Rumor: AMD Considering Splitting Up Its Business

AMD is allegedly looking to make some pretty big corporate changes as it works to find a way to better compete with arch-rival Intel. According to a new report from Reuters, citing anonymous sources, AMD is allegedly looking to either split its business in some capacity or spin-off part of its business so it can then devote more resources, and concentration, to stepping up against Intel.

Though everything is allegedly in the preliminary stages, AMD is allegedly working with a consulting firm to figure out just how such a transition might work—as well, we presume, to identify the best parts of the business that could spin off into something new entirely.

AMD, however, claims that no such split is in the works.

"While we normally would not comment on such a matter, we can confirm that we have no such project in the works at this time. We remain committed to the long-term strategy we laid out for the company in May at our Financial Analyst Day," a spokesperson told ExtremeTech.

One example of a potential split—the only example said sources allegedly provided to Reuters—was that AMD might split its enterprise and CPU business from its graphics and licensing business. AMD had previously considered doing so, but didn't; that option appears to be back on the table.

However, doing so would basically counteract the very 2008 merger between AMD and ATI that allowed AMD to start integrating high-quality graphics processors into its CPUs. This allowed the company to begin developing APUs, or Accelerated Processing Units, that have gone on to power some pretty high-profile projects: Microsoft's Xbox One gaming console, for example, as well as Sony's PlayStation 4.

Separating AMD's two major businesses and, essentially, returning things to a pre-2008 state would likely force AMD to spend more resources on both, argues WCCFtech's Khalid Moammer.

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"However it may also give the two branches of the company a more razor edged focus to innovate. But when it comes down to it, I'd personally would argue that if a breakup is warranted now, then a merger 7 years ago was not," he writes.

AMD announced this past October that it was planning to cut seven percent of its workforce—or just around 700 people or so—in an effort to trim expenses. As part of the announcement, AMD CEO Lisa Su noted that new contracts in the company's customized chips line of business should bring in about $1 billion in revenue across the next three years. AMD's division that makes the aforementioned chips for gaming consoles posted a revenue increase of 21 percent for the company's third fiscal quarter.