AMD also will review whether there's any impairment to ATI's intangible assets, which would result in an additional -- and possibly material -- noncash charge.
Two quarters ago, AMD took an impairment charge related to ATI of more than $800 million.
Despite the noncash nature of these charges, a significant diminishing of the company's assets is the last thing the company needs as it likely faces
several quarters of continuing losses
and increasing doubts about its viability as a standalone company. Ironically, the company's ATI division is probably its most viable business.
AMD warned Dec. 4 that its fourth-quarter revenue would plummet 25% from the third quarter to about $1.18 billion. This prompted investment banking firm Collins Stewart, which was already projecting calendar 2009 operating losses of $700 million, to say it didn't expect the company to achieve operational break-even revenue before 2010.
On Tuesday, additional dourness came forth from a report by Friedman Billings that recent checks with Asian chip distributors were worse than their prior expectations, reflecting continued global demand weakness. The firm believes shipments from AMD,
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were down as much as 20% to 30% month over month in November.
In his widely read "20 Surprises for 2009"
, Doug Kass compiles a list of what he calls outliers, events that have a reasonable chance of occurring next year despite their long odds. Kass puts and AMD bankruptcy filing on his list, citing a general lagging of tech stocks in 2009 as capital spending by companies loses ground to maintenance expenditures.