Chip designer Transmeta said Thursday it lined up Piper Jaffray to help it weigh an unsolicited buyout offer from investor Riley Investment Management.
"Transmeta's board is focused on enhancing shareholder value," Les Crudele, Transmeta chief executive, said in a statement. "As part of that mission, we have been engaged in a process to expand our advisory resources and we are pleased to have Piper Jaffray & Co. join our team."
Last Friday, Transmeta disclosed Riley Investment Management made an unsolicited cash offer of $15.50 per share--a move that built on its previous demands in December to realign its board of directors, according to a Reuters report.
Riley Investment, which holds a 6.6 percent stake in Transmeta, also requested Transmeta complete its evaluation of its offer by this coming Friday. But the chip designer said it does expect to meet that timeline.
Riley's buyout bid, announced before the markets opened on Friday, gave Transmeta shares a minor bump of roughly 3 percent to $13.94 per share that day.
But since the offer was made last week, shares of Transmeta have slipped a bit to $13.89 a share in early morning trading Thursday.
The company received a big bump in late October,
Transmeta has also received a little financial boost from its partners, as well. Last July, Transmeta announced it received a $7.5 million investment from Advanced Micro Devices.
Intel on Monday formally responded to the European Commission's allegations that the chip giant violated antitrust laws by abusing its dominant market position.
In addition to responding to the Commission's "statement of objections" that the antitrust agency filed in July, Intel will also seek an oral hearing on the matter, said Chuck Mulloy, an Intel spokesman.
Once that hearing concludes, the Commission has one of three paths it can take: request more information from the chipmaker, remove the objections, or levy fines and sanctions against the company.
The Commission is under no deadline to choose any path in these types of procedures, said Linda Cain, a spokeswoman for the Commission.
The oral hearing and as Intel's Monday response to the Commission are confidential. However, if the Commission decides to take action against the chip giant, relevant information will be public.
Oral hearings, generally, usually take place about a month after a company files its response to the "statement of objections," Cain said.
The European Commission's concerns over Intel's rebates to its customers have landed the chipmaker in hot water with regulatory agencies in Japan and Korea.
In 2005, Intel reached an agreement with the Japan Fair Trade Commission over a similar case, which centered on its use of rebates to allegedly shut out competitors such as Advanced Micro Devices. And in September, South Korea's Fair Trade Commission also raised concerns over Intel's rebate program.
Advanced Micro Devices said Wednesday it expects in the fourth quarter to take a sizable write-down for the declining value of intangible assets related to its $5.4 billion acquisition of graphics chipmaker ATI Technologies.
AMD, in a Securities and Exchange Commission filing, said it doesn't yet know the exact size of the write-down but expects it to be "material"--or in other words, substantial--when it concludes its review.
The chipmaker said it's planning to write off the value it assigned to the ATI acquisition that was above the actual value of ATI's assets, otherwise known as "goodwill" in accounting jargon. That's because AMD has since found the value of these intangible assets has declined since it recorded the ATI acquisition on its books last year.
"This conclusion was reached based on the results of an updated long-term financial outlook for the businesses of the former ATI Technologies Inc., as part of the company's strategic planning cycle conducted annually during the fourth quarter," AMD said in its SEC filing.
The chipmaker further noted that while it expects the noncash impairment charge will be material, it has not yet determined the amount, or range of amounts, for the impairment charge. Once it does, it expects to issue an update to its SEC filing within four business days.
Two other questions remain, however. What did AMD find in its review of ATI's businesses that has impaired the intangible value of the company it acquired? And how will Wall Street react when the company holds its analyst day Thursday?
Just a few days after one Adobe Photoshop co-architect rained on the 64-bit chip parade, another is trying to rein in expectations for another hardware advance: dual-core processors.
Photoshop co-architect Russell Williams cautioned that multicore processors don't necessarily speed up operations. Recapitulating Adobe's gripe about 64-bit chips, Williams said that memory access performance is a limiting factor that multicore designs don't fix.
"If your system is bandwidth-limited and the operation you want to do involves moving a big chunk of data from here to there while doing a limited number of arithmetic operations on it, adding cores cannot speed it up no matter how clever the software is," Williams said on the blog of John Nack, Adobe's senior Photoshop manager.
"To take good advantage of 8- or 16-core machines, we'll need machines whose bandwidth increases with the number of cores, and we'll need problems that depend on doing relatively large amounts of computation for each byte fetched from main memory."
Intel systems "don't necessarily" add memory bandwidth as they add more cores, and although AMD systems do add memory bandwidth with new processors, it can be difficult ensuring that the right data is stored in the memory next to the right processor, he said.
Multicore chips can help in several circumstances, he said. In editing video, for example, separate frames can be processed on separate cores. And some Photoshop tasks can use Adobe's technology for parallel computation that divvies up tasks across multiple cores.
But many tasks just don't benefit. Arranging text layouts on a page can't be divided into parallel tasks, and Photoshop's healing brush, in which the computer finds mathematical solutions to partial differential equations, also doesn't, he said.
Adobe's software is used by countless professionals for editing images, video and illustrations, and presumably the company has clever programmers and high-end coding tools to optimize its products for the latest high-end hardware. But if Adobe is running into the limits of multicore chips for desktop machines, it doesn't bode well for the average programmer.
Nvidia stock perked up Wednesday on rumors Intel might buy the graphics chip maker to counter rival Advanced Micro Devices' acquisition of ATI Technologies, but Merrill Lynch analyst Joe Osha doubts the idea.
"We think it's wrong to assume that Nvidia must be a potential target for Intel just because AMD is buying ATI Technologies. What AMD wanted out of its deal was a workable platform strategy. Intel has that already," Osha said in a report published Thursday.
