A source close to AMD's plans said yesterday that the Intel clonemaker may be broken up when its chief executive retires, splitting into three parts.
According to the senior executive, AMD will be divided into three as CEO Jerry Sanders nears retirement.
The K6 Intel compatible processor, the source said, could well end up in a joint venture with IBM Microelectronics, giving IBM a product to rival the Cyrix Intel clones that National Semiconductor acquired last year. IBM previously had a manufacturing deal with Cyrix.
The profitable networking components business will be spun off as a separate unit. And the third area of operations, logic chips, is likely to be sold to the biggest bidder, with 3Com the favoured candidate.
National Semiconductor, the executive said, is unlikely to get a look in. He believes Sanders is insistent that this does not happen and sees IBM Micro, which shares the same offices in Geneva as AMD Europe, as the natural choice for a partner.
There is a precedent for the networks spin-off, he said, citing Advantis. To maximise shareholder value, the networking unit will continue under the AMD name but operate as an independent company.
The logic unit will be of interest to many Ethernet players, the source believes, particularly because is headed by a group of former Synoptics engineers with huge expertise in this area.
The deal, he said, was likely to happen sooner rather than later. Jerry Sanders is 59 and is understood to want to retire soon.
AMD made no official comment.
The speculation came alongside rumours that AMD would soon sign two new licensees for its K6 processor - Hewlett-Packard and Gateway. Both would use the chip in consumer PCs and this would add significantly to AMD's line-up of first tier partners, which already includes Compaq and IBM.
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