Exclusive: Advanced Micro Devices mulling breakup, spinoff - sources
Chipmaker Advanced Micro Devices is at the initial stage of reviewing whether to split itself in two or spin off a business, seeking to reverse its fortunes and take on rival Intel Corp, according to three people familiar with the matter.
Context & Ripple Effects
Back in June 2015, AMD was the struggling challenger: three sources told Reuters it was reviewing a split or spinoff of a business to reverse its fortunes and take on Intel. A decade later the roles have inverted — AMD is still one company, signing memory and compute collaborations and shipping data-center accelerators, while Intel is the one whose board has weighed splitting its product and foundry units after its stock fell more than 50% in a year.
What makes the 2015 review worth revisiting is what it foreshadowed: the question of whether chip designers should stay fused with manufacturing. Intel's answer has been costly — a foundry operation that lost $13B+ on $17.5B in revenue in 2024 — pushing CEO Lip-Bu Tan toward spinning off non-core assets rather than the whole-company split AMD once contemplated.
First-order effects
- AMD's board and advisers enter an initial-stage review of a two-way split or spinoff, with the explicit stated goal of reshaping the company to compete against Intel.
- Investors get a live restructuring option on the table at a moment when AMD's core business alone was seen as insufficient to reverse its competitive position.
Second-order effects
- A slimmer, design-focused AMD would pressure Intel's product lines directly — the same product-vs-foundry separation Intel itself is now exploring under Lip-Bu Tan's non-core asset spinoff plan.
- Any spinoff would force suppliers and customers to pick counterparties: a separated unit would need its own manufacturing and supply relationships rather than riding AMD's existing ones.
Third-order effects
- AMD's 2015 review and Intel's current deliberations bookend the same structural question — whether integrated device manufacturers survive, or the industry consolidates around contracted design firms buying capacity from dedicated fabs.
- If the pattern holds, breakup reviews become the standard response to sustained underperformance at integrated chipmakers, with foundry economics deciding who keeps the factories.
The trend: Integrated semiconductor companies under pressure keep arriving at the same fork — separate design from manufacturing or shrink into it — with AMD's 2015 review an early data point and Intel's foundry losses the current stress test.