Buyout chatter sends AMD shares shooting up

Could AMD be on the verge of getting bought out? There’s no evidence to suggest that just yet, but according to MarketWatch, that didn’t stop rumors about a possible acquisition from boosting AMD’s share price yesterday. The chipmaker’s shares reportedly rose in value by 8%, landing at $4.34.

MarketWatch doesn’t get into much detail about the rumors. It only quotes Evercore Partners analyst Patrick Wang, who says Qualcomm and Samsung were both cited as candidates for a potential bid on AMD. However, Wang doesn’t believe the speculation holds much water. "I think it’s unlikely they get a take-out offer," he says.

Speculation is in the air, nonetheless. Last week, Sylvie Barak over at EE Times wrote a story that listed potential candidates for an AMD takeover. She named Qualcomm as the most likely one, noting that the firm already acquired assets from AMD’s now-defunct handheld business a few years ago. Acquiring AMD, she added, would give Qualcomm "increased leverage with manufacturing partners like TSMC and Globalfoundries."

As for Samsung, Barak commented that the Korean mega-conglomerate could use AMD’s patents in its war with Apple. Samsung already designs its own ARM-based SoCs, has already hired some former AMD talent, and could likely afford the purchase price without much trouble.

It’s too early to know for sure, but I don’t think it would come as a huge surprise if a takeover was indeed in the cards. The chipmaker has had trouble turning a profit in recent years, posting sizeable losses as late as the first quarter of this year. Earlier this week, AMD announced that it was borrowing $300 million for "general corporate purposes and working capital." Some of the money, AMD said, would be used to repay existing debt and to make payments to GlobalFoundries.

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    • internetsandman
    • 7 years ago

    I’m not too savvy with corporate economics and whatnot, would a buyout mean the end of AMD’s CPU competition with Intel? Would their staff and IP be directed towards other purposes and goals? Or would it instead give a much needed boost to their R&D department, both from a personnel and financial standpoint, hopefully providing a revolution that gives Intel a serious amount of competition?

    • AMDisDEC
    • 7 years ago

    LOL, analysts!
    Neither one of those speculated “candidates” are interested in purchasing AMD. As usual, Wall street tech analysts don’t know their behinds from holes in the ground.
    Samsung had the opportunity to purchase AMD 15 years back when they let API’s Lightning Transport (HyperTransport) go to AMD.
    Qualcomm isn’t interested because they are aware if they purchased AMD they would have to let all those incompetent AMD upper management hanger-ons and leaches go and completely restaff. They realize that AMD is a financial sink-hole with no justification for acquisition.

    AMD will have to wait until ARM is better financed, and perhaps we will see AMD go British. These two companies need each other and they also complement each other well since, ARM has no chance against Intel in the server space and AMD has no chance against anyone in the embedded space.

      • trackerben
      • 7 years ago

      The companies who could most use the IP and talent of AMD as a hedge against Intel and as a shorter path to licensing are the Taiwanese and S Korean manufacturers and their mainland partners. But these are precisely the “friendlies” who won’t be allowed by the US Government and industry minders to gain conrol of tech leaders like AMD, and they know it. That leaves British and Israeli computing firms for a likely sale or joint venture. Or if they still have relevant designs to offer, they could go to ARM founder Apple and get groomed and redirected for bigger things..

    • HisDivineOrder
    • 7 years ago

    They should cooperate to buy out AMD. Shut down the CPU business except for a shell that they sell to nVidia to allow them to have a x86 license. Then sell the GPU business to Intel to help them engineer a real GPU that doesn’t suck. Get Intel and nVidia to agree to a license to use the patents exclusively for Android defense to beat the living crap out of Apple.

    Fire the AMD CEO and his whole stupid board. Shut down the fab’s being wasted making anything even remotely Bulldozer, including Trinity and anything Piledriver. Firesale those 7xxx GPU’s.

    Rejoice. Never again will gamers have to suffer crappy AMD drivers.

