AMD Financial News

[Martimus]

Originally posted by: Idontcare
AMD does not own THE patent on IMC. Their implementation is covered by their patents, as Intel's implementation is covered by their own patents. Don't forget Intel had IMC since 386SL...AMD's IMC was not a new concept, just timely for the value-add it provided their product lineup at the time.

Yeah, I was really going out on a limb with that. (Shot down again, I may add.)

The 45nm conversion makes perfect sense as well. It explains why it wasn't done over the last couple of years. I was just trying to come up with a reasonable explanation for the timing, since it seems like a reaction to something that has been going on or a long time. The timing made no sense to me, but you put it in the proper perspective and now it jives. Thanks.

 

[Viditor]

Some things to keep in mind...

1. AMD will still own 44% of The Foundry Co.
2. Since it's less than 50%, Foundry profits and losses are not part of AMD's books.
3. Probable Foundry Co customers should include AMD (both graphics and CPU), IBM, and TSMC overflow (there's a lot of speculation that this is why TSMC has been talking to AMD about this deal for awhile now).
4. One of AMD's most valuable IP products is APM, which they have licensed (not sold) to The Foundry Co. This means that they are still free to license that IP elsewhere down the track as well.
5. With Hector gone completely from AMD (no longer Board Chairman), I expect a big change in management in the near future...

All JMHO

 

[Phynaz]

Originally posted by: Viditor

Originally posted by: aldamon
Can someone explain how shareholders avoid being diluted by this deal? Going up like crazy in PM.

Shareholders WILL be diluted...but the majority of AMD's debt just went away (or will shortly), so it's a mixed bag. However, it makes AMD much more secure than they were during the current market crisis...

$1.2B is a long, long ways from $5.2B.

I wouldn't call that a majority. Perhaps you have a misunderstanding of the deal.

 

[KingstonU]

"AMD is also giving up Hector Ruiz, who will be leaving AMD to become the Foundry Company?s new chairman. "


The Foundry Company is a still born with Hector being left to take care of things. It could be great with someone else at the helm

 

[Idontcare]

Did anyone catch the CNBC interview on TV this morning with Dirk and Gross (or was it Cross)?

IMO they did a crappy job selling the interviewers (and the viewers) on the deal. Lots of canned buzzwords and zero substance. Quite a letdown given how rarely AMD gets such media exposure. Instead of hyping upcoming products, or giving any details on how the foundry will help AMD make money, Dirk just used his time to string together a series of adjectives to describe how great it is for everyone.

He did reiterate they worked on this for nearly a year, so it was complete BS when they claimed Dirk was misquoted in that interview a month ago. Major lame.

 

[ViRGE]

I'm not surprised the CNBC thing didn't go well. The entire conference call was like a 6th grade play with everyone struggling to read pre-made statements.

 

[JACKDRUID]

this is sad sad news... I hope we don't convert back to pre-Pentium days, where Intel were able to charge super high price for their cpus...

 

[Idontcare]

Originally posted by: ViRGE
I'm not surprised the CNBC thing didn't go well. The entire conference call was like a 6th grade play with everyone struggling to read pre-made statements.

That's actually a pretty good description of the live interview too.

They spent a year working on the details but only 5 minutes prep'ing to talk about them.

 

[Martimus]

Anandtech now has an article about the split. It doesn't say much more than we already know, but does give a layout of the debt, and how the fabs will be structured.

Originally posted by: Idontcare
[

Originally posted by: Martimus
If this is all like the spin-off of Delphi (which I was a part of), it is more an effort by AMD to rid themselves of an unprofitable portion of their business. GM never intented Delphi to be profitable, nor did they care.

Oh I fully agree that AMD could care less (to an extent) whether the Foundry Co is profitable or survives any longer than AMD needs them to survive (TSMC HK/MG is 28nm in 2010, IBM is HK/MG 32nm in 2010, there are options)...but clearly the other party had to be convinced they were taking a winning position here.

I don't know who bought Delphi, they got duped and lost. But the Abu Dhabi side of this had to become confident this was going to make them money somehow.

I don't think anyone bought Delphi. It was just a spin-off and the stock split. So, the GM shareholders really bought Delphi. I tried to look up if any major investor put a lot of money into the new company, but I couldn't find anything other than the fact that each GM stock was given ~0.64 Delphi Stocks.

It was really a good move for both GM and Delphi, even though it didn't work out. Delphi was run much better without the beauocracy of GM hoarding over it, although most of that was inherent in the new management. That was starting to filter out though, since it had to for us to survive. It is amazing how much more efficient you can be when fear is your driving motivator. Even so, it happened too late, and the legacy costs were too high to compete with competitors. The competition for The Foundry Company is nothing like what we had though. I doubt that TSMC and Charter have overhead costs an order of magnitude lower than The Foundry Company's overhead costs, like what happened with us. You would know better than me, but I would think that the operating costs between them are pretty similar. The Union, and having too many assets (although mostly labor costs really) put us at a huge disadvantage to the thousands of competitors we had. TFC doesn't seem like they even have that many competitors to begin with, so they probably have a better chance at survival.

