Back in 2006, heads turned when chipmaker Advanced Micro Devices plunked down about $5.4 billion to acquire graphics developer ATI…but things haven’t quite worked out like AMD planned. A year ago, AMD was forced to write down some $1.7 billion of the “goodwill” value of ATI—essentially, admit it overpaid for the business—and back in July AMD wrote off another $880 million, citing ATI’s underperforming mobile graphics and digital television technologies…which it sold to Broadcom in August for just under $193 million. All told, AMD had eaten about half the $5.4 billion it had sunk into the graphics developer…and now, in a new filing with the Securities and Exchange Commission, the company admits it will have to write down the value of ATI by an unspecified amount that will have a “material” impact on the company’s financials.
AMD cites the long-term financial outlook for the company, given the current global economic climate, as one reason for the write-down, along with AMD’s own decline in stock price and reduced market capitalization. The company says it will not have to spend any money as a result of these “goodwill impairments,” but has also announced the layoffs of some 600 employes, 100 more than it announced it would cut loose last month. Those job cuts come after AMD cut 10 percent of its workforce earlier this year, eliminating some 1,600 positions.
AMD shed its CEO Hector Ruiz and other top execs earlier this year, and has recently entered a $6 billion manufacturing partnership with Abu Dhabi investors to create the Foundry Company, which will essentially convert AMD into a fabless chip designer.
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