AMD out of business by end of year?

[Rudyard]

Was listening to an mp3 off the digg.com website and they went into discussions about AMD which lost 600million dollars in the first quater of this year!!! They basically said they have until the end of the year or they will be gone.

I was under the impression AMD was rapidly gaining ground from intel and thats why intel slashed 10,000 jobs world wide to become profitable again.

I was actually seriously considering an AMD chip in my next PC upgrade (not for a while) but apparently (according to this discussion at digg) intel have the better product now and are forcing AMD to slash prices drastically to sell chips which is adding to their mass loss.

What are the opinions of the computer people around here, is it curtains for AMD??

And what of ATI (didnt they merge?). It worries me as I love the fact that there is a choice for everything in a PC and the competition continues to keep prices low and technology moving on. I would hate an intel only world.

[lacywest]

http://www.buildyourown.org.uk/forums/topic.asp?topic_ID=23473

http://www.crn.com/hardware/199201189

http://news.yahoo.com/s/nm/intel_amd_dc

http://www.gametavern.net/forums/showthread.php?s=9c5337c6c57ab374c7827cc13be5dc99&p=208904

---------------------------------------------------------------------------------------
http://www.tgdaily.com/content/view/31708/118

Sunnyvale (CA) – AMD has wrapped up an extremely rocky quarter and the company used strong vocabulary to tell analysts that the firm's Q1 was a “meltdown” and “not just a miss.” However, the company intends to fix its damaged ship and sail straight through the remaining portion of what the firm calls a "perfect storm."

Many semiconductor companies mention in their disclaimer in quarter conference calls that the “semiconductor industry is generally volatile.” This phrase especially applies to AMD, which was flying high in 14 consecutive quarters, but was brought down to brutal reality in just two quarters - due in part to challenges the company isn’t used to dealing with and in part to competitors that have been gaining lots of traction.

President Dirk Meyer explained that the company experienced a “perfect storm” of challenges in Q1 that resulted in declining shipment numbers and a decrease in average selling prices. The company is still trying to recover from delivery issues in the channel, where many retailers switched to Intel, as AMD neglected smaller customers in Q4 and provided preferred treatment to new and larger customers such as Dell and Lenovo. Pricing pressure remained intense, as Intel “did everything in its power to protect its monopoly,” Meyer said. Delayed products, especially in the GPU segment, declines in the consumer electronics market, as well as a much more complex product portfolio than the company has had in past years added to an already difficult business environment.

AMD did not release any numbers on how dramatic the impact may have been on the basis of its microprocessor market share, other than generally admitting that it has suffered market share losses and that its microprocessor/chipset department lost $321 million during Q1.

However, market research firm iSuppli did a quick analysis of market data and came up with numbers that indicate that AMD’s battle against Intel has been thrown back to Q3 2005. In the overall microprocessor market (including all microprocessors and not just x86 units), AMD’s share is estimated to have dropped to 11.1%, down 4.6 percentage points from 15.7% in the fourth quarter. Rival Intel has gained 4.5 points in the same time frame and is estimated to hold about 80.2% of the market. “We knew Intel had gained share compared to AMD in the first quarter, but the sales gap between the companies widened to a much greater degree than we had expected,” said Dale Ford, vice president, market intelligence services for iSuppli. “The microprocessor market-share disparity between the companies expanded to 69.1 points in the first quarter, up from 60 points in the fourth quarter of 2006.”

How AMD plans to bring back growth

Q1 was catastrophic for AMD. The firm had to swallow a net loss of $611 million, with a $300 million hit on its cash reserves. The company has $1.2 billion left in the bank and considers a level of $600 million as “acceptable minimal level.” There is no doubt that AMD cannot sustain many of these quarters without having to look for external cash. During the Q1 conference call, the company acknowledged the disappointing period and referred to the quarter as “lousy”, “unacceptable”, “a strong setback”, “more than a miss”, “a terrible start into the year”, “a meltdown” and “a collapse”.

CEO Ruiz and Meyer told analysts that the company will go through a restructuring phase that will be overseen by an “executive taskforce”, chaired by Ruiz, and that will be “bigger and more dramatic than the one [AMD] undertook in 2002.” The company “understands the problems” and will “fix the issues” to “put the company back on track,” Meyer said. AMD announced a range of cost cutting programs, including capital expenditures in the amount of $500 million, which include a slow-down of the conversion of Fab 30 from 200 mm to 300 mm wafers. AMD is also considering the sale of real estate and will put a freeze on hiring. The company did not mention layoffs per se, but confirmed that it expects to end Q4 2007 with a lower headcount compared to Q1.

Despite all its problems, the company does not intend to change its overall product strategy. “We are half way there,” said Ruiz. “We are now accelerating our efforts to complete our work and finish the other half.” AMD was hit at the worst possible moment, in a situation where it is most vulnerable from a product and finance perspective. Many of its products are on their weigh out and have a hard time sustaining competitive pressure. On the CPU side, Intel pulls AMD down with its aging Pentium D series, while it leverages the superior Core series to rake in the big bucks. On the GPU side, Nvidia currently has a big lead and cashes in on the fact that the R600 GPU is late. According to Rivet, the AMD’s graphics division lost $35 million in Q1.

On a positive note, AMD believes that Q1 was just about as bad as it can get. Henri Richard, in charge of AMD’s sales and marketing, said that the firm has scored several design wins in Q1, all of which will materialize in Q2 and the second half of the year. Average selling prices of microprocessors apparently are stabilizing and the Opteron replacement “Barcelona” is on its way. AMD said it has shipped pre-production units in Q1, it is shipping production units in Q2 and it expects customers to ship servers with the quad-core processor in Q3. The firm’s mobile business is growing, but Turion has to wait for a succeeding product that can compete with Intel’s upcoming Santa Rosa Core 2 Duos and the 45 nm Penryn chip. A (65 nm) Turion replacement is not expected to arrive until 2008. The transition to 45 nm is also on track, even if AMD is still working on getting its 65 nm processors in volume out into the market: 45 nm AMD processors are promised for the second half of 2008.

For the second quarter of 2007, which typically shows weaker results than Q1, AMD expects its revenues to be about flat with Q1. This forecast raised some eyebrows with analysts, who questioned whether this confidence is really justified, given the firm’s downswing over the past six months. Ruiz answered that AMD should not be “ridiculously conservative.” In fact, the firm believes that it will regain some market share, which, however, should not be so difficult if we realize that the firm has just experienced one of the worst quarters in its history.

While AMD’s current situation looks serious, it is unlikely that there will be any major changes in the firm’s strategic direction. Turning the ship around is too late and would not make a whole lot of sense anyway. With the ATI team on board, AMD in fact looks much better than without it: There are resources that allow the company to design unique and competitive products against an Intel that rarely has been as strong as it is today. Without ATI, AMD would still be a hopelessly out-resourced processor company with a few products that would limit its maneuverability even more.

Despite the critical developments in Q4 and Q1, AMD is far from giving up. At least for now, AMD has still cards to play and Captain Ruiz turns the ship into the wind: “We are not going to change our strategy because of one lousy quarter.”

[TooLFooL]

AMD should invest in advertising. let's face it, a lot of people think the two big manufacturers are "Pentium" and "Celeron"... when i tell them i use AMD they say "huh? oh, is that like an apple or something?!"

[jman98]

Perhaps a year and a half ago or so (I don't remember exactly), AMD was flying high and kicking Intel's butt. In fact, Intel looked like a boxer who was beat up and lying on his back on the canvas with no idea how to stand up. One analyst about a year ago said that Intel had played every card in its hand with their current architecture and AMD still had plenty of cards left, even though Intel appeared at that moment to have a superior offering. This is just to illustrate that AMD and Intel often swap sides in technology where one appears to be light years ahead of the other and the other has to play catch up. At this time, Intel is ahead.

AMD has serious manufacturing problems that they have never been able to solve. They simply don't have the capacity to manufacture on the scale of Intel. This hurts their business as they just can't manufacture enough AMD CPUs to meet demand. This is why Apple chose Intel and not AMD - AMD can't keep up with the demands of Apple and Intel can. This didn't help AMD any.

I would have preferred had AMD bought out nVidia as I'm not an ATI fanboy, but the combined AMD/ATI company may well prove to be a winner in the future, just not in the short term. The idea of combining GPUs and CPUs is very interesting and long term might help AMD quite a bit. I won't be surprised at all if next year AMD releases a CPU that leapfrogs Intel, but I don't see that happening this year. I think AMD will survive. They have good management. Like the original poster, I believe that an Intel only world will not be good for anybody.

