AMD admits it overpaid for ATI

[trajan2050]

AMD (AMD) is bleeding cash ? the company reported a loss of $396 million last quarter alone. That puts AMD in a tricky financial position. The company has more than $5 billion in debt, much of it from the acquisition of graphics chipmaker ATI, but it it needs cash both to finance future projects and to pay for earlier acquisitions. (The ATI purchase is still causing headaches; AMD today said it will take a significant writedown from the $5.4 billion transaction, a possible sign it overpaid.)
http://bigtech.blogs.fortune.c...md/?source=yahoo_quote

http://www.reuters.com/article...260337320071212?rpc=44

NEW YORK, Dec 12 (Reuters) - Microchip maker Advanced Micro Devices Inc (AMD.N: Quote, Profile, Research) said on Wednesday it plans to write down the value of its 2006 acquisition of ATI Technologies.

 

[NoStateofMind]

Maybe they did, but I'm confident the ATi purchase will pay off in the end.

 

[razor2025]

Honestly, I don't see why ATI purchase is bad for AMD. The Radeon series is making some profit for AMD (although not a significant part of their revenue). Long-term wise, ATI's IP asset should help AMD. If the "Fusion" project indeed fails to deliver, THEN AMD overpaid for ATI big time.

On a side-note, ATI's graphics business extends well beyond the desktop. Their chips can be found in mobile phones and consumer TVs. I think that diversification is much more useful than having the "fastest GPU" for next 6-months. I don't see nVidia having much product diversification at all.

 

[SexyK]

Originally posted by: razor2025
Honestly, I don't see why ATI purchase is bad for AMD. The Radeon series is making some profit for AMD (although not a significant part of their revenue). Long-term wise, ATI's IP asset should help AMD. If the "Fusion" project indeed fails to deliver, THEN AMD overpaid for ATI big time.

On a side-note, ATI's graphics business extends well beyond the desktop. Their chips can be found in mobile phones and consumer TVs. I think that diversification is much more useful than having the "fastest GPU" for next 6-months. I don't see nVidia having much product diversification at all.

You mean nVidia's technologies for use in mobile phones and other handheld devices, consoles, supercomputers, and server and workstation motherboards isn't diversification, even on top of their consumer GPU and chipset businesses?

 

[dreddfunk]

NVIDIA is certainly as diversified in the GPU-based market as ATI, but I'm not sure that's the real issue. AMD acquired ATI in order to become a true 'platform' company--delivering processors, chipsets and graphics, coordinated for specific needs/uses.

Pre-merger, ATI and NVIDIA were both largely headed in the same direction: leveraging the extreme parallel processing power that their GPUs had, for any and all applications that could benefit from it (mobile graphics, workstations, scientific calculations, etc.), as well as developing chipsets for the x86 market.

Post-merger, the significant difference is AMD's x86 CPU IP and its manufacturing assets. The IP marriage is natural. Devices will need different types of processing power for the foreseeable future. Also, as devices continue to get smaller, different issues arise: power usage, heat and size limitations become heightened. In that type of environment, integrated 'platforms' make a whole lot of sense (hence the reason Intel hit on a gold mine with Centrino in the laptop market), and make manufacturing simpler for OEMs.

Having said that, I don't know if this is going to work in the long run, simply because neither company seemed to be run well pre-merger, and there are serious doubts that they have been run well post-merger. If they can get out of their own way and stay afloat, AMD might become a powerhouse in 10 years.

Boy that might be the biggest *might* of all time, however.

 

[Wreckage]

AMD should have bought VIA. Would have saved them a bundle and given them everything they needed.

At the very least they could have waited for ATIs price to drop further. As the failed R600 launch would have cut their stock price by a large margin.

 

[hooflung]

Congratulations, you have mis interpreted an accounting term to stir up a ruckus.

 

[Ackmed]

First off, the quote you posted, was not from AMD. Secondly, the source said "a possible sign it overpaid".

Your topic title is not only wrong, its very misleading. At least try to be factual.

 

[trajan2050]

Take the time to read the articles before replying. AMD has said they WILL take a material charge relating to the purchase as the current value is well below sale price.

 

[chizow]

If they're writing it down they are admitting they overpaid for it, but its still a great move by AMD. The write-down will get lost in the big #s on the balance sheet side, but it'll reduce that big fat number in parentheses that blows up every single one of their quarterly P&Ls.

 

[trajan2050]

There's nothing special about this action other than to illustrate what kind of leadership AMD has had lately.

 

[Ackmed]

Originally posted by: trajan2050
Take the time to read the articles before replying. AMD has said they WILL take a material charge relating to the purchase as the current value is well below sale price.

Care to find me the quote where AMD admitted to overpaying for ATi in this article? They dont. Obviously you didnt read the article, or you just felt like posting flame material.

