AMD writing down the ~$3.2 billion goodwill assumed in ATi purchase

[John Lewis]

Here is the text of the latest AMD 8-K filing with the SEC:-

"Item 2.06 Material Impairments

On December 6, 2007, Advanced Micro Devices, Inc. (theCompany)
concluded that the current carrying value of its goodwill which the
Company had recorded as a result of its October 2006 acquisition of
ATI Technologies Inc. was impaired. This conclusion was reached based
on the results of an updated long-term financial outlook for the
businesses of the former ATI Technologies Inc. as part of the
Company’s strategic planning cycle conducted annually during the
Company’s fourth quarter and based on the preliminary findings of the
Company’s annual goodwill impairment testing that commenced in the
beginning of October 2007.

The Company expects that the impairment charge will be material, but
the Company has determined that, as of the time of this filing, it is
unable in good faith to make a determination of an estimate of the
amount or range of amounts of the impairment charge. The Company will
file an amended report on Form 8-K/A under this Item 2.06 promptly and
in any event within 4 business days after it makes a determination of
such an estimate or range of estimates. "

==================================
Finally AMD has publicly admitted its blunder in offering too much for
ATi... The offer for ATi shares was 20% premium over market - a share
price of $20 for a stock that had been hovering in the doldrums
between $12 and $16 for the previous year. The real blunder was buying
them at all on several $biillion borrowed money. It has
catastrophically diverted AMDs attention from its core business. Core
2 had started shipping and garnering rave reviews a month before the
stockholder's meeting to finally ratify the purchase, so AMD could see
the lion's gaping mouth and had the opportunity to back out of the
deal. Seems as if Hector's ego got the better of common-sense.

AMD stock price has slumped to $8.64 this morning. AMD share price
at the time of the ATi acquisition was ~ $25.

Dave Orton must be giggling all the way to the bank.

2008 will be a very interesting make-or-break year for AMD.

John Lewis

 

[CoinSpin]

| Here is the text of the latest AMD 8-K filing with the SEC:-
|
| "Item 2.06 Material Impairments
|
| On December 6, 2007, Advanced Micro Devices, Inc. (theCompany)
| concluded that the current carrying value of its goodwill which the
| Company had recorded as a result of its October 2006 acquisition of
| ATI Technologies Inc. was impaired. This conclusion was reached based
| on the results of an updated long-term financial outlook for the
| businesses of the former ATI Technologies Inc. as part of the
| Company's strategic planning cycle conducted annually during the
| Company's fourth quarter and based on the preliminary findings of the
| Company's annual goodwill impairment testing that commenced in the
| beginning of October 2007.
|
| The Company expects that the impairment charge will be material, but
| the Company has determined that, as of the time of this filing, it is
| unable in good faith to make a determination of an estimate of the
| amount or range of amounts of the impairment charge. The Company will
| file an amended report on Form 8-K/A under this Item 2.06 promptly and
| in any event within 4 business days after it makes a determination of
| such an estimate or range of estimates. "
|
| ==================================
| Finally AMD has publicly admitted its blunder in offering too much for
| ATi... The offer for ATi shares was 20% premium over market - a share
| price of $20 for a stock that had been hovering in the doldrums
| between $12 and $16 for the previous year. The real blunder was buying
| them at all on several $biillion borrowed money. It has
| catastrophically diverted AMDs attention from its core business. Core
| 2 had started shipping and garnering rave reviews a month before the
| stockholder's meeting to finally ratify the purchase, so AMD could see
| the lion's gaping mouth and had the opportunity to back out of the
| deal. Seems as if Hector's ego got the better of common-sense.
|
| AMD stock price has slumped to $8.64 this morning. AMD share price
| at the time of the ATi acquisition was ~ $25.
|
| Dave Orton must be giggling all the way to the bank.
|
| 2008 will be a very interesting make-or-break year for AMD.
|

It was a calculated risk, which they are hoping to cash in on starting in
2008. Intel was beating them in the multi-core race - even if AMD's
approach was technically better, it's usually fist to market wins. So AMD
needed another avenue to pursue along with the CPU battle. If and when they
can get a fully integrated CPU/GPU system put together, they could quickly
come to dominate many of the mobile applications out there, which was one of
the less talked about but major reason for the acquisition in the first
place. Considering that the mobile market is one of the fastest growing
tech sectors, AMD basically put a whole bunch of eggs into one basket. If
they can come through with the CPU and GPU on one die combination, the
increased optimization and massive power savings would throw them into a
leading position in the mobile computing business...

As you said, 2008 will definitely be a nail-biter for many... I'm
personally hoping AMD pulls through, the competition keeps Intel on their
toes and off the "jack up prices just cause we can" parade.

CoinSpin

 

[rms]

As you said, 2008 will definitely be a nail-biter for many... I'm

personally hoping AMD pulls through, the competition keeps Intel on their
toes and off the "jack up prices just cause we can" parade.

There is no way in hell I'm buying Intel products next year (or this
year). I want AMD/ATI to succeed.

rms

 

[First of One]

Never let stupid business moves go unpunished.

