AMD's move into ARM arena: Forbes source

[pelov]

Solid short term strategies

Short term strategies are a dime a dozen because they are just that, short term. AMD needs a long term solution to a long term problem.

ATI was a move in that direction, they just need to do something more with their $5B investment versus what they have done with it so far. (or spin it off and invest the proceeds into another technology direction that is more suited to AMD's management capabilities)

I think he means short term they need something that will inject some cash into the company. Unfortunately, there's no such as "short term strategy" when microchips are concerned.

It wouldn't surprise me if the rumors were true regarding Kabini and the AM3+ Steamroller derived products being delayed or perhaps the latter even cancelled outright. The x86 war is one they lost years ago and attempting to battle back a whole 2 nodes behind your competitor isn't a solid strategy.

 

[Medikit]

Just wanted to say that AMD makes a great product and it is hard to compete with Intel. They have come a long way since the K6. All good things come to the end and it hurts a little to watch them die.

 

[Idontcare]

I think he means short term they need something that will inject some cash into the company. Unfortunately, there's no such as "short term strategy" when microchips are concerned.

It wouldn't surprise me if the rumors were true regarding Kabini and the AM3+ Steamroller derived products being delayed or perhaps the latter even cancelled outright. The x86 war is one they lost years ago and attempting to battle back a whole 2 nodes behind your competitor isn't a solid strategy.

Only thing AMD can do at this point to inject cash is to sell off the GPU division. I don't think they have anything left to sell that they can sell (they can't sell their x86 division).

If they get cheap though it might be interesting to see if someone attempts to take them private, like what happened with NXP and Freescale.

 

[Ferzerp]

How would they sell off the GPU division when they've decided to tie it in with their CPU designs?

Suddenly, the one CPU they have worth considering (though the GPU performance still isn't enough that I personally think it is compelling), would be missing the only halfway-ok part of it.

 

[Idontcare]

How would they sell off the GPU division when they've decided to tie it in with their CPU designs?

Suddenly, the one CPU they have worth considering (though the GPU performance still isn't enough that I personally think it is compelling), would be missing the only halfway-ok part of it.

Same way they sold off their fabs but still got their existing chips manufactured - sign a contract with the new owner such that AMD licenses the GPU IP needed to keep going with their APUs for some pre-determined period of time.

I'm not saying it is ideal or makes financial sense, I'm just saying it is the only thing I can think of that AMD could jettison if they were truly looking for some quick cash. They've pretty much sold everything else at this point.

 

[mrmt]

Only thing AMD can do at this point to inject cash is to sell off the GPU division. I don't think they have anything left to sell that they can sell (they can't sell their x86 division).

If they get cheap though it might be interesting to see if someone attempts to take them private, like what happened with NXP and Freescale.

I doubt that they would do this either.

ATI is subsidizing AMD CPU business for a long time, by either making AMD not pay royalties for the iGPUs and generating small but steady cash flows that help to plug the hole the CPU division leaves in the company.

Plus, dGPU is a shrinking business. Both Intel and AMD are keen to bring more power to the iGPU and once both companies decide something is gonna happen, it's because it will. Whatever market is left for the dGPU it will be far smaller than it is today.

Even Nvidia is looking for an exit strategy, which they first tried with GPGPU and then they became an ARM player. So no, ATI sale is a no go. Even if someone was crazy enough to buy the business, it would not be for a significant amount of money, or at least money that would make difference for AMD.

 

[MaxPayne63]

I doubt that they would do this either.

ATI is subsidizing AMD CPU business for a long time, by either making AMD not pay royalties for the iGPUs and generating small but steady cash flows that help to plug the hole the CPU division leaves in the company.

Plus, dGPU is a shrinking business. Both Intel and AMD are keen to bring more power to the iGPU and once both companies decide something is gonna happen, it's because it will. Whatever market is left for the dGPU it will be far smaller than it is today.

Even Nvidia is looking for an exit strategy, which they first tried with GPGPU and then they became an ARM player. So no, ATI sale is a no go. Even if someone was crazy enough to buy the business, it would not be for a significant amount of money, or at least money that would make difference for AMD.

