Linked by Thom Holwerda on Tue 13th Nov 2012 22:24 UTC
AMD "Advanced Micro Devices has hired JPMorgan Chase & Co to explore options, which could include a potential sale, as the chipmaker struggles to find a role in an industry increasingly focused on mobile and away from traditional PCs, according to three sources familiar with the situation." Woah. Bad news for competition in the x86 space.
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RE[3]: Thom
by galvanash on Wed 14th Nov 2012 03:07 UTC in reply to "RE[2]: Thom"
Member since:

i don't think they could even find a buyer
nobody in their right mind would go headon with intel, and intel can't buy them thanks to some anti-competitive laws

The real question is whether anyone can buy them (practically)... From information disclosed after their 2001 lawsuit settlement with Intel, their x86 license is non-transferable. They in fact had their license agreement amended (after their 2009 lawsuit) just to make Global Foundries legitimate, since originally they were restricted to manufacturing x86 chips themselves (i.e. they could not use a 3rd party).

There is alot of history between the two companies when it comes to x86 licensing, going back all the way to the eighties... Suffice to say that, as things stand now, a buyer of AMD would not be able to manufacture x86 compatible chips without negotiating their own license with Intel, at least not anything beyond the 486 instruction set.

That said, imo, the only buyer than makes any sense at all is someone who already has a current x86 license. Which unfortunately, afaik, is no one. Really, the only current, full, non-expiring x86 licensee of Intel is AMD, everyone else is limited to manufacture only licenses or has a limited/partial license.

VIA, for example, negotiated a 10 year license in 2003, so their license expires next year. They may be able to re-negotiate it, but I don't see how they could scrape together the money to afford AMD anyway. Outside of VIA? There isn't anyone I know of left... IBM may still have a license, but I doubt it covers some of the newer stuff in the ISA. Nvidia? Nope.

AMD's only bankable assets are skilled worker and a GPU business - their CPU line will likely die with them. Ironically, the only way that AMD could sell their x86 IP to someone else is if Intel brokered and blessed the deal...

Reply Parent Score: 2

RE[4]: Thom
by r_a_trip on Wed 14th Nov 2012 09:33 in reply to "RE[3]: Thom"
r_a_trip Member since:

Unless someone does a reverse triangular merger, whereby the purchaser creates a shell subsidiary that purchases AMD and then merges the subsidiary into AMD. In this construction AMD becomes a wholly owned subsidiary, but it survives as a business entity and all non-transferable assets endure.

If the Intel - AMD licensing agreements don't have specific verbiage about this scenario, someone could buy AMD and keep the x86 licenses intact.

It's the same trick Attachmate used to acquire Novell and keep Novell intact.

Reply Parent Score: 5

RE[5]: Thom
by galvanash on Wed 14th Nov 2012 18:05 in reply to "RE[4]: Thom"
galvanash Member since:

Read the agreement...

6.3 Change of Control. In the event of a Change of Control of AMD, the definition of Microprocessor as defined in Section 1.5 shall be limited to those devices that fell within Section 1.5 on the date of the Change of Control and shall be further limited to x86 AMD Microprocessors for use in a Personal Computer

Change of Control shall mean:

1. any person or group of person (... snip) beneficial ownership of captal stock of AMD entitling the holder(s) thereof to more than 50% of the voting power (... snip) or an interest sufficient to reieve more than 50% of the profits or losses of AMD; or

2. AMD enters into a merger, consolidation, reorganization, or similar transaction (or series of related transactions) with any Person or group of Persons in which less than 50% of the voting power (... snip) of the outstanding capital stock of AMD (if it is the surviving entity) or the Acquiring Person (if it is the surviving entity) (... snip)

3. AMD sells to any Person(s) in one or more related transactions propterties or assets representing all or substantially all of the properties and assets of AMD.

I am certainly not fluent in legalize, but I interpret item 2 there to specifically address a triangular merger scenario.

Additionally, if I understand the agreement correctly (big if) - a buyer would be able to continue manufacturing existing AMD designs as the dissolution of the agreement would not retroactively affect existing products... But without a new agreement with Intel they buyer could not design new microprocessors because they would no longer have license to do so.

Also, interestingly... the "existing design" clause explicitly limits the buyer to "Personal Computer" microprocessors, which is defined in the agreement to be servers, workstations, desktops, laptops, tablets, netbooks, and notebooks but not smartphones, cell phones, pocket pcs, or consumer electronic devices. It does not mention game consoles, but I would think that would fall under a consumer electronic device.

That means (again, imo) that the buyer could not sell any AMD microprocessors (even existing ones) for use in game consoles... I.e. they would lose the ability to sell Microsoft processors for the xbox. For the 360 that is assuming there is IP in the xenos GPU that is covered by license form Intel. I certainly don't know the answer to that, but I wouldn't be surprised if there is. And rumor was that AMD was making a fusion derivative for the xbox 720 - that would definitely be off the table.

Edited 2012-11-14 18:23 UTC

Reply Parent Score: 3