    Haha, j/k. That’d suck. I mean, what would Intel and nVidia charge then? $1k for a CPU, $2k for a 660 vanilla? Damn, I wish AMD would actually, y’know, compete again. Instead of this Pepsi and Coca-Cola living in balance, barely competing business they’re doing right now.

      • deinabog
      • 7 years ago

      This could happen. I’ve always thought that if AMD did put itself up for sale Intel would grab the GPU division while Nvidia grabbed the CPU and chipset unit. The x86 license would be transferred to Nvidia and both they and Intel would compete with 3C solutions (CPU, chipset, and GPU).

      I guess we’ll have to wait and see what happens.

    • flip-mode
    • 7 years ago

    < Obligatory enthusiast “expert analysis”. >

    < Obligatory negative AMD comment that probably has a fair amount of truth to it.>

    • LastQuestion
    • 7 years ago

    Oh, Advanced Micro Devices, How I wish to Love thee, but thou products, art full of Fail

      • NeelyCam
      • 7 years ago

      Try that at Semiaccurate and you’ll get banned

    • trackerben
    • 7 years ago

    Would a foreign company be allowed to acquire AMD, particularly a corrupt entity like Samsung? AMD has contracts with supercomputing projects, and those technologies are still treated like munitions whose exports are subject to controls. US companies like Qualcomm are more likely prospects. Even Intel has a better chance of being approved.

      • BobbinThreadbare
      • 7 years ago

      The US military buys weapons from plenty of other countries.

        • trackerben
        • 7 years ago

        Yes, and?

        • moose17145
        • 7 years ago

        So? Guns and bullets are in a totally different and entirely less lethal category…

      • blastdoor
      • 7 years ago

      good question, I don’t know. I suppose the fact that South Korea is an “ally” probably helps, though.

        • trackerben
        • 7 years ago

        S Korea is a major ally, but then so are Japan and Germany, and much controlled tech is denied these countries for historical reasons. NATO countries all have access to run-of-the-mill stuff, but of this group only firms from the G7 nations and Israel would have comparable techbases to leverage trade on. One would think that France, being a fellow UNSC nuclear member with a long shared history, would provide its companies an edge in access but they have been too quirky and independent to be really cozy with. In practice this means UK companies and universities (and to a much lesser extent Israeli ones) are the foreigners who get the most playtime with the deepest and darkest IP. Although even the British are denied certain strategic systems.

      • TurtlePerson2
      • 7 years ago

      The real problem is the export of the IP, which AMD has. High tech stuff is allowed to be exported, but the ways to make it are generally not allowed to be exported.

        • trackerben
        • 7 years ago

        One method is to hive off the critical assets and people before selling off the remainder to a foreign company

    • Scrotos
    • 7 years ago

    Apple’s gonna buy them to put the engineers on their in-house ARM team just like with Pwrficient then fold the rest of the company.

      • blastdoor
      • 7 years ago

      I think the price would have to fall well below $1 billion for Apple to do that.

      • jdaven
      • 7 years ago

      This is what I think. Let the x86 license expire (make Intel happy), use the rest of the CPU IP for the Ax teams and build cloud clusters with GPGPU tech.

      • sschaem
      • 7 years ago

      They can use AMD expertise to build their next gen iTV (iPlay, whatever) AMD is the absolute best company to design high end living entertainment systems.

      Apple could turn AMD into their Home entertainment/living experience division and leverage it all.
      (GPU and CPU)

      AMD is worth 3 billion on the open market, 3 billion for Apple is insignificant.
      Specially if they can grab a significant portion of the console market from the acquisition.
      100 million unit over the next 5 years would pay for AMD 10 time over, plus all the media consumption this would add to their itune/app store.