I think $5.4bn would make quite a lot of difference for AMD. :whiste:

 

[ShintaiDK]

I think $5.4bn would make quite a lot of difference for AMD. :whiste:

ATI today would barely, if even be worth 10% of that.

 

[mrmt]

I think $5.4bn would make quite a lot of difference for AMD. :whiste:

The entire company is worth 1.5 billion, give or take few millions. I don't think that they would be able to sell it for, let's say, something greater than 600 million, and that would further erode their operating results at the CPU division, as one of the probably source of revenues of the new ATI would be royalties from AMD APUs.

 

[Jaydip]

I think he means short term they need something that will inject some cash into the company. Unfortunately, there's no such as "short term strategy" when microchips are concerned.

It wouldn't surprise me if the rumors were true regarding Kabini and the AM3+ Steamroller derived products being delayed or perhaps the latter even cancelled outright. The x86 war is one they lost years ago and attempting to battle back a whole 2 nodes behind your competitor isn't a solid strategy.

Correct .AMD needs to deliver now not 18 months later.This may look good on paper but given the circumstances it will be difficult for them to surive for another 18 months.

 

[Keysplayr]

Short term is having a bake sale. Long term would be a strategy that took place not a whole lot long after Read took the helm at AMD. Unfortunatly it doesn't look like he has enough time to see it though and he even says this. ARM is just a way to TRY to inflate the worth of AMD for a fire sale. Time to get all the money possible for the shareholders.

 

[Fox5]

ATI today would barely, if even be worth 10% of that.

I think ATI on it's own would be worth more than AMD combined. It's the cpu division's poor earnings that drive down the value of the company. ATI would be a more viable company at this point.

 

[mikeymikec]

If another company bought AMD, could they use AMD's patents against Intel?

 

[sontin]

I think ATI on it's own would be worth more than AMD combined. It's the cpu division's poor earnings that drive down the value of the company. ATI would be a more viable company at this point.

What? The CPU division is bringing the money. If the CPU division is down than the value of the company is affected.

Revenue for the CPU business was 2,7x higher than the revenue of the gpu division in Q3.

 

[ShintaiDK]

I think ATI on it's own would be worth more than AMD combined. It's the cpu division's poor earnings that drive down the value of the company. ATI would be a more viable company at this point.

If that was the case, someone would have bought AMD and spunoff the GPU division.

In short...no.

The GPU division can barely many any money on discrete cards. Its not far from being in the same area as AMDs CPUs financially. And dont tell me its the APUs that drains the GPU division in terms of R&D.

 

[mrmt]

I think ATI on it's own would be worth more than AMD combined. It's the cpu division's poor earnings that drive down the value of the company. ATI would be a more viable company at this point.

Well, not really.

ATI "subsidizes" AMD by not making it pay for graphics IP. Once you spin off ATI you will have to somehow change this relationship.

The new ATI would have two sources of revenue, one being dGPU, which FWIW is a shrinking market, and the other being royalties from their iGPU sold with AMD chips.

But what are the chances of a crippled company like AMD be able to afford some 100-200 million per year in royalties? The same of a snowball in the Saara.

So in the end AMD cannot live without ATI and ATI would not be anything too interesting if it goes single.

I feel bad for the ATI and Seamicro guys. They had very fine companies but management made the wrong decision of tie themselves up with AMD. They could not have chosen a worse partner.

 

[mrmt]

If another company bought AMD, could they use AMD's patents against Intel?

No. If AMD is acquired, Intel receives the entire AMD patent portfolio for CPUs.

 

[Edgemeal]

No. If AMD is acquired, Intel receives the entire AMD patent portfolio for CPUs.

Unless Intel pays for them they don't get anything.

AMD has around 4,400 patents of their own, If you bought AMD (and their IP) and wanted to make x86 chips then you would have to renegotiate an x86 license with Intel since that is not transferable, other then that you would be free to use any of AMD's IP to make any other kind of chips.

 

[ShintaiDK]

Unless Intel pays for them they don't get anything.

