Private equity to buy 20 per cent of AMD

[mrmt]

No point in selling the GPU division for that little money. Maybe Intel can get a licensing deal at that level though, with either AMD or nVidia. AMD will need their GPU division for their next gen Zen based APUs and consoles, unless they get some serious money for it.

Intel would need some 3-4 years to integrate AMD IP on whatever chips they are developing on their pipeline. Given the improvement rates of Intel IGPUs, I don't think there will be much advantage for AMD, if any advantage at all, in terms of iGPU performance at the end of this time frame.

I also think you are overestimating what AMD is calling little money today. With the company bragging about deals that should make some 50-100 million in operating profits per year, 1 billion of cold, hard cash is a lot of money.

 

[boozzer]

I am so sick of the "AMD is already dead, why are they even trying" hateful thinking, but that doesn't slow any of the usual trolls down.

this is so good :biggrin:

 

[Ajay]

Why wouldn't AMD just wind down its CPU business and go all-in on the GPU biz organically, then?

Historical precedent and corporate attachment. AMD is and has always viewed themselves as a CPU company first. I think that is part of the reason the AMD GPU biz is faltering - it likely had a lower priority than Zen when it came to capturing development dollars.

 

[jpiniero]

We have to see the spinoff first, tho after the management changes it raised the probability significantly.

But its not going to be 5B$. More like 500M-1B$ depending on cash/debt.

It'd be more like $300M given the current market cap. If they could get their hands on the graphics business for that, SL could make it work.

 

[Phynaz]

Puts them in slightly secondary position but effectively muzzles them. Here's why.

The BoD is probably at semi panic stage now, worrying about their reputation. They probably don't care about anything else.

The company needs money (which Mubadala has) but it also needs to be turned around (which Mubadala is clueless). Whereas private equity does both - that's what they do.

Obviously the target is spinning off ATI (which I said should happen 4 years ago) the Radeon reorg could not be more clear on this. Which makes perfect sense - at some point that spin off will have a market cap of $5B+.

You can bet the investors are negotiating hard, which in the end the BoD will give them almost whatever they want (though the spin will be congratulating the BoD on a great deal).

A lot of winners from this esp. GPU employees. The big loser will be Nvidia. x86 will probably see some major cuts as well.

You seem to have forgotten that AMD wrote off $4.25B of the ATI purchase. That's how much they overpaid, ATI was never worth that much, and certainly will not be worth that much in a declining graphics market.

 

[Arachnotronic]

Historical precedent and corporate attachment. AMD is and has always viewed themselves as a CPU company first. I think that is part of the reason the AMD GPU biz is faltering - it likely had a lower priority than Zen when it came to capturing development dollars.

No doubt about it, IMHO. The TAM for high perf CPUs is larger, but the competition is fiercer.

 

[mrmt]

Very true. MRMT had said b/4 that the GPU division was the only part of AMD worth saving. If this rumor is true, I wonder if Silver Lake is buying out the GPU division. Gives SL something to work with where they think they can add value (operational efficiency & execution) and it give AMD money to stay in the CPU business. Just a thought, IMHO.

If adequately funded the ATi business can make a come back after 4 years (the typical development cycle of a new pipeline). They surely have the IP, once rid of the incompetent AMD management this company can blossom, if only Nvidia is a much lighter competitor than Intel and the other ARM IHVs.

Why wouldn't AMD just wind down its CPU business and go all-in on the GPU biz organically, then?

I don't think the current BoD would be bold enough to admit they wrecked AMD CPU business for good and would then try to build a GPU-only business to take on Nvidia, plus I don't think they have the balance sheet for that today. They had circa 2012, today, not anymore.

 

[frozentundra123456]

He was using that as an example to demonstrate a point - that this "news" may indeed be a good thing for AMD. The question here is - why are you so 'sick' of seeing people hope that AMD turns around, and becomes a more competitive force in the CPU/GPU realm?

I think the new processor from Apple is a bit of a wake up call to Intel - per other threads in this sub-forum. I'd love to see the way in which technology could advance if somehow AMD, Apple and Intel had to compete with one another. I don't see why such a desire on my part should make anyone sick over it.

You are putting words in my mouth that I never said. It is fine for people to hope AMD turns around. But trying to compare them to apple is absurd. Apple is pretty much a once in a lifetime occurrence, while AMD just continues to slip into irrelevancy. It is like someone that continually mismanages their money thinking they are going to win the lottery to solve their problems. In fact the odds of winning the lottery and AMD becoming another apple are probably about the same.

 

[Phynaz]

Why wouldn't AMD just wind down its CPU business and go all-in on the GPU biz organically, then?

Going all in into a shrinking market isn't going to be a successful business model.

 

[Arachnotronic]

Going all in into a shrinking market isn't going to be a successful business model.

If that is how they view it, then they should wind it down, save the money, and go all-in on something that's growing and that they have a reasonable chance of being successful at.

 

[mrmt]

If that is how they view it, then they should wind it down, save the money, and go all-in on something that's growing and that they have a reasonable chance of being successful at.

That if they were serious about protecting shareholder value. I don't think they are, in fact, I don't think they are a serious management team at all.

 

[erunion]

AMD lost over $300 million in first half of 2015. How much more will they burn before q42016? Another $600 million?

I dont see how Zen can recoup those losses.

 

[frozentundra123456]

If that is how they view it, then they should wind it down, save the money, and go all-in on something that's growing and that they have a reasonable chance of being successful at.

But what? Really, there arent even that many growing markets left. PCs and dgpus are a declining market, tablets I think also have peaked, and even smartphones are going to be a saturated market eventually, especially if the carriers quit subsidizing their cost and hiding it into the monthly service fees. All they really have is consoles, and I think there is a distinct chance those will go ARM for the next generation.

Actually, I know it is not the conventional viewpoint, but I think if AMD has a chance to turn itself around, it will be the cpu side, not dgpus. nVidia is just too strong and has too much brand loyalty. If Zen is decent, I do see AMD having a chance to gain back a modest share of the server market and some niche segments in the consumer lineup, mainly because intel stubbornly refuses to give a mainstream platform with more cores.

 

[dark zero]

AMD lost over $300 million in first half of 2015. How much more will they burn before q42016? Another $600 million?

I dont see how Zen can recoup those losses.

AMD is alreay dead... even on GPU, they aren't worthy anymore...

Sorry if that is blunt, but I see the GPU division become a brutal dissaster after the massive flops called Fury.

Next year, nVIDIA will assasinate AMD with Pascal and that's we will know about AMD after that.

 

[ShintaiDK]

Going all in into a shrinking market isn't going to be a successful business model.

That is why they would need to change their model to licensing designs out for SoC usage.

Selling discrete GPUs is a death sentence.