. Of course, the A15 core is well under 75% of the size of Intel's cores, and well under 75% of the power consumption, so throw about 64 of those A15 cores into a 125w server CPU using AMD's GPU memory tech, and Intel has no chance.This is the inevitable failure of CISC vs. RISC. CISC relies on compilers to take code and find a way to fit it into instructions. Unfortunately, that's a losing proposition once you get into these giant 256 and 512 bit instructions, the compiler always finds itself trying to fit a square peg into a round hole. The FMA stuff can be accelerated to probably 1024 bit and beyond with FP math like convolution, FFT, FIR filtering and so on, but that stuff is never going to be more than 10% of any application, so you're investing huge amounts of effort into perhaps a 5% speedup of a select few apps.


    CISC versus RISC isn't really that important. CISC CPUs are already mostly RISC CPUs that convert CISC instructions into RISC instructions for backwards compatibility.
  • 1 Hide
    Mhawk13 , December 5, 2012 4:52 AM
    We could do the same as Mubadala: buy some share from AMD, this it could be lucrative and we would be helping to fight intel's monopoly.
  • 1 Hide
    blazorthon , December 5, 2012 5:02 AM
    Mhawk13We could do the same as Mubadala: buy some share from AMD, this it could be lucrative and we would be helping to fight intel's monopoly.


    If they go under, then the shares may be worthless. If AMD goes under, a CPU from AMD is still worth something and useful for something.
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