 

[Roy2001]

So AMD is officially Arabic Micro Devices now. LOL.

 

[Idontcare]

An opinion piece on EETimes:

Is there a need for a new silicon foundry company? Quick answer: No!

Most foundries are losing money and the business is tough. It requires large sums of capital and good technology. Most of all, competition is fierce in both the trailing- and leading-edge segements.


Right now, there are too many pure-play foundries in the market. On the leading-edge, for example, Chartered, SMIC, TSMC and UMC represent the bulk of this market. IBM, Samsung and Toshiba are also involved in the leading-edge foundry segment.


But only TSMC consistently makes a profit in the arena. The rest of the pure-play vendors struggle--at least on the bottom line. When times are good, they struggle. When times are bad, they suffer.

http://www.eetimes.com/news/se...VN?articleID=210800151

 

[Alienwho]

So what does this mean for Joe-Shareholder?

 

[Idontcare]

Originally posted by: Alienwho
So what does this mean for Joe-Shareholder?

Another chance to buy high before we head lower next month. Historically speaking, tech stocks do not do so well in recessions.

 

[Phynaz]

Originally posted by: Alienwho
So what does this mean for Joe-Shareholder?

Your personal piece of AMD is 13% smaller today than it was yesterday.

Not including the asset writedowns AMD will have take on the fabs themselves.

 

[Idontcare]

Uh, not good:

Intel has 'serious questions' about AMD plan

One would assume that AMD of course negotiated approval with Intel behind the scenes before publicly announcing this deal. They took a freaken year to get it done after all. But this suggests there is a lawsuit about to hit the fan in a day or two.

 

[rjc]

Originally posted by: Idontcare
Uh, not good:

Intel has 'serious questions' about AMD plan

One would assume that AMD of course negotiated approval with Intel behind the scenes before publicly announcing this deal. They took a freaken year to get it done after all. But this suggests there is a lawsuit about to hit the fan in a day or two.

How would what's happened be legally any different to when chartered(i think) was subcontracting for amd a few years ago?

 

[ViRGE]

Originally posted by: Idontcare

Originally posted by: ViRGE
I'm not surprised the CNBC thing didn't go well. The entire conference call was like a 6th grade play with everyone struggling to read pre-made statements.

That's actually a pretty good description of the live interview too.

They spent a year working on the details but only 5 minutes prep'ing to talk about them.

To be fair, once they got to the Q&A session on the conference, they were on the ball. The only trouble they had was reading their prepared statements.

 

[bryanW1995]

Originally posted by: Viditor

Originally posted by: ViRGE
Yeah, I got in. Stupid IE.

As a side note...it looks like the market likes the financing. AMD is up ~28% in pre-market

To add some notes...

1. Hector Ruiz is leaving AMD to become the Chairman at the new Foundry company.
2. Doug Grose will relinquish his current role as AMD?s senior vice president of manufacturing operations to become chief executive officer of The Foundry Company
3. ATIC (Abu Dhabi) will end up with 19.3% of AMD and 55.6% of the Foundry Company.
4. ATIC is giving AMD a total of $2.1 Billion in cash, assuming $1.2 Billion of AMD's debt, and guaranteeing up to $6 Billion for future development of the Foundry Company.spending

I should also mention that it will be much easier now for AMD to acheive profitability each quarter as they have cut out their largest expense...

amd was up so much certainly because hector is now gone. the freakin' dow is down about 20% in the past 2 weeks and amd has zoomed up thanks to good ole' hector's departure. nice. IT'S ABOUT FREAKIN' TIME AMD. long live dirk.

 

[bryanW1995]

Originally posted by: Martimus

Originally posted by: Idontcare
I guess this puts all that "AMD can't spin-off their fabs because they will lose their x86 license" debate to rest.

It also puts to rest the lies about Dirk Meyer being misquoted. There clearly was no communication error and Dirk meant exactly what he said. Can't believe AMD corrected that interview to become a packet of lies as well.

Same old AMD, new ownership will hopefully bring some change.

Next question is what will the Foundry Co. do to make money. Just because AMD spun them off doesn't suddenly make the fabs profitable.

I see them going hard after the SUN foundry business (currently TSMC) as well as the high-performance GPU business. Can you imagine Nvidia chips being pumped out of Dresden :Q

They have to do something other than just make AMD chips. If AMD thought making AMD's chips was going to be profitable (based on what they know that we don't about Deneb/Shanghai as well as Bulldozer and Fusion) then AMD would have surely kept their fabs inhouse.

So the new operation sees itself as viable based on taking business from TSMC/UMC/Chartered. And that's a tall task given IBM's very efforts to accomplish the same for the past decade.

If this is all like the spin-off of Delphi (which I was a part of), it is more an effort by AMD to rid themselves of an unprofitable portion of their business. GM never intented Delphi to be profitable, nor did they care. They just lumped enough profitable portions into the deal to keep them afloat for a few years while they found new suppliers to buy parts from. One thing we did after the spin off was work our butts off to get new customers for our components. I can say that we generally had better facilities and quality than our competitors, but also a much higher operating cost. We tried to cut the negative (operating costs) while keeping the positive (higher quality), but success was mixed and the company is now bankrupt. But it did seem like my particular division at least was making headway before the collapse at the top, so I can see it working.

yeah, delphi's bankruptcy had absolutely nothing to do with the union's refusal to renegotiate their ridiculous contracts. if they couldn't find a way to be profitable during the past few years imagine what would have happened to them in today's climate...that reminds me of several dealers in my market. I believe that we'll lose 10-15 % of the dealerships in this country in the next 12 mos. Good times for the rest of us...

