/// Who Would Buy AMD? A Tough Question With No Easy Answers.

October 13, 2012  |  Uncategorized


With the chipmaker Advanced Micro Devices once again on the ropes and about to make some significant cuts to its personnel, and with chatter about a major restructuring in the works, the rumor mills will inevitably turn once again to the speculation about who, if anyone, might interested in buying it. It wouldn’t be the first time that AMD will have been the subject of “ takeover chatter ,” so let’s inoculate ourselves against putting much faith in the speculation by taking a look at the possibilities. The one name that has come up repeatedly is Qualcomm, though others are certainly mentioned from time to time, including PC maker Dell. But for the sake of keeping things simple, let’s stick with Qualcomm. Known primarily as the supplier of chips for wireless phones, it has in recent years expanded significantly into supplying ARM-based processors for notebook PCs running Windows RT. Dell and Samsung are said to be customers of Qualcomm’s line of chips.

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Who Would Buy AMD? A Tough Question With No Easy Answers.

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/// Who Would Buy AMD? A Tough Question With No Easy Answers.

October 13, 2012  |  Uncategorized


With the chipmaker Advanced Micro Devices once again on the ropes and about to make some significant cuts to its personnel, and with chatter about a major restructuring in the works, the rumor mills will inevitably turn once again to the speculation about who, if anyone, might interested in buying it. It wouldn’t be the first time that AMD will have been the subject of “ takeover chatter ,” so let’s inoculate ourselves against putting much faith in the speculation by taking a look at the possibilities. The one name that has come up repeatedly is Qualcomm, though others are certainly mentioned from time to time, including PC maker Dell. But for the sake of keeping things simple, let’s stick with Qualcomm. Known primarily as the supplier of chips for wireless phones, it has in recent years expanded significantly into supplying ARM-based processors for notebook PCs running Windows RT. Dell and Samsung are said to be customers of Qualcomm’s line of chips. Qualcomm is said to covet the server market, where, not so long ago — well, about five years ago, anyway — AMD’s Opteron chips were competitive enough to cause significant headaches for the market’s perennial dominating force, Intel. AMD knows the server business well enough, the argument goes, that its expertise could be turned toward helping Qualcomm bring an ARM-based alternative to the server market. AMD also has strong ties with chip foundries upon which Qualcomm and numerous other so-called “fabless” chip companies rely to build its chips. AMD has historical ties with the world’s second largest foundry, GlobalFoundries. That company is essentially the former manufacturing arm of AMD, spun out in a complicated transaction that included investments from the sovereign wealth funds of the Arab state of Abu Dhabi in 2009. On top of that, AMD also owns a portion of the leading-edge 28-nanometer manufacturing capacity of the world’s largest chip foundry company, Taiwan Semiconductor Manufacturing Corp, a.k.a.

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Who Would Buy AMD? A Tough Question With No Easy Answers.

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/// Who Would Buy AMD? A Tough Question With No Easy Answers.

October 13, 2012  |  Uncategorized


With the chipmaker Advanced Micro Devices once again on the ropes and about to make some significant cuts to its personnel, and with chatter about a major restructuring in the works, the rumor mills will inevitably turn once again to the speculation about who, if anyone, might interested in buying it. It wouldn’t be the first time that AMD will have been the subject of “ takeover chatter ,” so let’s inoculate ourselves against putting much faith in the speculation by taking a look at the possibilities. The one name that has come up repeatedly is Qualcomm, though others are certainly mentioned from time to time, including PC maker Dell. But for the sake of keeping things simple, let’s stick with Qualcomm. Known primarily as the supplier of chips for wireless phones, it has in recent years expanded significantly into supplying ARM-based processors for notebook PCs running Windows RT. Dell and Samsung are said to be customers of Qualcomm’s line of chips. Qualcomm is said to covet the server market, where, not so long ago — well, about five years ago, anyway — AMD’s Opteron chips were competitive enough to cause significant headaches for the market’s perennial dominating force, Intel. AMD knows the server business well enough, the argument goes, that its expertise could be turned toward helping Qualcomm bring an ARM-based alternative to the server market. AMD also has strong ties with chip foundries upon which Qualcomm and numerous other so-called “fabless” chip companies rely to build its chips. AMD has historical ties with the world’s second largest foundry, GlobalFoundries. That company is essentially the former manufacturing arm of AMD, spun out in a complicated transaction that included investments from the sovereign wealth funds of the Arab state of Abu Dhabi in 2009. On top of that, AMD also owns a portion of the leading-edge 28-nanometer manufacturing capacity of the world’s largest chip foundry company, Taiwan Semiconductor Manufacturing Corp, a.k.a. TSMC. Qualcomm, the thinking goes, can’t help but be tempted, for the manufacturing relationships alone. And with AMD shares trading within 92 cents of its most recent historic low, its market capitalization has dropped to below $2 billion. Even after assigning a gentleman’s premium of 50 percent, which it wouldn’t necessarily command, AMD could, given its valuation of $1.94 billion as of Friday, be taken out for less than $3 billion. That’s cash that Qualcomm certainly has: As of June, its balance sheet showed combined cash and short-term investments of $13.4 billion, so on paper there’s no financial reason that prevents such a deal from getting done

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