AMD has around 4,400 patents of their own, If you bought AMD (and their IP) and wanted to make x86 chips then you would have to renegotiate an x86 license with Intel since that is not transferable, other then that you would be free to use any of AMD's IP to make any other kind of chips.

The crosslicensing agreement states that if AMD gets bought, Intel gets all IPs covered by the agreement.

 

[mrmt]

Unless Intel pays for them they don't get anything.

AMD has around 4,400 patents of their own, If you bought AMD (and their IP) and wanted to make x86 chips then you would have to renegotiate an x86 license with Intel since that is not transferable, other then that you would be free to use any of AMD's IP to make any other kind of chips.

http://corporate.findlaw.com/contra...agreement-advanced-micro-devices-inc-and.html

(a) A party may terminate the other party's rights and licenses
hereunder upon notice if the other party hereto commits a
material breach of this Agreement and does not correct such
breach within sixty (60) days after receiving written notice
complaining thereof. In the event of such termination, the
rights and licenses granted to the defaulting party shall
terminate, but the rights and licenses granted to the party
not in default shall survive such termination of this
Agreement subject to its continued compliance with the terms
and conditions of this Agreement.

(b) A party hereto may terminate this Agreement upon sixty (60)
days written notice of termination to the other party given at
any time upon or after:

(1) the filing by the other party of a petition in
bankruptcy or insolvency;

(2) any adjudication that the other party is bankrupt or
insolvent;

(3) the filing by the other party of any petition or answer
seeking reorganization, readjustment or arrangement of
its business under any law relating to bankruptcy or
insolvency;

(4) the appointment of a receiver for all or substantially
all of the property of the other party;

(5) the making by the other party of any assignment for the
benefit of creditors;

(6) the institution of any proceedings for the liquidation
or winding up of the other party's business or for the
termination of its corporate charter;

(7) the other party undergoes a Change of Control. For
purposes of this Section 6.2(b)(7), "Change of Control"
shall mean a transaction or a series of related
transactions in which (i) one or more related parties
who did not previously own at least a fifty percent
(50%) interest in a party to this Agreement obtain at
least a fifty percent (50%) interest in such party, and,
in the reasonable business judgment of the other party
to this Agreement, such change in ownership will have a
material effect on the other party's business, or (ii) a
party acquires, by merger, acquisition of assets or
otherwise, all or any portion of another legal entity
such that either the assets or market value of such
party after the close of such transaction are greater
than one and one third (1 1/3) of the assets or market
value of such party prior to such transaction.

 

[Tsavo]

Solid short term strategies

ATI was a move in that direction, they just need to do something more with their $5B investment versus what they have done with it so far. (or spin it off and invest the proceeds into another technology direction that is more suited to AMD's management capabilities)

High resolution toilet paper?

 

[wlee15]

http://corporate.findlaw.com/contra...agreement-advanced-micro-devices-inc-and.html

See here.
http://forums.anandtech.com/showpost.php?p=34190903&postcount=60

On AMD adopting ARM I'm under the impression that this was something that SeaMicro was doing before it was acquired by AMD since that would allow them to integrate the SeaMicro ASIC with the CPU.

 

[Ajay]

Only thing AMD can do at this point to inject cash is to sell off the GPU division. I don't think they have anything left to sell that they can sell (they can't sell their x86 division).

If they get cheap though it might be interesting to see if someone attempts to take them private, like what happened with NXP and Freescale.

That could be a good idea, the only problem is negotiating the x86 license. Plus AMD would have to be priced about 1/2 of what it is now for, say, a private equity firm to buy them out. I wonder if investors behind ATIC are interested, just to help keep their GF fabs running.

