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AMD receives some much needed cash from the Middle East

Things haven't been going AMD's way ever since the acquisition of ATI Technologies in 2006. The company has been assaulted by Intel's Core-based processors in the desktop, server and notebook markets and its graphics offerings still are outgunned by NVIDIA -- even with the newly introduced Radeon HD 3870 and HD 3850.

As a result, the Sunnyvale, California-based company has been taking a beating as most recently observed in its Q3 2007 earnings report. AMD recorded a $226 million USD operating loss and $396 million USD net loss on revenue of $1.632 billion USD. $78 million USD of the loss was attributed to AMD's ATI acquisition.

However, things may finally be looking up for the company. Mubadala Development Company, a United Arab Emirates (UAE) government-funded investment firm based in Abu Dhabi, has acquired an 8.1 percent stake in AMD for $622 million USD. The company received 49 million shares at a price of $12.70. Despite the buy-in, Mubadala will not receive any board representation as a result of the deal.

AMD will receive a total of $608 million USD after repaying Mubadala $14.6 million USD in expenses. AMD plans to use the cash to invest in "research, product innovations and manufacturing excellence." The Business Review reports that some of the funds will be channeled into a $3.2 billion USD chip plant on the Luther Forest Technology Campus in Malta, NY.

"We proudly welcome Mubadala, a world-class investor, to the AMD shareholder family," said AMD Chairman and CEO Hector Ruiz. "This investment strengthens AMD’s ability to deliver customer-centric innovation and choice to the marketplace, creating greater value for all of our shareholders."

For its part, Mubadala's CEO and Managing Director, Khaldoon Khalifa Al Mubarak, added "AMD is a great fit for Mubadala's investment approach -- a spirited competitor and innovator led by a strong and visionary management team. We see significant opportunities for long-term growth and value creation."

Mubadala has been spreading money around quite frequently in recent months. According to Bloomberg, the investment firm captured a 7.5 percent stake ($1.35 billion USD) in the Caryle Group. Some of Mubadala's other investments include Ferrari SpA and SR Technics.

The investment from Mubadala couldn’t have come at a better time for AMD. AMD has faced an incredible amount of debt and not only record losses in Q3 as previously mentioned, but also during Q1 and Q2. The company has also seen the departure of two former ATI executives -- CEO and President David Orton and vice president of worldwide sales Rick Hegberg, as well as executive vice president and chief sales and marketing officer Henri Richard.

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RE: Arab government???
By sj420 on 11/16/2007 4:43:38 PM , Rating: -1
The people that know that quad-core isn't going to be used for a few years (try 3-6 years, maybe even 8) or that don't want to try and upgrade their motherboard, possibly power supply, ram, maybe a case depending on the mobo, etc.

Those are the people that are waiting this out to see if AMD really can shove something out the doors that can at least launch a rebellion against Intel it is worth it. Besides don't get started on shoddy business practices look at what intel is accused of. Also, doesn't china buy a lot of american company stocks, practically all of it, so that they control the company? Seems like there are worse things than taking money from someone that wants to buy your stocks. Besides they doubled the gain vs their operating cost, excluding the net revenue loss. Basically, any fiscal year you aquire a new company (unless that company itself is growing at a rapid rate aswell) you can pretty much expect some losses if not entire net revenue loses because all of the different things that must happen when a company buys another.

Give AMD some credit and give them a few months to pull it all together. My last PC died (the mobo, finally after 6+ years the budget piece of junk biostar board dies that was from my first build- 939/ddr- ancient by todays standards and I could certainly feel that in games with the sluggishness, choppiness, lag, etc) so I have all my parts still laying around. All I need is a case, mobo, processor and ram. Depending on what I get. Being with AMD since I first started building I don't want to shift to intels weird naming setup and what not. Besides all of that creates a new experience where more errors can come up during assembly. However to give it a real-life test I am on an intel C26420 @ 2.13ghz playing stalker at 1440x900 widescreen max settings x2AA x4AF. It runs faster than my old PC because it ran on DDR and this laptop runs on DDR2.

So, I am one of those that is waiting for AMD to show what they can provide to the desktop market. Its getting edgy and the tension is thick enough to cut with a knife. The two companies are releasing things commonly but none of it is interesting. It is what they should have been releasing 6 months ago it seems. So I blame it on the aquisition and transition of companies. It takes time and usually screws the year up, give them a few more quarters in the next fiscal year.

RE: Arab government???
By overzealot on 11/18/2007 8:47:20 AM , Rating: 2
The people that know that quad-core isn't going to be used for a few years (try 3-6 years, maybe even 8.

What about the people who are using their quad-core quite efficiently now? Video encoding/decoding, a few games (ET:QW, Supreme Commander, Solitaire - just kidding), or people that just run a lot of crap all the time benefit from the extra 2 cores.

Just because you wouldn't find it useful, doesn't mean no-one will. Personally I think the Q6600 is great step-up for people with 1066FSB rated mobos.

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