 

[bryanW1995]

Originally posted by: Viditor
Some things to keep in mind...

1. AMD will still own 44% of The Foundry Co.
2. Since it's less than 50%, Foundry profits and losses are not part of AMD's books.
3. Probable Foundry Co customers should include AMD (both graphics and CPU), IBM, and TSMC overflow (there's a lot of speculation that this is why TSMC has been talking to AMD about this deal for awhile now).
4. One of AMD's most valuable IP products is APM, which they have licensed (not sold) to The Foundry Co. This means that they are still free to license that IP elsewhere down the track as well.
5. With Hector gone completely from AMD (no longer Board Chairman), I expect a big change in management in the near future...

All JMHO

viditor, you must be dancing a jig right about now... The king is dead, long live the king... mark my words everyone, stay away from the foundry company like the plague. hector has already ****ed up two companies, now he gets to perfect his company-destroying behavior with #3.

This whole hector ruiz thing reminds me of my mother in law. She has a new job every 6 mos. She always gets fired for a different reason. It's never her fault. Hector is kinda like that, except that he talks such a good game that he DOESN'T GET FIRED. When you're the ceo, especially for a long period of time, the ENTIRE COMPANY, GOOD OR BAD, IS BECAUSE OF WHAT YOU'VE DONE. How's amd doing lately??? Take my advice, short the foundry company asap.

 

[bryanW1995]

Originally posted by: rjc

Originally posted by: Idontcare
Uh, not good:

Intel has 'serious questions' about AMD plan

One would assume that AMD of course negotiated approval with Intel behind the scenes before publicly announcing this deal. They took a freaken year to get it done after all. But this suggests there is a lawsuit about to hit the fan in a day or two.

How would what's happened be legally any different to when chartered(i think) was subcontracting for amd a few years ago?

yeah, that will go over really well in the anti-trust lawsuit that intel is in right now...wow, just wow. intel is going to obliterate amd AND themselves one of these days...

 

[Nemesis 1]

Lets not turn this into AMD vs. Intel thing . We all know we need AMD strong. But what AMD is going does seem to break their agreement. So lets see what happens here. I personnally think its a bad move by AMD . TO little to late. But lets hope AMD isn't in court over this one. If you have stock remember your on a teeter tooter. Anything can happen here . I bet on good things happening . But that doesn't mean jack shit.

 

[Martimus]

Originally posted by: bryanW1995
yeah, delphi's bankruptcy had absolutely nothing to do with the union's refusal to renegotiate their ridiculous contracts. if they couldn't find a way to be profitable during the past few years imagine what would have happened to them in today's climate...that reminds me of several dealers in my market. I believe that we'll lose 10-15 % of the dealerships in this country in the next 12 mos. Good times for the rest of us...

I'm not sure why you feel that the unions high costs had nothing to do with the higher operating costs we had that kept us from being able to compete with our competitors unless we sold at a loss. they actually did renogotiate their contracts at the end, but it was too little too late by then. I mean every union employee cost us ~$130K a year, while us salaried employees were only around $80-$90. (This includes benefits) The union just had insane benefits, that cost over $70,000 per person per year. But that wasn't the only reason for the higher operating costs. We had a lot of unused factory space, and old equipment that increased overhead, and we had the GM way of promoting poor performers to get them out of the way.

 

[Idontcare]

Originally posted by: rjc

Originally posted by: Idontcare
Uh, not good:

Intel has 'serious questions' about AMD plan

One would assume that AMD of course negotiated approval with Intel behind the scenes before publicly announcing this deal. They took a freaken year to get it done after all. But this suggests there is a lawsuit about to hit the fan in a day or two.

How would what's happened be legally any different to when chartered(i think) was subcontracting for amd a few years ago?

The difference comes down to percentage of production that is technically outsourced.

The generally accepted interpretation of the x86 license deal is that AMD was allowed to outsource no more than 20% of their production. It was this "fact" that many cited as the sole reason that AMD did not spin-off their fabs earlier in their spiral.

At any rate, I'm not trying to weigh in with an opinion either way, but apparently Intel is expressing that they have reason to believe all will not be deemed OK when the contracts are finally released to the public.

My opinion here that I am trying to express is that I am surprised that Intel was not brought up to speed behind the scenes to ensure the new AMD/Foundry Co deal had as few dark clouds hanging over it as possible. Leaving Intel in the dark, ready to make dark clouds over the deal, is again not in AMD's shareholders best interest. So once again it would appear AMD's leadership just can't help themselves, which is not surprising really.

 

[Foxery]

Hmm. Will Foundry Company have publicly traded stock? I don't see that in the articles.

And is that its full name? (Completely generic?)