 

[Ajay]

Nice find! Wow, Intel really protected it's @ss here. AMD is stupid, this is a freaking poison pill. They'd need a buyer willing to buy 49% of the company for some billions of dollars to get them back up and running again. Boy have they painted themselves into a corner!

http://corporate.findlaw.com/contra...agreement-advanced-micro-devices-inc-and.html

<snip>

(7) the other party undergoes a Change of Control. For
purposes of this Section 6.2(b)(7), "Change of Control"
shall mean a transaction or a series of related
transactions in which (i) one or more related parties
who did not previously own at least a fifty percent
(50%) interest in a party to this Agreement obtain at
least a fifty percent (50%) interest in such party, and,
in the reasonable business judgment of the other party
to this Agreement, such change in ownership will have a
material effect on the other party's business, or (ii) a
party acquires, by merger, acquisition of assets or
otherwise, all or any portion of another legal entity
such that either the assets or market value of such
party after the close of such transaction are greater
than one and one third (1 1/3) of the assets or market
value of such party prior to such transaction.

OH! Signed by Hector Ruiz!!! So he put another nail in AMD's coffin just to get some fast cash and be able to sell it's fabs. Wow!

 

[wlee15]

Nice find! Wow, Intel really protected it's @ss here. AMD is stupid, this is a freaking poison pill. They'd need a buyer willing to buy 49% of the company for some billions of dollars to get them back up and running again. Boy have they painted themselves into a corner!



OH! Signed by Hector Ruiz!!! So he put another nail in AMD's coffin just to get some fast cash and be able to sell it's fabs. Wow!
value of such party prior to such transaction.

Termination; Effects of Termination.

(a) Termination by Notice for Breach. Subject to the terms of, and as further set forth in, Sections 5.2(d) and 5.2(e), and upon written notice to the other Party (as used in this Section 5.2(a), the “Terminated Party”), a Party may terminate this Agreement as a whole, or the rights and licenses of the Terminated Party and all of its Subsidiaries under this Agreement, or the rights and licenses of any materially breaching Subsidiary of the Terminating Party, in the event the Terminating Party or any of its Subsidiaries commits a material breach of this Agreement and does not correct such material breach within sixty (60) days after such Terminating Party’s receipt of written notice complaining thereof.

(b) Termination in Bankruptcy. Subject to the terms of, and as further set forth in, Sections 5.2(d) and 5.2(e), and upon written notice to the other Party (as used in this Section 5.2(b), the “Terminated Party”), a Party may terminate this Agreement as a whole, or the rights and licenses of the Terminated Party and all of its Subsidiaries under this Agreement, or the rights and licenses of any Subsidiary of the Terminated Party, if (i) any Bankruptcy Event occurs with respect to such Terminated Party or with respect to any such Subsidiaries, and (ii) following such Bankruptcy Event, such Terminated Party or any of its Subsidiaries takes any Prohibited Action.
Subject to the provisions of Section 5.2(e)(ii) of this Agreement, the Parties and their respective Subsidiaries acknowledge and agree that, as further described in Section 7.2(b), this Agreement is personal to the Parties and their respective Subsidiaries; that U.S. patent law and other applicable non-bankruptcy law excuses a Party, without its consent, from accepting performance from or rendering performance to anyone other than the other Party and its Subsidiaries; and that this Agreement constitutes an executory contract of the kind specified in Section 365(c)(1) of Title 11 of the United States Code (the “Bankruptcy Code”). The Parties and their respective Subsidiaries further acknowledge and agree that Section 365(e)(1) of the Bankruptcy Code does not prevent termination of rights and licenses as set forth in this Section 5.2(b), and that Section 365(e)(2) of the Bankruptcy Code permits such termination, in each instance on the terms and subject to the conditions of this Section 5.2(b). Each of the Parties and its Subsidiaries hereby waives the protections of the “automatic stay” contained in Section 362 of the Bankruptcy Code to the extent required to permit each other Party to exercise its rights of termination under this Section 5.2(b).

(c) Termination Upon Change of Control. Subject to the terms of, and as further set forth in, Sections 5.2(d) and 5.2(e), this Agreement shall automatically terminate as a whole upon the consummation of a Change of Control of either Party.

Source: 2009 Intel-AMD Cross License Agreement
http://www.sec.gov/Archives/edgar/data/2488/000119312509236705/dex102.htm

Also do note that the 2001 agreement would have expired in 2011 anyway.