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AMD Is Worth Today a Quarter of What It Paid for ATI

Low PC sales might or might not affect AMD's crisis

Jul 17, 2015 10:47 GMT  ·  By
Financially weak or not, AMD fights on
   Financially weak or not, AMD fights on

Back in 2006 AMD paid $5.60 billion to buy ATI, now AMD is worth only $1.53 billion.

Apparently, AMD claims that its current financial position is caused by the general hit the PC markets took these recent months as PC components have just hit a new low in shipments across the world. The AMD stock opened at a stock price of 1.87 down -0.09 or -4.59% at the time of writing this report, which sets the company's market capitalization at $1.53 billion (€1.40 billion).

This month AMD took a steep fall of -15.59%, seeing its market cap drop by a quarter. The Google Finance indicator shows a general downward trend since the end of 2014. Warning liquidations come from across the media with sales drop that have reached quarterly earns below $1billion (€919million), with annual sales growth for the five past years of 0.40%.

This new dire financial situation at AMD has prompted countless rumors of AMD splitting its CPU manufacturing department or even more radical ones, and not completely impossible, that Microsoft has plans to buy the company to increase its chip manufacturing facilities and to save costs for mobile processing units. Microsoft pays yearly over $1 billion (€919million) for Xbox One components coming from AMD so an effort to buy the Sunnyvale IT giant won't make Microsoft dig too deep in its pockets.

Despite difficulties, AMD projects a strong image

By comparison, Intel is now worth $140.8 billion (€ 130 billion) (92 times more), and NVIDIA $10.7 billion (€ 9.8billion) (7 times more). However, some companies like Intel and Microsoft are having solid growths, so AMD blaming the PC market for its financial position is not entirely founded.

With recent GPU launches like the Fury X and the Carrizo, AMD still projects a strong position of continuous development and competitiveness. However, coming late at the FinFET process technology R&D compared to Intel, GlobalFoundries and IBM shows an unpredictable financial position that may turn against the company on the long run.

We predict that while Intel launches its first 14nm process technology CPU, AMD will come with its own eight-core 14nm FinFET barely during next-year's summer, as the move from wafers to production levels FinFET takes months to achieve.