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Chip maker AMD in financial trouble

By Squidny     Mar 10, 2007 in Technology
Advanced Micro Devices finds itself financially wounded from price war with its competitor Intel.
AMD, the number two microprocessor provider for PCs who is second to rival Intel is in dire financial straits. Although price competition has cut into both companies profits, AMD's stock has taken the hit the hardest with the company's stock plummeting 60 percent over the last year.
This has cost the stockholders more than 10 billion dollars and investors are worried that AMD may be spending too much in an attempt to keep up with "Intel's aggressive transition to next-generation manufacturing technology."
Also, Wall Street analysts believe that AMD may especially be in need of money after a $5.6 billion dollar aquisition of ATI Technologies Inc. - a graphics chip maker.
While AMD's annual report stated that the enormous debt may hurt its ability to borrow money for the $2.5 billion in expenditures it has planned for 2007, a potential source of revenue may come from archrival Intel itself.
AMD has a lawsuit against Intel claiming antitrust violations for allegedly "forcing customers into exclusive deals" and "secret rebates." The trial is not set to begin for two years however.
Looks like this is one "David vs Goliath" fight in which "David" may not survive without significant injury, if at all.
More about Amd, Debt, Trouble
 
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