AMD's financial problems

Good read, a bit harsh but real.

http://www.digital-daily.com/editorial/amd_bankrupt/

Or better yet....

Can we give The_Abyss his own forum where only threads which meet his stringent guidelines can be posted?

Seriously man lighten up. Let the mods decide if a thread is appropriate or not. Some of us happen to be watching the AMD financial situation with great interest.

Will Sharikou's head explode if AMD "BKs" in the second quarter of 2008? AMD is bleeding and a bankruptcy looks like a very real possibility.

Yes it is and the point is people seem to think that AMD can go on doing this forever. The chipmaking industry is in a different state in 2007 than where it was before. Much consolidation happening as companies cannot justify investments on their owns in high end fabs. Even Texas Instruments who is a bigger company than AMD is ceasing development in process R&D post 45 nm node for their Logic technologies and relying on foundries. AMD simply cannot go on with their current business model as it is back to losing money. I suspect we will here something about AMD's new strategy within the next 60 days. They promised at Q1 2007 earnings conference call in April as they kicked an executive task force into gear to address their broken business model.

Yes it is and the point is people seem to think that AMD can go on doing this forever. The chipmaking industry is in a different state in 2007 than where it was before. Much consolidation happening as companies cannot justify investments on their owns in high end fabs. Even Texas Instruments who is a bigger company than AMD is ceasing development in process R&D post 45 nm node for their Logic technologies and relying on foundries. AMD simply cannot go on with their current business model as it is back to losing money. I suspect we will here something about AMD's new strategy within the next 60 days. They promised at Q1 2007 earnings conference call in April as they kicked an executive task force into gear to address their broken business model.

I said they should stop lowering prices, but Intel wouldn't let up. Now Intel is planning to make quad core the norm (Q6600 for $266). That will be the worst thing for the whole industry and more so for AMD. Though AMD may be buoyed by ATi sales in the coming quarters, they will still have a margin problem until 90nm is gone from Fab 30 and all GPUs are at least 65nm, with 55nm being the sweet spot for the volume business.

Intel is said to not want to put AMD out but their pricing is saying something else. As the company with the REAL ability to set prices, they flirt dangerously close to illegality by making it nearly impossible for AMD to turn a real profit.

I have also said many times that the industry will buoy AMD as much as possible not because then Intel would have a monopoly but because of the channel infrastructure devoted to AMD products. 20% of a few hundred million PC sales is no small thing.

The article also made the good point of mentioning that respins are a lot cheaper than initial build, so at least Barcelona will eb cheaper to get a new rev, which some report is about to break cover. I guess AMD is smart for going @2P/4P first as the volumes are lower but margins are much higher.

I am of the opinion that they should really try to get the desktop quads out but it may not be financially feasible. From the senior notes it says they got actually $1.2B in addition to the $1B they had and the few hundred million from the restructuring. XMas is the "near drop dead date" for desktop though in some form. Getting a high clocked Kuma out along with lower clocked Agenas would serve them well going into Q108.

The next challenge is taping out Shanghai by Aug. Since it's a shrink it shouldn't take as long to finalize it. Montreal will be a little more as it will require an additional crossbar or DC link.

But in the end, almost everything is riding on a Barcelona September.

Why is this the worst thing for the industry? you're saying competition is bad for the consumer and the industry? providing better performance for your $$ is worse for us? :?

Please indicate the law you refer to.

If this law exists, I have a number of executives at GM, Ford, & Chrysler who would be delighted to talk to regarding their corncerns with Toyota and Honda.

Oh wait.. Toyota and Honda build betters cars than the "Old Three" automakers, and hence people buy them.......

The Courts have essentially ruled that predatory pricing is when you sell below cost. Given the multi-billions a year Intel makes in net profit, the "below cost argument" is a heck of a stretch.

Of course it's worse for us. Intel is literally cutting the legs out from under AMD. If AMD goes under there will be no competition for intel which will slow down the innovation in future CPU's. It would also drastically increase the price of processors since there is no one to compete with. If AMD goes under..We will be seeing highly priced processors as well as the same technology being pushed for years without much advancement. For those that keep saying they love the prices and bash on AMD....Just wait and see what happens if they go under..You won't be happy anymore.

It's currently a really bad situation for AMD..I'm getting a new rig in a few months and was waiting for the x38 and penryn...I'mma wait for barcelona also and pray that AMD can take the performance crown although it seems unlikely. I'd much rather buy an AMD product to sustain the company and keep the Duopoly alive ...lol...

Although I'd like to say I'm no fanboy of either company..I have AMD rigs and intel..Whoever has the top performer gets my cash..I'm just hoping Barcelona can have a little leap over penryn if at all to help keep the company alive >_<.

Of course it's worse for us. Intel is literally cutting the legs out from under AMD. If AMD goes under there will be no competition for intel which will slow down the innovation in future CPU's. It would also drastically increase the price of processors since there is no one to compete with. If AMD goes under..We will be seeing highly priced processors as well as the same technology being pushed for years without much advancement. For those that keep saying they love the prices and bash on AMD....Just wait and see what happens if they go under..You won't be happy anymore.

It's currently a really bad situation for AMD..I'm getting a new rig in a few months and was waiting for the x38 and penryn...I'mma wait for barcelona also and pray that AMD can take the performance crown although it seems unlikely. I'd much rather buy an AMD product to sustain the company and keep the Duopoly alive ...lol...

Although I'd like to say I'm no fanboy of either company..I have AMD rigs and intel..Whoever has the top performer gets my cash..I'm just hoping Barcelona can have a little leap over penryn if at all to help keep the company alive >_<.

Intel is simply executing on its roadmap while AMD is not. AMD has always been a 2nd tier chipmaker and always will be. They had a good run, they're simply falling back to their old habits. Intel dropping prices to make room for newer better products. It is good for the customer to have competition between both suppliers, enough said. AMD going under is not Intel's fault as this is not a charity contest, nor is chipmaking equivalent to making cheese.

Yes it is and the point is people seem to think that AMD can go on doing this forever. The chipmaking industry is in a different state in 2007 than where it was before. Much consolidation happening as companies cannot justify investments on their owns in high end fabs. Even Texas Instruments who is a bigger company than AMD is ceasing development in process R&D post 45 nm node for their Logic technologies and relying on foundries. AMD simply cannot go on with their current business model as it is back to losing money. I suspect we will here something about AMD's new strategy within the next 60 days. They promised at Q1 2007 earnings conference call in April as they kicked an executive task force into gear to address their broken business model.

I said they should stop lowering prices, but Intel wouldn't let up. Now Intel is planning to make quad core the norm (Q6600 for $266). That will be the worst thing for the whole industry and more so for AMD.

Oh I love it, it's terrible that Intel is pushing quad core into the mainstream. You wouldn't be complaining if the situtation was reversed. Let me correct the statement, it's bad for you because you can't buy a "native" quad core (that's been delayed because of s****y yields ) from AMD.

Just incase...For those that say intel processor perform better, give off less heat, take less power, and all that normal jazz....Obviously..They are on 65nm while there are no AMD 65 nm's out. Don't compare Core 2 duo to the X2's...They are 90 nm...Intel has less heat, voltage, etc., because of that fact. They are also ahead of schedule and about to release 45nm which is another slap in AMD's face. Intel has the funds, staff, and fabs compared to AMD...Easier for them to push to smaller dyes unlike AMD. AMD might be behind intel...But at least they have the drive to create a completely new processor which unites 4 cores in a unique way...Even though they are paying dearly for it atm they drive to Innovate...With intels money and staff...The losses to AMD's Athlon and X2 shouldn't of happened...They got extremely lazy. Now they are paying AMD back 10 fold by slashing their legs out from under them and pushing the envelope full force.

After reading that, I'm not going to take you seriously. It's obvious you have no god damn idea.

I also want to add on to what Pausert said, 65nm X2s are slower clock for clock than their 90nm counterparts because of the increase in L2 cache latencies.

As I said, chipmaking is not making cheese. Obviously you have no clue about chip manufacturing otherwise you would recognize that Intel is 1st tier and AMD is 2nd tier when it comes to chip manufacturing. anyone in the industry mentions Intel 1st and then the rest are ranked. This disucssion is centered around AMD financial problems and their inability to survive with the current business model. Intel has a lot more innovations to its credit than AMD, but your blind fanboyism must be stopping you from seeing them. Please don't give me the garbage about native vs MCM quad approach. If you truely understand how Intel actually does it, and what goes into it, you'd realize it is the smarter, more engineering intensive choice and best financial one. If AMD could actually do MCM, they would, their executives admitted so last November. It is a lot more difficult than you think, and makes every business and engineering sense.

Intel decided not do monolithic quads because of bad economics, otherwise Intel could easily manufacture a native quad core. Besides, it will cost Intel lower $$$ per die compared to Barcelona while maintaining similar performance (similiar performance as in MCM vs. native quad cores). It obviously back fired on AMD because now depending on how Barcelona turns out, they might not even be able to turn in a profit! Not to mention terrible yields, scaling issues, performance issues etc etc. Some motherboard partners predicted K10 won't scale to 2.4GHz until Q2'08.