 

[Tim O]

There is no way in hell I'm buying Intel products next year (or this
year). I want AMD/ATI to succeed.

rms

Competition is needed within the industry, and I also want to see them
succeed, but they have to stand on their own by building a competitive
product. I just bought a Pentium 6850 and Asus motherboard. It's the
first non-AMD CPU I've purchased since the advent of the first
Athlon's.

If they build the product they should be building, they won't need
charity purchases.

 

[Lou]

Competition is needed within the industry, and I also want
to see them
succeed, but they have to stand on their own by building a
competitive
product. I just bought a Pentium 6850 and Asus
motherboard. It's the
first non-AMD CPU I've purchased since the advent of the
first
Athlon's.

If they build the product they should be building, they
won't need
charity purchases.

I remember when (before Athlons) Intel was the standard CPU
and if you wanted to save some money you could buy the
cheaper (price and some thought quality) AMD CPU. I never
considered AMD as good as an Intel until the Athlon's came
out, then AMD seemed to have the upper hand on performance
and price. Maybe AMD will just have to be the cheaper CPU
for a while and hope that people will see them as the other
lower cost choice rather than useless and doomed.

 

[Xocyll]

I remember when (before Athlons) Intel was the standard CPU
and if you wanted to save some money you could buy the
cheaper (price and some thought quality) AMD CPU. I never
considered AMD as good as an Intel until the Athlon's came
out, then AMD seemed to have the upper hand on performance
and price.

Oh they were competitive long before that.
Dad had a Intel 386 DX 33, I had an AMD 386 DX 40, and mine was faster
(not the huge jumps that came later, but still faster.)

Move up to the pentium, and a friend of mine who was not terribly
computer literate bought (without asking for advice) a pentium 200,
while I bought an AMD K6-233. For $100 less I got a processor that beat
his in all tests (the extra 33MHz canceled out Intel's better floating
point performance.)

Xocyll

 

[Mr Rob]

Oh they were competitive long before that.
Dad had a Intel 386 DX 33, I had an AMD 386 DX 40, and mine was faster
(not the huge jumps that came later, but still faster.)

I'll never ever forget my first experience with an AMD processor. I
bought a system that had an AMD K5 100 CPU in it. It had a PR (Pentium
Rating) of 133 so it was technically one of the fastest chip on offer
at the time. It was an AST Advantage Home Multimedia machine. Very
well made and nice and smooth with Windows 95 on it.

I was really looking forward to playing MDK2 at last. Imagine my
horror when the game wouldn't install because it recognised my CPU as
486 DX- architecture. It wouldn't even install because it needed a
"Pentium Class CPU" to run on.

Back then I think it was the FPU benchmarks that caused non Intel 5x86
class chips to be recognised as 4x86. I had the same problem with a
Cyrix 120 MHZ CPU.

I never did play MDK2 even though I did buy a Pentium based machine a
few months later.

Move up to the pentium, and a friend of mine who was not terribly
computer literate bought (without asking for advice) a pentium 200,
while I bought an AMD K6-233. For $100 less I got a processor that beat
his in all tests (the extra 33MHz canceled out Intel's better floating
point performance.)

This is when AMD really started giving Intel a run for their money if
I remember correctly. I had great service out of 1GHZ Thunderbird and
then an Athlon 2100+. I've had several Athlons since then too. I've
still got 3 working PC's in the house based on those chips.

It's Intel for me at the moment though. They seem to offer the best
performance to cost ratio. I've had an ATi graphics card for the last
3 years but at the moment it looks like Nvidia is going to supply my
first ever DX-10 card.

I really hope that AMD's acquisition of ATi doesn't turn out for the
worse. We need them to keep the market place competitive. I don't have
any have any allegiance to any vendor, I just want whatever delivers
the best performance for the kind of money that I can afford. The idea
of a competitive market place seems to be completely lost on the
"fanboy" types that enjoy gloating when a rival vendor runs into
trouble.

 

[Andrew]

I'll never ever forget my first experience with an AMD processor.

Mine was going from a P166 to a K6-2 300 for something like half the
price of an Intel 300 and it completely rocked in Unreal. I don't
think I ever had any negative experiences with my AMD based systems.
Have defected back to Intel with the C2D's though!

 

[Xocyll]

Mr Rob <[email protected]> looked up from reading the
entrails of the porn spammer to utter "The Augury is good, the signs
say:

I'll never ever forget my first experience with an AMD processor. I
bought a system that had an AMD K5 100 CPU in it. It had a PR (Pentium
Rating) of 133 so it was technically one of the fastest chip on offer
at the time. It was an AST Advantage Home Multimedia machine. Very
well made and nice and smooth with Windows 95 on it.

Ahh yes, the famous "overdrive" chip, supposed to make a 486 system into
a pentium. I dodged that bullet thankfully.

I was really looking forward to playing MDK2 at last. Imagine my
horror when the game wouldn't install because it recognised my CPU as
486 DX- architecture. It wouldn't even install because it needed a
"Pentium Class CPU" to run on.

