Published in News

What is in the future for AMD?

by on12 February 2015 4739 times

When I first started truly reporting on the tech world there were two power houses making CPUs. You had AMD on one side and Intel on the other. There were a few other companies that were making x86 compatibles, but no one was close to putting out processors in the numbers that AMD and Intel were. Intel was the king with a massive chunk of the market share. After a few deals with DEC and Samsung AMD came up with a CPU and chipset that changed the mind of many enthusiast and started the era of real performance competition between the two.

After a few changes in the way AMD ran their business (I will not bore you with the details again) AMD found themselves trailing behind Intel again and will massive losses to their name. They made some more changes to their organization which helped them change the way things looked financially, but were never really able to get back into the race. Instead they made a focus change to mobile and began ignoring the desktop CPU market pushing them further and further from real profitability.

Now AMD is in a very bad way and none of the clever tactics they have tired are helping. The company is hemorrhaging money and talent in a way that is just plain bad. This has made many feel that AMD is ripe for a buyout. The problem is that anyone buying AMD is going to inherit a ton of issues. This makes the chance of a purchase less than likely (although it is still possible). There could be a big company that decides that they want to invest in AMD for a certain ownership percentage and there have been a few companies (and one government) that have expressed interest in this, but even that is a big risk with the way thing are.

One option that we have heard recently would be for someone to buy AMD and then sell off the less profitable areas to someone that really wants them. This is similar to what Google did with Motorola. Google really only wanted the core patents that related to mobile devices, they did not need or want the handset manufacturing assets so they sold them to Lenovo. We might see the same thing happen with AMD.

Right now the right buyer could walk out with the core components of a GPU and HP server (Sea Micro) business. With the way GPUs are entering the HP market anyway this is a solid core to build from. They could hold onto some of the x86 patents as a security blanket and then license them and the CPU design assets to someone that really wants them (maybe nVidia) this way they can turn a profit on the acquisition of AMD and build on that business. This is likely to be the way things go with all of the parties involved pre arranging who gets what before the money is on the table. It means that in the next couple of years we could see the AMD brand go away (which would be sad).

Then again the writing was on the wall the day that AMD bought ATi instead of simply buying a portion of them with access to patents and technologies…

What do you think?

Last modified on 12 February 2015
Rate this item
(5 votes)

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.