AMD Gets Kicked While It's (Still) Down

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, Texas Instruments (TXN), Microsemi (MSCC) were down as much as 20% to 30% month over month in November.

In his widely read "20 Surprises for 2009" published Monday, 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.

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