I thought MDK one wouldn't run except on a pentium?

Back then I think it was the FPU benchmarks that caused non Intel 5x86
class chips to be recognised as 4x86. I had the same problem with a
Cyrix 120 MHZ CPU.

I never did play MDK2 even though I did buy a Pentium based machine a
few months later.


This is when AMD really started giving Intel a run for their money if
I remember correctly. I had great service out of 1GHZ Thunderbird and
then an Athlon 2100+. I've had several Athlons since then too. I've
still got 3 working PC's in the house based on those chips.

Dittoish; k6 to a .7GHz Duron, then to a 1.4GHZ athlon, then up to an
athlon 64 2800, which is where I'm at now.

It's Intel for me at the moment though. They seem to offer the best
performance to cost ratio. I've had an ATi graphics card for the last
3 years but at the moment it looks like Nvidia is going to supply my
first ever DX-10 card.

Yeah all the benchmarking does seem to show Intel pretty solidly ahead
of AMD these days.

Some day soon I'll probably build another system, which is going to have
to be mostly new from the ground up since neither the ram nor the AGP
video will be usable in the new machine.

Then I'll have to find room for a 3rd machine on my desk.

I really hope that AMD's acquisition of ATi doesn't turn out for the
worse. We need them to keep the market place competitive. I don't have
any have any allegiance to any vendor, I just want whatever delivers
the best performance for the kind of money that I can afford. The idea
of a competitive market place seems to be completely lost on the
"fanboy" types that enjoy gloating when a rival vendor runs into
trouble.

Indeed, Intel's prices were pretty massive gouging until AMD got
competitive with them.
I don't fancy the price jump if Intel stays well ahead.

AMD's purchase of ATi is eerily familiar to 3DFX's purchase - I hope
they don't end up having the same fate.

Xocyll

 

[Mr Rob]

I thought MDK one wouldn't run except on a pentium?

You are indeed right. It was MDK and it needed a P90 minimum to run. I
never played it even though I still own the copy that I bought way
back when I learn that lesson the hard way.

It wasn't an overdrive chip though. It was a proper CPU in it's own
right. I do remember the Overdrive chips though and knew a few people
that bought them and regretted it.

I also remember lusting after a "blisteringly fast" P200 system and
not being able to afford it. I think my first Pentium beyond the
200mhz mark was a 233MHZ MMX system. That was actually rather good and
lasted me several years. I played POD on it until my eyes were red
raw.

The next major jump for me was a PII 400MHZ complete with a supposedly
breathtakingly fast 32MB RagePro AGP card complimented by 2 x Voodoo 2
cards utilising SLI.

I remember being all excited because one of the free games I got with
it was "G-Police" which was supposed to be a game optimised for AGP.
It also had "Incoming" which was heralded as being the same new
fangled thing. It was also the first PC that I owned that had a DVD
ROM drive with it.

Those were the days. Back then 400MHZ was way more power than anything
could utilise. For about a whole week anyway.

 

[CoinSpin]

<serious snippage>

|
| It's Intel for me at the moment though. They seem to offer the best
| performance to cost ratio. I've had an ATi graphics card for the last
| 3 years but at the moment it looks like Nvidia is going to supply my
| first ever DX-10 card.
|
| I really hope that AMD's acquisition of ATi doesn't turn out for the
| worse. We need them to keep the market place competitive. I don't have
| any have any allegiance to any vendor, I just want whatever delivers
| the best performance for the kind of money that I can afford. The idea
| of a competitive market place seems to be completely lost on the
| "fanboy" types that enjoy gloating when a rival vendor runs into
| trouble.
|

Don't count ATi out yet on the DX-10 front, particularly if you are looking
at low- to mid-range cards... I've been hearing great things about their
new HD 3850, which comes with an HD decoder, Shader 4.1 and DX-10.1 support
(which the 8800GT lacks)... And draws quite a bit less power than the HD
2900 (from what I understand, haven't seen the actual numbers on this yet).
Drawing less power is a trend I'd love to see, I'm tired of seeing cards
that are just throwing gobs of power to the GPU and basically requiring you
to rewire your house with heavier circuits just to be able to run the power
supplies needed to drive your new "cutting edge" gaming rig... In these
days of smaller cheaper lighter faster with being "green" so important, it's
so funny watching the video card companies throw "green" out the window.

Anyhow, I've always been an nVidia user, and for serious bleeding-edge
graphics power, they still can't seem to be beat... But it looks like ATi
is at least getting out of the starting gate, let's hope they keep improving
and keep nVidia on their toes. AMD could use the revenue

CoinSpin

 

[Mr Rob]

On Mon, 17 Dec 2007 09:03:55 -0500, "CoinSpin"

Anyhow, I've always been an nVidia user, and for serious bleeding-edge
graphics power, they still can't seem to be beat... But it looks like ATi
is at least getting out of the starting gate, let's hope they keep improving
and keep nVidia on their toes. AMD could use the revenue

Thanks for the tip about the next offering from ATi. Maybe it's not a
done deal for me yet after all.