AMD Denies It Is Splitting Up

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Spinning off part of chip business could help it take on rivals such as Intel, but AMD says no plans at the moment.

Chipmaker AMD, which supplies hardware for many leading PC and device manufacturers across the world, has denied reports it is considering splitting itself up in order to revive its fortunes.

Sources within the company allegedly told Reuters that the business could be divided into two, or that certain parts could be spun off.

Spin-off?

35 amd cpusIt is thought any deliberations are preliminary and no decision has been made, but the company has reportedly asked a consulting firm to help it review its options and draw up scenarios on how a break-up or spin-off would work.

One primary option apparently under consideration is to separate the company’s graphics and licensing business from AMD’s x86 server business, which sells processors that power data centres.

However, AMD has poured cold water on the speculation.

“While we normally would not comment on such a matter, we can share that we have no such project in the works at this time,” a company spokesperson told TechWeekEurope, adding that AMD remains committed to the long-term strategy it laid out for the company at its Financial Analyst Day in May.

The rumours follow disappointing recent results, which showed revenues were down 17 percent on the previous quarter. The company also suffered an operating loss of $137 million (£90m) and net loss of $180 million (£120m), with its computing and graphics segment revenue decreasing 20 percent sequentially and 38 percent from Q1 2014.

The company blamed a ‘challenging PC environment’ for the slump in fortunes, a statement that has also been echoed by its rivals. For example, Intel attributed flat year-on-year revenues on an “uninterested” PC market earlier this year.

These struggles had led to speculation that AMD could be ripe for acquisition, with reports back in March suggesting Samsung could be one interested party, as it looked to strengthen its chipmaking business.

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