Dirk Meyer, president and CEO of AMD. Credit: Reuters/Steve Marcus
The chipmaker's move to sell its campus, reported earlier by the Austin American-Statesman, comes as the company and its larger rival Intel Corp struggle with slowing personal computer sales.
"There are favorable economic conditions in the part of Austin where the campus is located," Prairie said. "Contingent on finding an investor who wants to do a multiyear lease-back, it's a good opportunity for us to unlock the value of the real estate to fund operations."
AMD's headquarters in Sunnyvale, California, and a building near Toronto were sold and leased back in the past, Prairie said.
The growing popularity of Apple's iPad and other tablets have sapped demand for PCs. With China's economic growth slowing while Europe's economy falters and the U.S. economic recovery is tepid, global shipments are expected to decline slightly this year - the first annual drop since 2001.
AMD, one of Silicon Valley's oldest chipmakers, has been laying off engineers while looking for new markets for its chips as it faces depleting cash reserves.
Earlier on Tuesday, AMD Chief Executive Rory Read told investors at a conference in Scottsdale, Arizona, that results from the U.S. Thanksgiving weekend look encouraging for PC sales although it is too early to make predictions about the entire holiday shopping season, and the PC industry still faces long-term problems.
"We've seen some positive news out of Black Friday over the past several days," Read said. "Our performance over that period looked reasonably well, but I think it's a little early to call the holiday season."
Distant recovery
Sales over the Thanksgiving weekend and the holidays in general are closely watched by investors. U.S. retailers can generate a third of their sales and up to half of their annual profit in November and December.
Read reiterated that he does not expect the PC market, which accounts for about 85 percent of AMD's business, to recover for several quarters.
AMD has hired JPMorgan Chase & Co to explore its options, although an outright sale of the company is not the main option, according to sources.
Like Intel, AMD was caught flat-footed in recent years with the emergence and fast growth of mobile devices.
With the company burning through cash, analysts have become concerned about future liquidity. They say AMD needs to turn its business around sooner rather than later.
Research firm Gimme Credit on Tuesday downgraded its rating on AMD, which has long-term debt and capital lease obligations of about $2 billion, to "deteriorating" from "stable."
"The downturn in the PC market, along with market share losses, have led to substantially lower revenue and margins," Gimme Credit said in its report. "Free cash flow is also decreasing, despite modest capital expenditure requirements."
AMD's cash declined $279 million in the third quarter to $1.48 billion. AMD said it was reducing its "optimal" cash target to $1.1 billion from $1.5 billion due to the business' now smaller size.
Shares of AMD rose 0.5 percent on Tuesday to close at $1.88.