[lordsmurf]

Was listening to an mp3 off the digg.com website

This is where I quit reading.

Quality of source? Zero.

[ahhaa]

The wierdest part is these huge swings are based on the gamers lust; most of us would never notice the difference between price-competitive CPUs.

The old Wintel connection is apparent here as well- M$ hasn't done AMD any favors lately.

[Des]

The old Wintel connection is apparent here as well- M$ hasn't done AMD any favors lately.

Unfortunately Apple is also no help as the new MACs are all intel based.

AMD is like the little train that could, only they really can (most of the time).

I wonder if the loss also takes into account their acquisition of ATI, or is that less recent than I think?

Might be a good time to buy AMD stock.

--dES

[SCDVD]

I hope AMD recovers for ONLY one reason. Consumers benefit from the competition between Intel and AMD. If either one of these bastards kills the other, we are all screwed. Forget any fan boy rah-rah about one or the other. Would you prefer to pay $100 or $500 for your next processor? $100? - That's what I thought you would say. Better say a little prayer for AMD then.

[JerryB]

hi,
Well here my 2 cents worth .. smile...

note: the whole thing is like football game....one gets out there in front and then the other side come back roaring.. smiling...

first of all AMD is a big company it will be around for a long time.... pc chips is not there only product!! so like they have in the past they can take some big hits..... so don't listen to the pundit that say AMD is out...smiling....

yes for about 2-3 years amd was taking away market share from Intell... with amd chip being lower cost and better than the pentium 4 in general!! .... and intell was a littl slow getting out there next generation of chips.....

However AMD has a history of not being able put out new chips fast enough and that hurts them..... also they been slow to implement new technology and that hurts them.... and because they been slow that has given time for intell time!!! for there comeback...

and now intell has come back roaring with there next generations of chips.... there able to put out multi core chips faster than amd... AMD still hasn't released thier multicore chips yet..... as far as I know..

intell first mmulti core chip wasn't that great but there core 2 dual is getting fantastic reviiews and comparison test with amds chip... well amd lags behind .. and people i have talk really like core2 duo!! also intell comming out with there core quad chips.... AMD hasn't responded yet then on top of that intell comming with the new centrino chip for laptops..... all AMD says they'll have something soon to compete against that one.... and it will be better.... maybe?

so the big reason for that big lose is intell is putting advanced and better chips than AMD!! ....

It going to take time for AMD to recover lost ground.. but in the past they always have or least maintain what they have.... but amd has it work cut out for it...!!

I totally agree with you.... I like to see competition... you end up with better products and cheaper!!!...

I don't like the idea of ati merging with amd.... with amd having problems I fear that amd will cutback on ati R&D.... and also pull resources away from ati products to concentrate on AMD!! I can see all sorts of problems....

Was listening to an mp3 off the digg.com website and they went into discussions about AMD which lost 600million dollars in the first quater of this year!!! They basically said they have until the end of the year or they will be gone.

I was under the impression AMD was rapidly gaining ground from intel and thats why intel slashed 10,000 jobs world wide to become profitable again.

I was actually seriously considering an AMD chip in my next PC upgrade (not for a while) but apparently (according to this discussion at digg) intel have the better product now and are forcing AMD to slash prices drastically to sell chips which is adding to their mass loss.

What are the opinions of the computer people around here, is it curtains for AMD??

And what of ATI (didnt they merge?). It worries me as I love the fact that there is a choice for everything in a PC and the competition continues to keep prices low and technology moving on. I would hate an intel only world.

[buttzilla]

I think amd should have stayed away from the troubled ATI buyout. ATI was going down hill when they bought it compared to Nvidia. That was to big of a jump for them. They could have used them billions to invest in some new research and advertising.

[rallynavvie]

I hope AMD recovers for ONLY one reason. Consumers benefit from the competition between Intel and AMD. If either one of these bastards kills the other, we are all screwed. Forget any fan boy rah-rah about one or the other. Would you prefer to pay $100 or $500 for your next processor? $100? - That's what I thought you would say. Better say a little prayer for AMD then.

Agreed.

