backtop


Print 35 comment(s) - last by Chocobollz.. on Dec 11 at 1:20 AM

AMD will now own about 34.2% of the spinoff

To say it has been a tough year for the computer industry would be an understatement. AMD has been particularly hard hit, despite being the second largest chipmaker around.

In October, AMD announced that it would be spinning off its chip making facilities into a different company with AMD holding 44.4% of the new chip making company. The spin off resulted in a suit brought against AMD by rival chipmaker Intel over alleged license violations caused by the spinoff of AMD's processor making arm.

AMD announced this week that in an effort to reduce its manufacturing costs and adjust to the current state of the economy it would own even less than the previously noted 44.4% of the chip making spinoff. The majority owner of the spun off chip making division was the Abu Dhabi-based Advanced Technology Investment Company (ATIC) and a minority owner was Mubadala Development.

Amendments between AMD and ATIC will have AMD owning 34.2% of the chip making arm and ATIC grabbing 65.8% of the Foundry. An AMD representative said the sale was due to "changing economic times." AMD is fighting for its survival in the face of falling profits and increased competition. AMD announced this week that it was cutting revenue projections by 25% for Q4 2008.

Other amendments between the owners of the Foundry include a restructured agreement that allows Mubadala to purchase 58 million shares of AMD common stock at a revised purchase price equal to the lower of average closing price per share on the NYSE during the 20 trading days prior to and including December 12, 2008; or the average closing price per share of AMD common stock on the NYSE during the 20 trading days prior to the transaction close date.

AMD released a statement saying, "All other material economic terms of the transaction agreements remain unchanged. ATIC will still invest $2.1 billion to purchase its stake in the Foundry Company, of which it will invest $1.4 billion directly in the new entity and will pay $700 million to AMD."



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

RE: My prediction
By Bateluer on 12/9/2008 12:40:11 PM , Rating: 5
Not to mention high prices. Anyone remember when AMD didn't have a high end competitor to Intel's chips? Intel's P2s and P3s were 600 to 800 dollars, with their 'low-end' celerons priced between 100 and 300. It was only 5 months ago that Nvidia wanted to sell you a GTX 280 for 650 dollars, and the 8800 Ultra for 800 several months prior.

AMD is critical to the industry and only a complete fool would want to see them out of business.

In all fairness though, Bankruptcy does not mean they'll be out of business, it means they will reorganize and restructure. Since its their CPU portfolio that's dragging them down, but also contains their most prominent products, I don't know how much restructuring they can do.

Perhaps they can appeal to US Congress with some demonstration boxes of their upcoming Phenom IIs?


RE: My prediction
By Ringold on 12/9/2008 2:25:51 PM , Rating: 2
quote:
In all fairness though, Bankruptcy does not mean they'll be out of business, it means they will reorganize and restructure. Since its their CPU portfolio that's dragging them down, but also contains their most prominent products, I don't know how much restructuring they can do.


Right, some of this talk sounds like the talk about Detroit. Big companies just don't disappear in to the ether.

I've said it for years now. AMD will roll over; whether or not it enters bankruptcy or not I don't know. But someone with deep pockets, from the Middle East or Asia, will come in and buy them out. With access to fresh piles of cash, hopefully AMD could then make investments in its future. There's no way nobody would buy it or try to make a go at entering the busienss; unlike the airline industry, there really is a lot of money to be made here. AMD offers a (cheap) way to enter a market that otherwise is nearly impenetrable.

I'm looking forward to it. The sooner AMD fails and gets new owners the sooner we'll get new products.


"I want people to see my movies in the best formats possible. For [Paramount] to deny people who have Blu-ray sucks!" -- Movie Director Michael Bay

Related Articles
AMD Cuts 4Q Revenue Forecast 25 Percent
December 9, 2008, 5:43 AM
AMD Splits in Two
October 7, 2008, 9:37 AM













botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki