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sprite scaler

External


Since: Jan 24, 2008
Posts: 1



(Msg. 1) Posted: Thu Jan 24, 2008 10:16 pm
Post subject: IBM Takeover of AMD Speculations Arise
Archived from groups: comp>sys>ibm>pc>hardware>chips (more info?)
IBM Takeover of AMD Speculations Arise

Speculations that microchip maker AMD might be bought by IBM surfaced
the last couple of days, rising AMD's stock shares by 8% yesterday.

Neither parties have commented on the rumour, which however proved to
be enough to offer AMD's share a a significant boost. At the same
time, IBM's stock was down yesterday by 1.7 percent on the New York
Stock Exchange.

Some analysts have predicted that with AMD shares being so low, it
might be a good time for IBM to acquire them. IBM has had a research
and development expense-sharing agreement with AMD. AMD might want to
use IBM's East Fishkill, New York, chip-fabrication plant to build
microprocessors, in an effort to stengthen its position against rival
Intel, who currently has 12 chipmaking plants across the globe,
compared to AMD's single chip fabrication plant in Germany.

On the other hand, IBM's recent policy to move away from hardware and
manufacturing and moving to software and solutions, make the
acquisition a low-probability event. IBM sold its computer hard disk
business to Hitachi in 2002 and its PC business to China's Lenovo
Group in 2005. Last year, IBM sold its printer business to Japan's
Ricoh. Earlier Wednesday, IBM said it was buying privately held
AptSoft Corp to expand its business event processing software
portfolio.

Mergermarket.com, a mergers-focused news service, reported on the
Financial Times' Web site that IBM and AMD could strengthen their
current partnership.

"A deal could see IBM's microelectronics division merge with AMD at
some point, possibly in the near term," mergermarket.com correspondent
David Zielenziger wrote, citing "industry sources."

http://www.cdrinfo.com/Sections/News/Details.aspx?NewsId=22347




By Philipp Gollner and Duncan Martell

SAN FRANCISCO (Reuters) - Advanced Micro Devices shares rose as much
as 8 percent on Wednesday on speculation that the microchip maker
might be bought by IBM, but analysts said the chances of an
acquisition were slim.

Spokesmen for IBM and AMD, based in Sunnyvale, California, declined to
comment on the rumor.

Shares of AMD, the second-largest maker of microprocessors after Intel
Corp , added as much as 55 cents to $7.39 and were up 23 cents or 3.4
percent at $7.07 in afternoon trading. International Business Machines
Corp stock was down $1.73 or 1.7 percent at $99.58 on the New York
Stock Exchange.

"The takeover of AMD by IBM has been mentioned before and with AMD
shares being so low, it might be a good time for IBM to acquire them,"
said William Lefkowitz, options strategist at brokerage firm vFinance
Investments in New York.

AMD call options were trading higher than usual because of the rumor,
he added.

IBM of Armonk, New York, has had a research and development expense-
sharing agreement with AMD, and analysts have speculated that AMD
might want to use IBM's East Fishkill, New York, chip-fabrication
plant to build microprocessors.

An acquisition of AMD would be "a pretty low-probability event because
IBM is moving away from hardware and manufacturing and moving to
software and solutions," said Ashok Kumar, an analyst at CRT Capital
Group. "I don't think IBM wants the bragging rights to go up against
Intel."

"IBM buying AMD is a nonstarter," Kumar said. "There's no rationale
for that. Investors would just pound IBM's stock."


IBM has been exiting computer hardware businesses to focus on higher-
profit software and technology services tailored to clients.

Earlier Wednesday, IBM said it was buying privately held AptSoft Corp
to expand its business event processing software portfolio.

Revenue from IBM's microelectronics business fell 15 percent in the
fourth quarter. The unit mainly supplies chips to run IBM's mainframe
computers and business server machines.

IBM sold its computer disk-drive business to Hitachi Ltd in 2002 and
its personal-computer business to China's Lenovo Group Ltd in 2005.
Last year, IBM sold its printer business to Japan's Ricoh Co Ltd
(7752.T: Quote, Profile, Research).

An acquisition of AMD would "destroy shareholder value for IBM," Kumar
said. "That argument is a nonstarter."

AMD has said it would give details of its "asset-light" manufacturing
strategy sometime this year. AMD currently has a chip fabrication
plant, or fab, in Germany and has plans to build another one outside
Albany, New York.

Intel, by comparison, has some 12 chipmaking plants across the globe,
and its manufacturing prowess has long been a competitive advantage
against smaller rival AMD.

Mergermarket.com, a mergers-focused news service, reported on the
Financial Times' Web site that IBM and AMD could strengthen their
current partnership.

"A deal could see IBM's microelectronics division merge with AMD at
some point, possibly in the near term," mergermarket.com correspondent
David Zielenziger wrote, citing "industry sources."

http://www.reuters.com/article/hotStocksNews/idUSN2341197920080123


Newest Reuters wire claims IBM is considering a purchase of struggling
AMD

Few will argue that AMD's image and profitability are not what they
used to be. AMD was having issues prior to its purchase of graphics
maker ATI and things have only worsened since the ATI purchase.

DailyTech reported last week that AMD posted a massive loss for Q4
2007 of $1.72 billion while rival Intel posted significant profits
across its operations. Between new architectures and aggressive
pricing, a shakeup in the microprocessor arena is almost certain for
2008.

Reuters now reports IBM is possibly considering a buyout of
floundering AMD and some say this would be an ideal time for the
buyout with AMD stock prices at a low. IBM and AMD currently have a
research and development expense-sharing deal in place. This is not
the first time rumors of an IBM buyout of AMD have circulated.

Other companies have their eye on AMD as well. Texas Instruments and
Freescale have both expressed interest in turning AMD around.

Analyst Ashok Kumar from CRT Capital Group claims, "[IBM buying AMD
is] a pretty low-probability event because IBM is moving away from
hardware and manufacturing and moving to software and solutions. I
don't think IBM wants the bragging rights to go up against Intel."

IBM sold its hard drive making business to Hitachi in 2002 and sold
its PC business to Lenovo in 2005. According to Kumar an IBM purchase
of AMD would "destroy shareholder value for IBM.

http://www.dailytech.com/Report+IBM+Could+Make+a+Move+for+AMD+Analysts...ubtful/

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Yousuf Khan

External


Since: Dec 17, 2005
Posts: 296



(Msg. 2) Posted: Sun Jan 27, 2008 10:11 am
Post subject: Re: IBM Takeover of AMD Speculations Arise [Login to view extended thread Info.]
Archived from groups: per prev. post (more info?)
sprite scaler wrote:
> IBM Takeover of AMD Speculations Arise


IBM only wants software businesses these days.

Yousuf Khan

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mygarbage2000

External


Since: Oct 17, 2004
Posts: 219



(Msg. 3) Posted: Sun Jan 27, 2008 4:23 pm
Post subject: Re: IBM Takeover of AMD Speculations Arise [Login to view extended thread Info.]
Archived from groups: per prev. post (more info?)
On Sun, 27 Jan 2008 10:11:10 -0500, Yousuf Khan <bbbl67.TakeThisOut@yahoo.com>
wrote:

>sprite scaler wrote:
>> IBM Takeover of AMD Speculations Arise
>
>
>IBM only wants software businesses these days.
>
> Yousuf Khan

Why, then, they got a new fab in East Fishkill? Just to show everyone
they have balls? (As per fmr. AMD CEO Sanders, "real men got fabs".)
Wink
If AMD's free fal continues to the point when market cap gets well
below their book value, a buyer might emerge. Not necessarily IBM -
there are a lot of vultures out there - but at certain price point the
purchase might make sence even for IBM.

NNN
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krw

External


Since: Jan 27, 2008
Posts: 1



(Msg. 4) Posted: Sun Jan 27, 2008 7:42 pm
Post subject: Re: IBM Takeover of AMD Speculations Arise [Login to view extended thread Info.]
Archived from groups: per prev. post (more info?)
In article <pfbpp35e2pv1q8gulv8qfgrj66ars3sok5.RemoveThis@4ax.com>,
mygarbage2000.RemoveThis@hotmail.com says...
> On Sun, 27 Jan 2008 10:11:10 -0500, Yousuf Khan <bbbl67.RemoveThis@yahoo.com>
> wrote:
>
> >sprite scaler wrote:
> >> IBM Takeover of AMD Speculations Arise
> >
> >
> >IBM only wants software businesses these days.
> >
> > Yousuf Khan
>
> Why, then, they got a new fab in East Fishkill? Just to show everyone
> they have balls? (As per fmr. AMD CEO Sanders, "real men got fabs".)
> Wink

IBM is still in the hardware business and as such need a fab so they
can control their (technological) destiny. They certainly don't
need the capacity of their own fab but do need the control owning
one gives. Saunders was right, if you want to stay on the bleeding
edge.

> If AMD's free fal continues to the point when market cap gets well
> below their book value, a buyer might emerge. Not necessarily IBM -
> there are a lot of vultures out there - but at certain price point the
> purchase might make sence even for IBM.

IBM has no use for more capacity, though they would like to be able
to run fewer part numbers. The certainly have no use for a money
loser or more debt.

--
Keith
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Yousuf Khan

External


Since: Dec 17, 2005
Posts: 296



(Msg. 5) Posted: Sun Jan 27, 2008 9:52 pm
Post subject: Re: IBM Takeover of AMD Speculations Arise [Login to view extended thread Info.]
Archived from groups: per prev. post (more info?)
nobody.RemoveThis@nowhere.net wrote:
>> IBM only wants software businesses these days.
>>
>> Yousuf Khan
>
> Why, then, they got a new fab in East Fishkill? Just to show everyone
> they have balls? (As per fmr. AMD CEO Sanders, "real men got fabs".)
> Wink
> If AMD's free fal continues to the point when market cap gets well
> below their book value, a buyer might emerge. Not necessarily IBM -
> there are a lot of vultures out there - but at certain price point the
> purchase might make sence even for IBM.
>
> NNN

Realistically, I still don't think a buyout is gonna happen. I think an
alternative theory is that AMD and IBM might enter into a joint-venture
of some sort. It's a bit more than the alliance that they got now, and a
bit less than a merger.

However, to play devil's advocate, here's the reasons why I think IBM
might actually want to buyout AMD. Most people think that IBM is trying
to divest itself of all of its hardware businesses and become only a
software and services company. That's actually a bit too simplistic, IBM
is really just divesting itself of low-margin hardware businesses. A low
margin business these days would be defined as anything that can be
produced in Asia with lots of little hands turning screwdrivers, and
which return just a few dollars more than it costs to make them. That's
why IBM has gotten rid of its PC business, but not its servers. It's
gotten rid of its hard disks, but not its storage systems. It's gotten
rid of its inkjets but not its networked lasers. Etc.

In this light, AMD does not fit into this category. First off, you don't
need a lot of labour to make chips (i.e. hundreds of little hands
turning screwdrivers), most of it is already automated. Labour costs and
real estate costs are minor expenses in this environment. You can put a
fab right in the middle of the most expensive sections of downtown Tokyo
or New York, or in the most remote deserts of China, and the cost to
make the chips won't vary that much. And second of all, the margins that
chips get are pretty decent.

Another issue is that it is widely believed that AMD has a poison pill
hidden inside its license with Intel. It is thought that a clause states
that Intel has the right to revoke AMD's x86 license if a buyer takes
out a majority interest in AMD. That's why AMD hasn't been bought out
after all of this time already. The only way AMD could change hands is
if the buyer also has its own x86 license from Intel, and IBM is one of
the few that has that.

Also AMD's current losses are as a result of a lack of enough chipmaking
capacity: the more chips it makes, the closer it is to break-even with
its fixed costs. Fixed costs, rather than variable costs, are the
majority of AMD's costs. So for AMD the more chips it can make within
its own walls, the better it is. If it outsources to outside places like
Chartered or even a separate IBM, it will not be contributing to paying
down its own fixed costs. However, if it is part of IBM, then IBM's fabs
are AMD's fabs, and internal capacity goes up immediately without even
needing to build a fab.

It's also been said that IBM could've taken out AMD way back in 2000
when AMD's stock price was also this depressed, but it didn't. So why
should it bother now? But back in 2000, IBM didn't know if AMD's
upcoming Opteron and Athlon chips would've been a hit, but now it knows
that AMD has some traction with its chips. Afterall, AMD was able to
technologically dominate Intel for 3 full years, from 2003 to 2006.
Also, AMD has a gotten a fully established graphics business now, which
is something that it didn't have in 2000 either. Neither CPUs nor GPUs
are yet a commodity business.

Yousuf Khan
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L D'Bonnie

External


Since: Jan 28, 2008
Posts: 1



(Msg. 6) Posted: Mon Jan 28, 2008 6:34 pm
Post subject: Re: IBM Takeover of AMD Speculations Arise [Login to view extended thread Info.]
Archived from groups: per prev. post (more info?)
Yousuf Khan wrote:
> nobody RemoveThis @nowhere.net wrote:
>>> IBM only wants software businesses these days.
>>>
>>> Yousuf Khan
>>
>> Why, then, they got a new fab in East Fishkill? Just to show everyone
>> they have balls? (As per fmr. AMD CEO Sanders, "real men got fabs".)
>> Wink
>> If AMD's free fal continues to the point when market cap gets well
>> below their book value, a buyer might emerge. Not necessarily IBM -
>> there are a lot of vultures out there - but at certain price point the
>> purchase might make sence even for IBM.
>>
>> NNN
>
> Realistically, I still don't think a buyout is gonna happen. I think an
> alternative theory is that AMD and IBM might enter into a joint-venture
> of some sort. It's a bit more than the alliance that they got now, and a
> bit less than a merger.
>
> However, to play devil's advocate, here's the reasons why I think IBM
> might actually want to buyout AMD. Most people think that IBM is trying
> to divest itself of all of its hardware businesses and become only a
> software and services company. That's actually a bit too simplistic, IBM
> is really just divesting itself of low-margin hardware businesses. A low
> margin business these days would be defined as anything that can be
> produced in Asia with lots of little hands turning screwdrivers, and
> which return just a few dollars more than it costs to make them. That's
> why IBM has gotten rid of its PC business, but not its servers. It's
> gotten rid of its hard disks, but not its storage systems. It's gotten
> rid of its inkjets but not its networked lasers. Etc.
>
> In this light, AMD does not fit into this category. First off, you don't
> need a lot of labour to make chips (i.e. hundreds of little hands
> turning screwdrivers), most of it is already automated. Labour costs and
> real estate costs are minor expenses in this environment. You can put a
> fab right in the middle of the most expensive sections of downtown Tokyo
> or New York, or in the most remote deserts of China, and the cost to
> make the chips won't vary that much. And second of all, the margins that
> chips get are pretty decent.
>
> Another issue is that it is widely believed that AMD has a poison pill
> hidden inside its license with Intel. It is thought that a clause states
> that Intel has the right to revoke AMD's x86 license if a buyer takes
> out a majority interest in AMD. That's why AMD hasn't been bought out
> after all of this time already. The only way AMD could change hands is
> if the buyer also has its own x86 license from Intel, and IBM is one of
> the few that has that.
>
> Also AMD's current losses are as a result of a lack of enough chipmaking
> capacity: the more chips it makes, the closer it is to break-even with
> its fixed costs. Fixed costs, rather than variable costs, are the
> majority of AMD's costs. So for AMD the more chips it can make within
> its own walls, the better it is. If it outsources to outside places like
> Chartered or even a separate IBM, it will not be contributing to paying
> down its own fixed costs. However, if it is part of IBM, then IBM's fabs
> are AMD's fabs, and internal capacity goes up immediately without even
> needing to build a fab.
>
> It's also been said that IBM could've taken out AMD way back in 2000
> when AMD's stock price was also this depressed, but it didn't. So why
> should it bother now? But back in 2000, IBM didn't know if AMD's
> upcoming Opteron and Athlon chips would've been a hit, but now it knows
> that AMD has some traction with its chips. Afterall, AMD was able to
> technologically dominate Intel for 3 full years, from 2003 to 2006.
> Also, AMD has a gotten a fully established graphics business now, which
> is something that it didn't have in 2000 either. Neither CPUs nor GPUs
> are yet a commodity business.
>
> Yousuf Khan


Out of curiosity, where would Intel be today had IBM not picked
their chip for the original IBM PC?

