Rumours of weakness will not shake AMD's strong PR position

Jun 22, 2015 06:46 GMT  ·  By

Over the weekend rumors that AMD will be breaking its CPU department from its GPU manufacturing entity went rampant across the internet, prompting journalists to investigate if it's true.

The news, launched by Reuters at the start of the weekend, declared that after Lisa Su took over the position of CEO of AMD, she made plans for the company to “separate AMD's graphics and licensing business from its server business” to increase their business potential.

However, the guys at ExtremeTech, contacted AMD spokesperson Sarah Youngbauer to confirm the Reuters rumor. In return, the answer was a clear no, saying “While we normally would not comment on such a matter, we can confirm that we have no such project in the works at this time. We remain committed to the long-term strategy we laid out for the company in May at our Financial Analyst Day.”

The answer, however, is not surprising, AMD stands now on a strong PR position, freshly launching its Radeon 300 series together with its new Fury graphics card line, and it's unlikely they'll betray a weak financial status by confirming such rumors.

A bold solitary position against two giants

AMD plays a very risky game, taking on singlehandedly two tech giants like Intel and Nvidia, pushing the industry forward by offering accessibility on high-end products with lower prices than the competition. However, its operating margins on PCs and low-end GPUs are still stagnating offering mid-single digit % growth with only the higher-end graphics bringing solid revenues to the company. Together with that, another source of major income is, of course, the console market that consists exclusively of AMD products together with APUs and Bonaire GPUs for, Xbox One, and Pitcairn for PS4

Another issue is, of course the x86 license that AMD has for its CPUs that represents the armistice line between it and Intel. A breakup will leave the newly minted company to fend for itself with half the funds it now enjoys being part of AMD, and with no access to x64 CPU technology commonly found in servers across the world.

But all in all, the PR image now painstakingly won at E3 must endure, and no immediate financial problem will shake the decision to stay together for the near future as increased revenues will come in droves this summer-autumn financial quarter.