Indeed, Intel already has a strong business selling chipsets, the chips that support central processors, that have built-in graphics. However, Intel's integrated graphics aren't up to the demands of top-end graphics tasks such as computer-aided design or video games.
Osha also thinks Intel and Nvidia are poorly aligned when it comes to manufacturing. "Intel's whole manufacturing process is tuned to very high volume and relatively slow product cycles, whereas GPU (graphics processor unit) product cycles are usually quicker," Osha said.
Another factor is Microsoft's Windows Vista operating system, which taxes graphics cards and is likely to spur sales of add-in graphics cards, he said, giving Nvidia a boost and encouraging managers and shareholders to keep the company independent.
Dell has ordered between 1 million and 1.2 million desktop computers with Advanced Micro Devices processors and about 800,000 notebooks, Bank of America financial analyst Sumit Dhanda said in a report Thursday.
The new machines are likely to arrive late in the third quarter or early in the fourth, Dhanda said, citing sources in the manufacturing supply chain in Taiwan. That would mean Dell is awarding AMD 15 percent to 16 percent of its desktop business and 18 percent to 19 percent of its notebook business, he said.
Dell currently has announced plans only for a four-processor server using AMD's Opteron processor, but sources told CNET News.com that the computer maker is expected to announce a broader AMD partnership Thursday that includes more mainstream dual-processor servers as well as desktop and mobile computers.
Dhanda raised his estimates for AMD's financial performance because of the deal. His price target for AMD went from $19 to $23 per share, while his expectation for fourth-quarter revenue rose from $1.38 billion to $1.51 billion.
However, Dhanda believes AMD's profit margins are under pressure because of higher expenses, changes from the plan to acquire graphics chipmaker ATI Technologies, and Intel's new competitiveness.
When Advanced Micro Devices releases its next-generation "Rev F" Opteron processors, expected Aug. 15, it will debut a new model numbering scheme.
Currently, there are three classes of Opterons: the 100 series for single-processor computers, the 200 series for dual-processor models, and the 800 series for machines with four or more. But new model numbers will be larger by an order of magnitude, according to Scott Tease, worldwide product manager for IBM's BladeCenter servers, who spoke after IBM announced a full family of Opteron servers on Tuesday.
That means that when the Rev F models arrive, the 200 series will be replaced by models in the 2000 series and the 800 series will be replaced by the 8000 series. Tease didn't mention any names of lesser Opteron models, not a surprise since the 100 series are rarities in servers that more often use at least two processors.
Toni Sacconaghi, the Sanford C. Bernstein analyst who has for years been unimpressed with Sun Microsystems' attempts to improve its business, awarded the company a more optimistic business rating.
Sacconaghi raised his rating for Sun from "under-perform" to "market perform" in a report Tuesday. Granted, part of the reason was that Sun's stock has slipped well below $4 per share--it closed at $3.82 on Monday--but Sacconaghi also said the upgrade was because of his belief that "positive change is afoot at Sun."
The stock price slip now indicates the market has absorbed the fact that Sun's layoff of 4,000 to 5,000 employees is smaller than some expected, Sacconaghi said. And he believes new Chief Executive Jonathan Schwartz and returned Chief Financial Officer Mike Lehman will be able to "find the right formula of cost cuts and growth to generate notably improved operating margins over the next two-plus years." Sun is the only company on the S&P 500 list to have gross margins above 40 percent but operating margins less than 5 percent for all the last three years, he said.
The analyst also expected investors might come to a more favorable view of the company from two new factors: new AMD Opteron servers announced Tuesday, including a high-end eight-processor machine and a new blade server, and expected solid financial performance for the quarter ended June 30, the last of Sun's fiscal 2006.
Sun Microsystems has released mainstream servers using its UltraSparc T1 "Niagara" processor, but the company plans blade server models this summer specific for the telecommunications market, said David Yen, executive vice president of the scalable systems group in charge of Sparc machines.
Sun began selling a new line of blade servers using the Advanced Telecom Computer Architecture (ATCA) standard earlier this month; the current Netra CP3010 and CP 3020 models use Sun's UltraSparc IIIi or Advanced Micro Devices' Opteron processors, respectively.
"In the summer timeframe, we will release the UltraSparc T1 Niagara blades," Yen said in an interview. Sun's Netra blade servers are available with either Solaris 10 or MontaVista Software's Carrier Grade Edition of Linux.
The company also is seeking business partners that will sell their own Niagara-based telco blades through Sun's newly established OEM business.
Persistent rumors in recent months that Scott McNealy may step down as Sun Microsystems' chief executive returned in force Thursday, as reports of the possibility appeared in the Wall Street Journal and San Francisco Chronicle.
The stories came as computing industry sources reported in recent months that major changes could be in the works at Sun, in particular with the return of Chief Financial Officer Mike Lehman. Lehman has said that he'll reveal and begin a new Sun strategy in July and that he's "taking a fresh look at everything." Some expect deep layoffs.
One former Sun insider has heard Chief Operating Officer Jonathan Schwartz will become CEO, Lehman will take over as COO, and McNealy will remain chairman. Another rumor gives the CEO spot to Lehman. But McNealy, who already has survived several tough years without being ousted by the board, has shown little indication he wants to throw in the towel.
"I'm here for the duration. I'll do whatever I can in whatever capacity I can," McNealy said at an analyst meeting in February. Sun declined to comment.
"Scott still seems very engaged in this company," Sanford C. Bernstein analyst Toni Sacconaghi said earlier this month, but change could take place. Sun's board appears more focused on restoring revenue growth and profitability.
"The question is...how much will Scott be comfortable in terms of cost-cutting and redirection," Sacconaghi said. If there are major cuts and changes, "he may be less comfortable and may choose to move to a less involved role."