 

[trajan2050]

Perhaps english isn't your primary language. AMD has listed ATI as an asset on their balance sheet, based on the 5 bilion plus they paid for it and other factors. They are saying they will write off a substantial part of this asset as the acquisition has not performed financially as they had hoped. They have not yet announced the exact dollar amount, only saying it will be substantial.

http://money.cnn.com/2007/12/1...htm?source=yahoo_quote

SAN JOSE, Calif. -- Advanced Micro Devices Inc. acknowledged Wednesday it overpaid in its $5.6 billion acquisition of graphics chip maker ATI Technologies Inc., adding to the deepening financial woes of the slumping semiconductor company.

Sunnyvale-based AMD, the world's No. 2 maker of microprocessors behind Intel Corp., said in a filing with the Securities and Exchange Commission it will have to write down the value of the goodwill estimate it attached to ATI when it bought the company in October 2006.

AMD said it does not currently know how big the charge will be.

This is news that is of interest to people in tech.

 

[SickBeast]

The industry would have been better served by ATI and AMD remaining seperate.

I don't see why AMD was unwilling to pay ATI to licence their GPUs for use in the Fusion project. ATI created Xenos for the Xbox 360; it could have been a similar type of arrangement (and much cheaper for AMD).

 

[Phynaz]

Originally posted by: Ackmed

Originally posted by: trajan2050
Take the time to read the articles before replying. AMD has said they WILL take a material charge relating to the purchase as the current value is well below sale price.

Care to find me the quote where AMD admitted to overpaying for ATi in this article? They dont. Obviously you didnt read the article, or you just felt like posting flame material.

What the heck do you think a goodwill writedown is?

 

[ronnn]

ati made a huge mistake joining with amd. Oh well, such is life.

 

[tuteja1986]

Arrg :! No they didn't ... blog are ran by stupid people that role any stupid quote. I think you should look at the ruinterview before you start going "OMG... I was right". especially you ronnn , trajan2050 and Wreckage, anything to watch AMD suffer. Anyways watch his CNBC Europe market watch interview. Totally different view from that stupid article interpretation.

 

[taltamir]

You know, I was just reading an article where the vice pres of AMD was interviewed about the TLB errata... They asked him about weather they feel the speed impacts on phenom are killing the spider platform and he replied that: As a platform, it is more then just a CPU, in fact the weaker CPU doesn't matter so much because of their superior graphic cards, which make the platform a more attractive choice despite the CPU weakness...

I mean he flat out admitted the CPU is worse and that the only reason you would want it is because they have better video cards (which last I checked they don't, they do have CHEAPER video cards though).

 

[tcsenter]

Advanced Micro Devices Inc. acknowledged Wednesday it overpaid in its $5.6 billion acquisition of graphics chip maker ATI Technologies Inc....as the current value is well below sale price.

Well it is now! It wasn't "over priced" until after AMD got ahold of it. :roll:

Pre-merger, ATI and NVIDIA were both largely headed in the same direction: leveraging the extreme parallel processing power that their GPUs had, for any and all applications that could benefit from it (mobile graphics, workstations, scientific calculations, etc.), as well as developing chipsets for the x86 market...Post-merger, the significant difference is AMD's x86 CPU IP and its manufacturing assets. Post-merger, the significant difference is AMD's x86 CPU IP and its manufacturing assets. The IP marriage is natural.

A lot of good it does them. With no fab assets to its name, NVIDIA is kicking AMD's ass all the way to its first billion dollar quarter, in all the areas that an AMD + ATI marriage of IP + fab is supposed to benefit AMD over NVIDIA and Intel. By the time AMD can execute something out of this 'natural marriage' (made in hell apparently) that isn't six months to one year behind the competition, NVIDIA will have plenty of time and cash to do whatever it wants in integrated SoC field. It already has SoC products which use proven ARM/MIPS processor cores.

AMD may have an edge over NVIDIA in the mobile and embedded x86 market, but then embedded x86 has a VERY LONG way to go before it can rival the domination of ARM/MIPS/PPC. And on that front, AMD will have to compete with some formidable products being developed by an Intel firing on all cylinders as of late (e.g. Tolapai, Menlo, Montevina, Moorestown, etc). I don't see much coming from AMD to deal with Intel there, either.

AMD still has pretty much the same Geode LX and NX parts that predate the merger. Its most recent 'embedded' offerings are nothing more than low-voltage versions of its none-too-efficient mobile and desktop processors ala Geode NX = Athlon XP-M.

 

[ManWithNoName]

Originally posted by: trajan2050
Perhaps english isn't your primary language. AMD has listed ATI as an asset on their balance sheet, based on the 5 bilion plus they paid for it and other factors. They are saying they will write off a substantial part of this asset as the acquisition has not performed financially as they had hoped. They have not yet announced the exact dollar amount, only saying it will be substantial.

http://money.cnn.com/2007/12/1...htm?source=yahoo_quote

SAN JOSE, Calif. -- Advanced Micro Devices Inc. acknowledged Wednesday it overpaid in its $5.6 billion acquisition of graphics chip maker ATI Technologies Inc., adding to the deepening financial woes of the slumping semiconductor company.

