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AMD to take material goodwill charge on ATI deal

13 декабря 2007

AMD said on Wednesday it plans to take a material write-down of the value of its 2006 acquisition of ATI Technologies, a pricey bet the company made to compete better in the market for graphics semiconductors.

AMD, which has struggled in the last two years with market share losses and delays of its Barcelona server chip, holds its analyst meeting in New York on Thursday. It has reported four straight quarters of losses amid renewed competition from its far larger rival Intel Corp.
 AMD to take material goodwill charge on ATI deal

Sunnyvale, California-based AMD last month announced a new line of graphics chips to be used in personal computers that have as many as four accelerator cards.

The company said in a regulatory filing that the goodwill impairment charge would be material, but it could not estimate the amount. It said it would make a further filing once it determined the amount of the charge.

AMD, the world's No. 2 supplier of computer processors, completed its $5.6 billion purchase of Canadian graphics chipmaker ATI Technologies in October 2006.

Two months ago, AMD reported a quarterly loss of $396 million, including charges of $120 million related to the ATI acquisition.

Analysts have said that the ATI acquisition would drag on AMD in the short-term, but if the company executed well on integrating the purchase, it would likely be beneficial over the longer term.

AMD last month launched a new graphics chip called FireStream that is modified to crunch vast amounts of data, with potential customers in the financial, engineering and scientific industries.

FireStream is AMD's answer to a similar initiative from rival Nvidia Corp this year to find broader markets for increasingly powerful graphics chips.

FireStream is also a stepping stone for AMD to a major company product called Fusion that aims to combine a graphics chip on the same piece of silicon as a central processor by early 2009, a development that could lead to better performing notebook personal computers.

Shares of AMD fell 2 percent, or 18 cents, to $8.89 and shares of Intel rose 1.2 percent, or 32 cents, to $27.25. Shares of AMD trade at about 0.7 times its 2008 forecasted revenue, according to Reuters Estimates, while those of Intel trade at 3.9 times forecasted 2008 revenue.

Источник: Reuters

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