Indeed intel is 1st tier and AMD is a 2nd tier as noted. But may I ask why the need for the bashing? As I stated I have just returned to the technological grounds and have a lot to read up on. The pleasant and responsible thing to do would be to post a link to allow me to read up on the error of my knowledge. Not pointless bash my so called "fanboyism" which doesn't exist. I'm running a 3.2 prescott atm and have no affiliations in terms of being a fanboy to either side. I despise fanboy'ism for the fact that their ranting and ravings hold no substantial facts. If you want to be rude just for the fact of my absence in acquiring all the information I've missed in the past couple of years that's your prerogative. But atleast my past posts contained no malice intent as I'm trying to settle back into the community. I'm attempting to have conversations based on my currently limited knowledge thanks to my absence. Reading up on 2 years worth of information that I've missed is not a easy task. We all have lives and in most cases work that refrain us from indulging solely in our hobbies.

amd needs def some time to reorganise, through the acquisition of ati (which probably wasnt the best step to take atm).
speaking of a collapse, of amd, is at my oppinion wrong. it wont happen, amd has a solid financial base and their investments are covered.
the concept of integrating gpu into cpu is the future, if u look how computer sales are evolving (laps up, desk down, servers up) the consumer will always be in need of a power saving, cheep, portabel system, which is exactly what amd will be offering in two years.
in the meantime they really should spend some extra time, to think how they could stand, the soon complete, intel domination in server market.

greetings!

AMD is being 'innovative' because they HAVE to be. They simply cannot be clones of Intel CPUs like they were back in the 80s and early 90s. They need something to set themselves apart from Intel, something unique that Intel doesn't offer.

Being the underdog, AMD simply has to have alternative ideas and 'better' concepts in order to earn somebodies hard earned $$$.

Their problem, as everyone probably already knows, is their execution, which has been terrible lately. You almost EXPECT them to miss deadlines. With their current situation I actually thought AMD would get things right for once and launch K10 on time, but alas, same old same old AMD...

As for Barons ridiculous statements about illegality, would AMD be in such a predicament if they actually had a part that was competitive with C2D/C2Q? Would the X2 6000+ be going for $230 if it could match the X6800 in performance? Of course not. When AMD's flagship can only compete with Intel's midrange, of course they are going to struggle financially. Any accusation that Intel is using predatory pricing is absurd considering they are still getting >50% margins and making >$1B quaterly profits.

AMD is simply behind the curve, both technologically and financially. Unfortunately, in the world we live in, when you're down, you don't get a helping hand from the competition. Sorry if that is 'immoral' or 'unethical' but that is the way the corporate world works.

Excellent post. See, this is the whole trouble. AMD has designed a core that won't be cheap to manufacture - simply can't be because of low wafer yield. If Barcy doesn't demolish Penryn, if say its performance is only "competitive" with Intel's 45nm quads, AMD is still in trouble because they will have to compete with Intel in terms of pricing. That's what they've been doing even since Core 2 started to gain traction, and they've been gushing cash ever since.

AMD is in a horribly tough spot. Because of inferior process technology, they actually need better performing product just to remain competitive. No performance edge = no premium = low gross margin = AMD boned. Being AMD is like being baseball pitcher on an really really poor offensive team. You have to be nearly perfect on every pitch just to get a win, cause your offense never gives you any kind of a cushion. Being Intel is like being a pitcher on the Yankees. You can screw up and still get a win. Not an equal playing field at all.

Sorry, I must respectfully disagree with you. The chances are slim, but they are nowhere near zero. What IS "basically zero", is the chance that ANY investor or company will continue to pour money into a company that is not generating profit or it unlikely to do so in the future. They may be into AMD for several billion dollars, but just watch how fast they'll cut and run!

One big difference though. AMD is a US company. While I can easily imagine Germany and/or the EU pouring cash into a German or European company to keep it afloat, it's more difficult to see them subsizding an American company in this way.

Let's break this down

The problem with Intel is in antitrust. No one is saying they are selling their new CPUs below cost. Were it not for their business attitude, I'd have gone C2D, but I decided to go X2 Windsor instead to support AMD while hoping that AMD quad core on the desktop will turn out to be the equal of Intel's flagship.


Intel's not a monopoly and they are playing by the rules. What in that says antitrust?

I hope your satisfied with your lower performing X2 chip. Regardless of your reasons, you have chosen a worse chip simply due to who makes it. That's the definition of fanboy. Not sure if you're trying to portray yourself as such, but you have just logically laid out that you are in fact an AMD fanboy.

Remember first that moving to entirely new platforms takes a VERY long time. As a huge corporation, you don't instantly change your entire product line (no one big is that mobile). AMD's leads (which at times were really in name only and didn't justify moving architecture) were short lived time wise. Many customers waited for a product like Core 2 Duo to arrive and it did. They just delayed their refresh cycle.

People still bought Netburst because they still worked well. It's still an Intel chip. It will still last for far longer than you'd want to wait before upgrading it. It still lets you play games and surf the Internet. Intel has one of the top ten brands in the world. You don't lose that with one mediocre product generation.

