Could AMD Go Bankrupt?

And if they do, who will take their place?

  AMD's Quad FX Platform

Since Intel Core microarchitecture, AMD has had some pretty rough weather, but it seems they might be a species on the brink of extinction, at least that's what the numbers tell us. From the reported revenues for the first quarter of 2007, AMD made a cool $1.233 billion, even more than the expected $1.225 billion they believed. Nevertheless, it still wasn't enough to stop them from losing $833 million in this quarter, according to Chris Caso, a financial analyst.

AMD has never been this low on cash before, no matter what Intel did or didn't do, and several questions have come up in the people's minds. One of which, and probably the most important one, is this: if AMD doesn't get back on its feet, will they sell the company, or at least a part of it, to the highest bidder? The answer is, probably. What they are currently experiencing is what they themselves have called "a perfect storm", and riding it out is what they are trying to do. But let's get serious, if their intention was to have any type of link with the movie with the same name, remember that those were computer generated effects, this is the real deal, and surviving in such an ordeal, will take a little bit more than some wishful thinking.

That is Hector Ruiz, the CEO of AMD, plans on assembling a "special task force" which will have decisional rights, a crisis cell, if you will. They will help the company "sail through the storm", and whatever they decide, goes; that includes personnel cuts, fabs being shut down, if necessary. Some things, though, cannot be undone, such as the Fab 30 in Dresden, Germany, which is already under construction. And AMD is in a more docile position, their previous strategies have been successful, but now, they have to put that aside, and experience new alternatives.

One of these is to sell some of the company's stock auctions, an action which Hector Ruiz has stated that "We have absolutely no prejudice or bias towards the sorts of capital, so long as it makes sense for us". Alongside a move such as this, AMD could also make a truce with Intel over some IP patents that AMD holds and Intel doesn't. But no matter what choice they make, one thing is certain, they want to survive as a company, even if that means making sacrifices. This plan they are making, sounds good enough to help them get past these hard times, but it also means something else, that they are not confident in they future products, and that they don't rely 100% on the revenue that is to come from them.


By    23 Apr 2007, 13:05 GMT