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AMD reportedly hires bank to explore options such as a sale

Reuters reports that AMD has hired J.P. Morgan to consider strategic alternatives such as selling its patent portfolio -- or the entire company. AMD says it's not actively pursuing a sale.

Shara Tibken Former managing editor
Shara Tibken was a managing editor at CNET News, overseeing a team covering tech policy, EU tech, mobile and the digital divide. She previously covered mobile as a senior reporter at CNET and also wrote for Dow Jones Newswires and The Wall Street Journal. Shara is a native Midwesterner who still prefers "pop" over "soda."
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AMD is based in Sunnyvale, Calif. AMD
Struggling chipmaker Advanced Micro Devices has reportedly hired J.P. Morgan to help it explore strategic options -- in other words, to look at possibly breaking up its operations or selling the entire company.

Reuters reported that an outright sale of the company isn't a priority and that AMD may consider selling its patent portfolio.

A person familiar with the situation told CNET that AMD has worked with J.P. Morgan, but it's not considering selling the company.

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An AMD spokesman, meanwhile, said that "AMD is not actively pursuing a sale of the company or significant assets at this time."

"AMD's board and management believe that the strategy the company is currently pursuing to drive long-term growth by leveraging AMD's highly-differentiated technology assets is the right approach to enhance shareholder value," AMD said in a statement.

AMD shares initially soared nearly 20 percent following the news. They eventually closed up 5 percent to $2.09 and slid about 3 percent in after-hours trading.

Even if it's not planning to sell itself, AMD's move to explore its options isn't particularly surprising given the company's recent hardships.

The Sunnyvale, Calif., company, which makes processors for PCs and servers, has been struggling to adapt to the rise of smartphones and tablets. It doesn't currently provide chips for such products, and it has also been squeezed by traditional rivals Intel and Nvidia as the PC market continues to slow.

As a result, AMD has been taking steps to reduce its costs, including laying off a significant portion of its staff, as first reported last month by CNET. It also has been focusing more on its server business, buying start-up SeaMicro and its low-power server business.