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DiggIt's been a lousy week for processor maker Advanced Micro Devices Inc. [AMD] Tuesday, a CNBC interview with the struggling chipmaker's CEO Hector Ruiz was leaked to Reuters, which quoted the executive as saying he wasn't planning to retire in 2008. Granted, it isn't news that AMD has been grooming chief operating officer Dirk Meyer to succeed Ruiz, but just the fact that he had to answer that question was unfortunate.
Then comes Wednesday's news that AMD is planning to take an impairment charge on goodwill associated with its $5.4 billion acquisition of graphics chipset maker ATI Technologies Inc. From the outset, critics have taken shots at the deal, which is the largest in AMD's history. AMD took on an additional $2.5 billion in debt to finance the transaction, for one. The burden has compelled the chipmaker to look outwardly for additional cash resources.
AMD didn't reveal the size of the write-off, but its 2007 10-K puts the goodwill portion of the ATI purchase price at $3.2 billion. It's more tough news for the company, which has been plagued with product setbacks and poor stock performance. There undoubtedly will be plenty of hard questions for Ruiz as he takes the stage at the company's analyst conference in New York Thursday. - Olaf de Senerpont Domis
See Dec. 12 8-K from SEC.gov
See Dec. 11 story from Reuters
See Nov. 19 post from Money Out
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