Sunnyvale-based AMD, the world's No. 2 maker of microprocessors behind Intel Corp., said in a filing with the Securities and Exchange Commission it will have to write down the value of the goodwill estimate it attached to ATI when it bought the company in October 2006.

AMD said it does not currently know how big the charge will be.

This is news that is of interest to people in tech.

Hey man, thanks for the links, interesting reads as I hadn't come across this yet. By the way, don't sweat the Trolls. I use to let it bother me, not so anymore. Ignore them and let the Mods (Keys) sort it out.

 

[tuteja1986]

Originally posted by: tcsenter

Advanced Micro Devices Inc. acknowledged Wednesday it overpaid in its $5.6 billion acquisition of graphics chip maker ATI Technologies Inc....as the current value is well below sale price.

Well it is now! It wasn't "over priced" until after AMD got ahold of it. :roll:

Pre-merger, ATI and NVIDIA were both largely headed in the same direction: leveraging the extreme parallel processing power that their GPUs had, for any and all applications that could benefit from it (mobile graphics, workstations, scientific calculations, etc.), as well as developing chipsets for the x86 market...Post-merger, the significant difference is AMD's x86 CPU IP and its manufacturing assets. Post-merger, the significant difference is AMD's x86 CPU IP and its manufacturing assets. The IP marriage is natural.

A lot of good it does them. With no fab assets to its name, NVIDIA is kicking AMD's ass all the way to its first billion dollar quarter, in all the areas that an AMD + ATI marriage of IP + fab is supposed to benefit AMD over NVIDIA and Intel. By the time AMD can execute something out of this 'natural marriage' (made in hell apparently) that isn't six months to one year behind the competition, NVIDIA will have plenty of time and cash to do whatever it wants in integrated SoC field. It already has SoC products which use proven ARM/MIPS processor cores.

AMD may have an edge over NVIDIA in the mobile and embedded x86 market, but then embedded x86 has a VERY LONG way to go before it can rival the domination of ARM/MIPS/PPC. And on that front, AMD will have to compete with some formidable products being developed by an Intel firing on all cylinders as of late (e.g. Tolapai, Menlo, Montevina, Moorestown, etc). I don't see much coming from AMD to deal with Intel there, either.

AMD still has pretty much the same Geode LX and NX parts that predate the merger. Its most recent 'embedded' offerings are nothing more than low-voltage versions of its none-too-efficient mobile and desktop processors ala Geode NX = Athlon XP-M.

Also as soon as ATI was bought , ATI lost 250million revenue alone form Intel Chipset deal. Also then none of ATI mobo partner didn't want to make Intel ATI motherboards because they didn't want to make Intel unhappy. Only one partner released the ATI 775 RD600 mobo and it lacked proper cooling in south/north bridge which causes it overheat which made overclocker unhappy. So it didn't sell well and that was then end of ATI intel 775 chipset ;( . AMD also screwed up ATI client base in Mobile phone market as they lost samsung deal. ATI was actually doing pretty good before AMD bought them , they were actually moving away from desktop GPU to mobile,tv setbox,server , DVD and other appliance market. ATI did ship 100 Million Imageon Media Processors but then as soon AMD bought them which made intel their enemy which caused them to loose half their client base to Nvidia. if anyone remember , in 2005 to early 2006 , ATI and Intel were good friends.

 

[hooflung]

Only to computer nerds does the fact that a 3.2ghz model Athlon 64 X2 6400 runs only with an 2.66ghz C2D. Fact is, they cost about the same. Overclocking a C2D is something that normal people could care less and Motherboard platforms are still Very strong on AMD because people don't have to put a north bridge on the board or keep northbridge R&D going for two platforms. There are only a few games that make use of anything over 2.6ghz C2D quality speed and to the people that will matter to they already tweak their systems despite the platform.

To the masses, the difference between playing World of Warcraft at 60FPS versus 75FPS when purchasing a new PC at walmart or best buy means jack shit if the prices are down. Right now, the AMD's are still putting out volume there. AMD has to do this to make room for all the potential ATI lost on its own. However, only on computer forums can people try to speculate what is going to happen for AMD/ATI and that isn't going to stop them from trying to pull off the Spider and Fusion ideas, which are very solid. Oh, and the Phenom isn't that bad of a chip. Once it gets quantity up and the Fab in germany is sold to TSMC then AMD should be back in business. Also, the TSMC partnership and fab sale is a direct benefit from purchasing ATI. Doom and Gloom indeed =/