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AMD rebuffs planned breakup

Posted: 24 Jun 2015 ?? ?Print Version ?Bookmark and Share

Keywords:AMD? microprocessor? PC? server? Nvidia?

The Reuters news service has reported that Advanced Micro Devices Inc. (AMD) was at the initial stage of reviewing whether to split up the company. The report, which cited unnamed sources, said AMD had engaged a consulting firm to help it review such options. AMD instantly responded by denying the said claim.

Sarah Youngbauer, a spokesperson for AMD, said the company has not hired an outside agency to explore a split up or spin off, contrary to an earlier report.

"We remain committed to the long-term strategy we laid out for the company in May at our Financial Analyst Day, which encompasses all parts of the business," Youngbauer said.

Lisa Su

AMD has struggled in recent years. The company remains the second leading supplier of microprocessors for PCs and servers but trails rival Intel by a wide margin. The company is also a leading supplier of graphics processors, holding 13 per cent of the market, trailing Intel (72 per cent) and Nvidia (15 per cent), according to Jon Peddie Research.

Will Strass, president and principal analyst at Forward Concepts, said he did not have specific knowledge of AMD's plans, but suggested that the company needs to explore new avenues.

"Essentially, they need to do what works," Strauss said. "Because what they have been doing is not working."

According to the Reuters report, one of the options on the table for AMD is to split the company's graphics and licensing businesses up from the microprocessor business. AMD's history in the microprocessor business dates back to the late 1970s, but the company entered the graphics chip business through the acquisition of ATI Technologies in 2006.

A move by AMD to split or reshape the company would be the most dramatic manoeuvre yet by AMD, which has for years been trying to boost its sagging fortunes. AMD reported in April that its Q1 sales slipped to $1.03 billion, a decline of 17 per cent compared to the previous quarter and 26 per cent compared to 1Q14.

AMD's $5.89 billion in semiconductor revenue placed the company 16th in the world in chip sales last year, according to IHS Technology. As recently as 2009, AMD ranked eighth in the world in chip sales.

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