Clearly you haven't used a Core 2 based system. It's pretty evident where the speed gains are.

Intel lost MSS during Netburst. It gained most of it back with Core 2 Duo. Intel's probably pretty satisfied with anything over 80% as gaining more falls into the land of diminishing returns and puts them more into the scope of a monopoly.

With one large player and one small player, you have a nice and dynamic system. You actually get more stagnation with two heavy-weights in most industries. Now, with the idea that CPUs are becoming more of a commodity, then the MSS split will naturally gravitate towards a 50/50 split (unless AMD is severly broken over the next few quarters), but not because AMD's doing anything well...it's just that the differences will start shrinking.

Almost all companies straddle ethical limits and sometimes legal limits (AMD is far from ethical). Intel has a competitor, Microsoft really doesn't (Linux still is extremely far from a realistic competitor and Apple has remained a niche product for people with over-developed egos and those that don't know a mouse from a keyboard). In fact, Microsoft's biggest competitor right now is themself - Vista has lost bang due to XP still being viable.

Intel has to fight constantly with AMD for MSS. Microsoft can delay their new product, deliver a release still in need of some work, and still sell quite a bit. Apples and Oranges here.

if amd spent less time talking smack about how great they were for makeing a native quad core and how stupid Intel was for going mcm they could of sucked it up and made 65nm quad k8's

Imagen how the server world would like a quad low voltage k8 @1.6-2.2 @45-65 watts

The problem with Intel is in antitrust. No one is saying they are selling their new CPUs below cost. Were it not for their business attitude, I'd have gone C2D, but I decided to go X2 Windsor instead to support AMD while hoping that AMD quad core on the desktop will turn out to be the equal of Intel's flagship.


Intel's not a monopoly and they are playing by the rules. What in that says antitrust?

I hope your satisfied with your lower performing X2 chip. Regardless of your reasons, you have chosen a worse chip simply due to who makes it. That's the definition of fanboy. Not sure if you're trying to portray yourself as such, but you have just logically laid out that you are in fact an AMD fanboy.

Remember first that moving to entirely new platforms takes a VERY long time. As a huge corporation, you don't instantly change your entire product line (no one big is that mobile). AMD's leads (which at times were really in name only and didn't justify moving architecture) were short lived time wise. Many customers waited for a product like Core 2 Duo to arrive and it did. They just delayed their refresh cycle.

People still bought Netburst because they still worked well. It's still an Intel chip. It will still last for far longer than you'd want to wait before upgrading it. It still lets you play games and surf the Internet. Intel has one of the top ten brands in the world. You don't lose that with one mediocre product generation.

Clearly you haven't used a Core 2 based system. It's pretty evident where the speed gains are.

Intel lost MSS during Netburst. It gained most of it back with Core 2 Duo. Intel's probably pretty satisfied with anything over 80% as gaining more falls into the land of diminishing returns and puts them more into the scope of a monopoly.

With one large player and one small player, you have a nice and dynamic system. You actually get more stagnation with two heavy-weights in most industries. Now, with the idea that CPUs are becoming more of a commodity, then the MSS split will naturally gravitate towards a 50/50 split (unless AMD is severly broken over the next few quarters), but not because AMD's doing anything well...it's just that the differences will start shrinking.

Almost all companies straddle ethical limits and sometimes legal limits (AMD is far from ethical). Intel has a competitor, Microsoft really doesn't (Linux still is extremely far from a realistic competitor and Apple has remained a niche product for people with over-developed egos and those that don't know a mouse from a keyboard). In fact, Microsoft's biggest competitor right now is themself - Vista has lost bang due to XP still being viable.

Intel has to fight constantly with AMD for MSS. Microsoft can delay their new product, deliver a release still in need of some work, and still sell quite a bit. Apples and Oranges here.


hey wolverinero79" i am planing to buy a x2 soon am i a fanboy too?

How could you?! Clearly, you are an AMD fanboy on the same level as Sharikou!

Just kidding. The current level of competition is great. What you can get for your money is truly amazing. A year ago an Athlon X2 3800+ was $300. Today you can get an E6600 or 6000+ and have $80 change. End of next month you'll get quad core performance with change for the same $300. But in order for this to continue AMD has to raise the bar again with K10. I only wish Nvidia had some true competition in the ultra high end graphics market (GTX, Ultra) then we wouldn't see the Ultra introduced at the ridiculously high price of $829.

Depends on the why, Bats. Yipsl basically said that the reason he is buying a chip is because it says AMD on it - not because of the cost, not because of the performance, but because it's "not Intel". If you have a specific price point you're trying to acheive, or your upgrading a current AMD system that allows a better chip via a simple drop in with no other upgrades, of course you're not a fanboy. But if you're doing it simply because you like AMD better (or dislike Intel), rather than considering the product, you are a fanboy.

Fair enough.