AMD takes financial hit on ATi deal

 

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By Barry Collins

Posted on 13 Dec 2007 at 08:52

AMD's troubles continue to mount after the company admitted it will write-down the value of its 2006 acquisition of ATi.

The company hasn't specified how much the write-down will be, short of saying it will be a "material" impairment charge.

AMD bought ATi for $5.6 billion, in what many analysts regarded as a high-risk synergy between the chip and graphics card maker. The merger has yet to bear fruit, with processor/graphics integration projects such as Fusion not scheduled to launch until next year, at the earliest.

AMD has also had problems with its traditional business. Delays in getting its Barcelona chips to market have allowed Intel to reinforce its leadership in the desktop processors, with a recent report from iSuppli claiming that AMD sales had fallen by nearly a quarter in the past year.

The difficulties of integrating ATi and the processor delays have hit AMD's profits hard, with the company posting losses for four consecutive quarters.

AMD will hold a meeting with financial analysts in New York today, which may reveal more about the company's current position.