LdB
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krw

External


Since: Jan 28, 2008
Posts: 2



(Msg. 7) Posted: Mon Jan 28, 2008 9:55 pm
Post subject: Re: IBM Takeover of AMD Speculations Arise [Login to view extended thread Info.]
Archived from groups: per prev. post (more info?)
In article <479e7293$0$24837$6c5eefc5@news.maximumusenet.com>,
nobody.TakeThisOut@mts.net says...
> Yousuf Khan wrote:
> > nobody.TakeThisOut@nowhere.net wrote:
> >>> IBM only wants software businesses these days.
> >>>
> >>> Yousuf Khan
> >>
> >> Why, then, they got a new fab in East Fishkill? Just to show everyone
> >> they have balls? (As per fmr. AMD CEO Sanders, "real men got fabs".)
> >> Wink
> >> If AMD's free fal continues to the point when market cap gets well
> >> below their book value, a buyer might emerge. Not necessarily IBM -
> >> there are a lot of vultures out there - but at certain price point the
> >> purchase might make sence even for IBM.
> >>
> >> NNN
> >
> > Realistically, I still don't think a buyout is gonna happen. I think an
> > alternative theory is that AMD and IBM might enter into a joint-venture
> > of some sort. It's a bit more than the alliance that they got now, and a
> > bit less than a merger.
> >
> > However, to play devil's advocate, here's the reasons why I think IBM
> > might actually want to buyout AMD. Most people think that IBM is trying
> > to divest itself of all of its hardware businesses and become only a
> > software and services company. That's actually a bit too simplistic, IBM
> > is really just divesting itself of low-margin hardware businesses. A low
> > margin business these days would be defined as anything that can be
> > produced in Asia with lots of little hands turning screwdrivers, and
> > which return just a few dollars more than it costs to make them. That's
> > why IBM has gotten rid of its PC business, but not its servers. It's
> > gotten rid of its hard disks, but not its storage systems. It's gotten
> > rid of its inkjets but not its networked lasers. Etc.
> >
> > In this light, AMD does not fit into this category. First off, you don't
> > need a lot of labour to make chips (i.e. hundreds of little hands
> > turning screwdrivers), most of it is already automated. Labour costs and
> > real estate costs are minor expenses in this environment. You can put a
> > fab right in the middle of the most expensive sections of downtown Tokyo
> > or New York, or in the most remote deserts of China, and the cost to
> > make the chips won't vary that much. And second of all, the margins that
> > chips get are pretty decent.
> >
> > Another issue is that it is widely believed that AMD has a poison pill
> > hidden inside its license with Intel. It is thought that a clause states
> > that Intel has the right to revoke AMD's x86 license if a buyer takes
> > out a majority interest in AMD. That's why AMD hasn't been bought out
> > after all of this time already. The only way AMD could change hands is
> > if the buyer also has its own x86 license from Intel, and IBM is one of
> > the few that has that.
> >
> > Also AMD's current losses are as a result of a lack of enough chipmaking
> > capacity: the more chips it makes, the closer it is to break-even with
> > its fixed costs. Fixed costs, rather than variable costs, are the
> > majority of AMD's costs. So for AMD the more chips it can make within
> > its own walls, the better it is. If it outsources to outside places like
> > Chartered or even a separate IBM, it will not be contributing to paying
> > down its own fixed costs. However, if it is part of IBM, then IBM's fabs
> > are AMD's fabs, and internal capacity goes up immediately without even
> > needing to build a fab.
> >
> > It's also been said that IBM could've taken out AMD way back in 2000
> > when AMD's stock price was also this depressed, but it didn't. So why
> > should it bother now? But back in 2000, IBM didn't know if AMD's
> > upcoming Opteron and Athlon chips would've been a hit, but now it knows
> > that AMD has some traction with its chips. Afterall, AMD was able to
> > technologically dominate Intel for 3 full years, from 2003 to 2006.
> > Also, AMD has a gotten a fully established graphics business now, which
> > is something that it didn't have in 2000 either. Neither CPUs nor GPUs
> > are yet a commodity business.
> >
> > Yousuf Khan
>
>
> Out of curiosity, where would Intel be today had IBM not picked
> their chip for the original IBM PC?

Or where would they be if IBM hadn't floated their boat in the mid-
80s, or sold the shares back (ignoring the fact that IBM needed the
money themselves by the end of the '80s).

--
Keith
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Robert Redelmeier

External


Since: Sep 09, 2004
Posts: 254



(Msg. 8) Posted: Tue Jan 29, 2008 12:04 pm
Post subject: Re: IBM Takeover of AMD Speculations Arise [Login to view extended thread Info.]
Archived from groups: per prev. post (more info?)
L D'Bonnie <nobody.RemoveThis@mts.net> wrote in part:
> Out of curiosity, where would Intel be today had IBM
> not picked their chip for the original IBM PC?

At a guess, where any other reasonably successful LSI company is:
Motorola, TI, ... Or maybe your point is Intel wouldn't have
been successful? I don't see that. They've made mistakes, but
also have always had pretty good strategy (4004). Of course,
any firm can get hit if it financially overextends.

-- Robert
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Yousuf Khan

External


Since: Dec 17, 2005
Posts: 296



(Msg. 9) Posted: Thu Jan 31, 2008 6:03 pm
Post subject: Re: IBM Takeover of AMD Speculations Arise [Login to view extended thread Info.]
Archived from groups: per prev. post (more info?)
L D'Bonnie wrote:
> Out of curiosity, where would Intel be today had IBM not picked
> their chip for the original IBM PC?


It used to make DRAM at one time, maybe it would've still been making it
now?

Yousuf Khan
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