      Apple can recreate their smartphone revolution, but this time changing the face of ‘setop box’.
      (The current iTV is neat, but its no console killer)

      Apple got so much developers ready to pound any new device they release… People might be amazed at what developers will come up to run on their TV. (beside all the games)

    • Unknown-Error
    • 7 years ago

    I’ll ask again! [b<]Is the AMD x86 license transferable?[/b<] But, even if the license is not-transferable I think the buyer will still own some x86 patents (x86-64) and don't forget many other non-x86 patents especially graphics. The Cyrix license was transferable otherwise VIA would not be making any x86 chips.

      • sweatshopking
      • 7 years ago

      it wasn’t, but AMD and intel haven’t announced the status of the x86 license since the last round of meetings after the bad behavior. it’s possible it’s transferable now.

    • ronch
    • 7 years ago

    AMD in its current shape probably will find it very difficult to survive long term much further. Never mind Rory’s vague plans for the company. The thing is, they’ve escaped extinction so many times in the past that many people wonder just how they even manage to survive to this day. Quarter after quarter of loses dwarf the few quarters that they actually make anything. I won’t be surprised if they eventually wave the white flag for a takeover.

    The more pressing question in my mind is, if they get snapped up, what will happen to the x86 license? And even if it does get transfered, will the parent company actually be able to hold up against Intel if they so choose to continue x86? And if not, what happens to Intel? Then also, what happens to the graphics division, where the parent company will now have to compete against Nvidia else just throw away the opportunity?

    I don’t know, but it seems as though Hector and Dirk jettisoned bits and pieces of the company one at a time to drive the stock lower and lower, eventually opening up the topic of a takeover with the stock price selling for peanuts.

    • Silus
    • 7 years ago

    AMD is cheap and both these companies (especially Samsung) could easily buy it. But I doubt either of them are really that interested. Maybe buying part of the company, but definitely not all. The Oracle buyout from a year or so ago, made more sense, since Oracle could leverage their already large presence in servers with their AMD buyout. Both Qualcomm and Samsung are doing very well in their respective areas. Buying AMD wouldn’t really add much to the markets they delve into right now, except maybe in the long, long term…

    • blastdoor
    • 7 years ago

    To buy AMD, you have to be both rich and dumb.

    Samsung has the money. The question is are they dumb enough? They might be. Samsung is a big conglomerate based in a country with a lot of corruption, and big conglomerates have a history of doing dumb things, particularly when they are attached to corrupt governments.

      • bcronce
      • 7 years ago

      AMD does have the potential and decent talent, they just seem to have some system wide issue of dropping the ball.

      Their engineers and devels talk about all of this awesome stuff, then they ship something else. Did those ideas get ignored? Did they not pan out? What happened?

        • Silus
        • 7 years ago

        Yeah, it’s called “bad management”…For over 6 years now, that AMD has been run by very, very incompetent people!

          • ronch
          • 7 years ago

          Not just 6 years. AMD has been on a downward spiral ever since Jerry Sanders stepped down as CEO in 2002. The success of the K8 was set in stone long before Hector came in. Hector only executed against Jerry’s roadmap, which was Jerry’s dream to provide a 64-bit alternative when he saw a hole in Intel’s lineup. Hector was the guy on top when Barcelona got the green light, and obviously, Bulldozer as well. Hector didn’t care whether AMD burned to the ground as long as he got his golden parachute plus whatever else he pocketed.

          Dirk wasn’t much fun either. The rest is history.

          • blastdoor
          • 7 years ago

          Don’t underestimate the role of “undercapitalized” and “competing against a much bigger rival”

            • Silus
            • 7 years ago

            Undercapitalized due to their own mistakes. What placed them in the red for years was paying too much for ATI. AMD can only blame themselves for that.

            And fighting a much bigger rival wasn’t an issue in the past. In fact they even beat Intel with the Athlon 64s, when they focused solely on CPUs. Then they bought ATI and everything went downhill. I don’t think buying ATI was a total disaster, since it had some potential in the long term, but it was definitely a very bad deal that nearly destroyed AMD and that AMD should’ve avoided completely or at the very least thought about it a bit more than “We must buy ATI, whatever the cost”

        • blastdoor
        • 7 years ago

        I’m sure there’s lots of talent. Smart companies will just skim off the cream of the crop rather than buy the whole company.

