Last month, Audit Integrity released a report about 10 companies that have the highest likelihood of declaring bankruptcy. One of the names in this list was Advanced Micro Devices (AMD).

Earlier this month at an industry event, quite a few people were discussing news that the company has filed for bankruptcy. Back on the fact that AMD has not been able to record profits for 11 quarters, this was not difficult to digest.

On closer inspection, what emerged was that it was not AMD but one of its hived off division, Spansion, a flash memory provider, that filed for reorganization under Chapter 11 of the US Bankruptcy Code.

But still this fact did not make lessen the zest of conversations amongst interested parties at the event. Instead, the talk then veered to when AMD would finally go under the hammer. What is surprising is that while most of the group anticipated this eventuality to come to pass soon, they were not very happy it.

For a long time now, talk has been going around about the fiscal distress that AMD is enduring. Part of it is tied to its $5 billion debt figure.

To offset some of this loss, AMD had even spun off its manufacturing operations to a company called Global Foundries, where it had a stake. Before that it acquired graphics chip company ATI Technologies, which is around the same time that the naysayers stared predicting its downfall. Now analysts are stating that the company will continue to post losses till 2010.

This is despite the fact that the company has some well performing products like Athlon and ATI's Radeon graphics chip. Earlier this year, it strove to bring out its Istanbul Operton chipset into the market, months before its November 2009 launch date.

In India, the company has been trying its best to reach out to the a wider customer base with an ongoing channel outreach program where it is touching base with partners in the hinterlands and trying to get their buy in for AMD's products.

And yet, these rumors persist. Incidentally, a look at various technology forums show that there are a lot of users out there who are rooting for AMD, only to ensure there is some competition in the market to Intel.

AMD has always been the image of David fighting Goliath, which often brings out the sympathies of most people sitting on the fence. This is probably why it has a lot of support from the channel and customers alike.

But it is fairly obvious that the company is fighting a very inclined uphill battle with a huge debt burden on their back. How they will be able to prove the naysayers wrong, is a feat worth watching out for.

VINITA BHATIA
vinitavs@cybermedia.co.in

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