      • Bensam123
      • 7 years ago

      I don’t think buying a company that makes microprocessors that are close to being on par with Intel as well as top of the line graphics qualifies as a ‘dumb’ buy. AMD still has a LOT of potential. I think people like you are ‘dumb’ for even suggesting AMD is nothing but a failure.

      The management is what needs to be changed and AMD is doing it at a steady pace, they just haven’t found a combination that works yet.

    • albundy
    • 7 years ago

    thats alot of people that could get canned if the takeover does initiate. i hear minimum wage jobs are on the rise though.

      • sweatshopking
      • 7 years ago

      thanks. now we’re going to have to hear all about how it’s all Obama’s fault…

        • BobbinThreadbare
        • 7 years ago

        He’s not even your president.

          • sweatshopking
          • 7 years ago

          i wasn’t referring to comments i’d be making.

            • BobbinThreadbare
            • 7 years ago

            I was thinking how often do people blame things on Obama in Canada?

            • sweatshopking
            • 7 years ago

            i was mostly talking about my boyfriend l33t-gamer.

            and go to alberta. they blame stuff on him too.

    • tbone8ty
    • 7 years ago

    Thats all fine and dandy but what about the big issue over x86 license?

    Could Qualcomm or Samsung get this license? I dunno about that… And would this cause alot of trouble for Intel?

    I think it’s safe to say we can chalk this up to rumor #234,567

      • LSDX
      • 7 years ago

      (even if I don’t think it will happen) Samsung could probably force/pay Intel into a new cross-licencing agreement.

        • Mourmain
        • 7 years ago

        Yeah, wouldn’t Intel be placed into a monopoly position if Samsung wasn’t allowed to take over the licence? Intel might not like the government attention from that.

          • worldbfree
          • 7 years ago

          Monopoly? I think you are all forgetting about VIA. I though x86 it self was open, just if you want to use stuff like mmx, that you needed the licenses.

        • NeelyCam
        • 7 years ago

        And that’s when the race begins again. Samsung has the money to battle Intel that AMD never had. Moreover, Samsung has a good fab process – something AMD lost because of monetary issues.

        I’ve said it before that Samsung is the only one that can compete with Intel – I was thinking mobile space, though. If they get an x86 license and all the AMD patents for high-performance chips, they could compete also in the high-end (workstations/servers)

          • sweatshopking
          • 7 years ago

          in 2025

      • dragosmp
      • 7 years ago

      Agreed; as long as the x86 license isn’t transferable AMD doesn’t have much to offer: no x86, no ARM (yet), no foundries. AMD may yet recover, but if must hold on the x86 license until they manage something better, maybe a Tegra-like SoC.
      And about the anti-monopoly argument to transfer the x86 license to (Samsung), I’m not so sure this is a valid argument any more with tenths of million ARM processors sold to consumers; x86 is dominant, but it doesn’t power 99% of computing devices any more.

      • blastdoor
      • 7 years ago

      who the heck even wants the darn thing?

      Competing with Intel in x86 is a guaranteed loser of a business plan for any company, not just AMD.

      The only value in AMD is IP that is valuable independent of x86 and of course employees.

        • cynan
        • 7 years ago

        Until Intel starts charging double for their processors when AMD folds.

        AMD or a replacement x86 competitor doesn’t have to beat Intel at the bleeding edge. They just need to provide competitively priced Intel alternatives that satiate the performance demands of 90%+ of the x86 CPU market. Sadly AMD used to be in this position not that many years ago (and yes, was even besting Intel around the onset of the x64 architecture), but obviously in recent years seems to be having almost nothing but problems.

        Just because AMD has been having difficulty competing with Intel over the past few years doesn’t mean that a company with more direction and focus and resources would have had the same difficulties. However, I admit that taking over AMD’s IP now would sure mean a lot of ground to cover carve out a comfortable niche as an Intel competitor.

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