[DereX888]

People, learn how to read statistics - and don't listen to some "digg mp3" LOL

ANyways, AMD's expectations for this year were set so high because they were based on the previous year - which was the ONLY year in their history with such momentum and speed upward. It didnt hurt that they caught Intel with their pants down in the end of 2005 either

AMD is back to normal. Short period of high gain is over.

The only real problem I can see is that AMD's people tasted the better stuff from, and now they don't want to eat leftovers anymore as they used to
Having products more expensive than Intel's (even if they were better) and being market's underdog had to backfire, it lasted that long only because Intel didnt really have anything in that time.

Is "AMD" is synonimous with "best on market"? No.
Back to making cheap K-6-IV


What we as consumers have to worry about is if (actually not "if", but "when") Intel will take the shortcut to eliminate the major competitor and start slashing prices below the costs. AMD can't match Intel's resources and it won't survive half a year of such strategy, and after its gone (or bought 51% by Intel...) the mighty blue will screw us bad in the process of recuperating the losses... Just watch the market, and have some reserve funds ready to jump on Intel stock when it happens (and yes, my paypal acct always gladly accepts any thank-yous, small and big :P )

[RabidDog]

Intel is american Amd is European-ish
Wait for the dragon ball to come screaming up the outside
And the Dalwaddy 33 indo processor

[oldandinthe way]

Thoughout the AMD good times and bad times, Intel continued to run a more sophisticated manufacturing operation with larger wafer size and higher yield. Positioning themselves with tremendous advantages in the event of a price war which occurred.

AMD adopted a strategy of bringing more functions on their chips and purchased ATI with this in mind. They were going to pay for this by continuing market gains by being faster and cheaper than Intel.

Intel used its cost and capital advantage to continue manufacturing advantages reducing the spacing on its chips. Then with those improvement done, they announced their intent to integrate more functions on the chip.

AMDs approach of trying to be faster and cheaper run into the usual problems, companies run into, what happens of you miss being faster and cheaper.

I don;t believe AMD will fold, but I believe there will be new money and new management by the end of the year, and a new strategy.

[Marvingj]

If AMD does nothing by next year watch how IBM buys them out.......

[DereX888]

I don;t believe AMD will fold, but I believe there will be new money and new management by the end of the year, and a new strategy.

exactly - watch for some "AMD K-6-IV" chips for ~$5/ea flooding the market...

[jamescardenas07]

i love intel, but if AMD does go out of business you know how much higher intel will kick their prices up for their processors? it will be so inflated.

[buttzilla]

i love intel, but if AMD does go out of business you know how much higher intel will kick their prices up for their processors? it will be so inflated.

I don't believe that will happen unless there becomes a shortage of them which will probably happen since everyone wull have to buy intel.

[lenti_75]

**** Intel....

[DereX888]

i love intel, but if AMD does go out of business you know how much higher intel will kick their prices up for their processors? it will be so inflated.

I don't believe that will happen unless there becomes a shortage of them which will probably happen since everyone wull have to buy intel.

Do you live on Mars or somewhere further from Earth?
EVERY company, as soon as they have no competitors (aka got monopoly on product or service),
THEY ALWAYS JACK UP THE PRICES!
If you know of even one example of a monopoly not gouging the prices, from any time in the whole mankind history, please let us know!

[buttzilla]

I'm from a planet in a distant galaxy 2 million light years away.

[DereX888]

I'm from a planet in a distant galaxy 2 million light years away.

Save it for the shrink...

[Rudyard]

Thought I would revisit this topic to see how things have progressed and it seems AMD is on its last legs, needing to double its market share and trying to sue intel to get some cash.

I worry about a world where we have a choice of intel or intel and for video cards nvidia and nvideia.

What odds are that AMD (and ATI) can survive and keep things competative?


http://www.pcworld.com/businesscenter/article/145513/amd_must_double_processor_market_...o_survive.html

AMD Must Double Processor Market Share to Survive

Monday, May 05, 2008 7:50 PM PDT

Advanced Micro Devices needs to more than double its share of the microprocessor market to survive, according to a brief filed by the company's lawyers in its antitrust lawsuit against Intel.

At the end of 2007, AMD had 13 percent of the processor market, "less than half of what it requires to operate long-term as a sustainable business," the brief said, explaining that Intel's alleged efforts to shut the company out of the processor business had largely succeeded.

"Measured on a revenue share basis, AMD made little progress growing its slice of the pie," it said.

The argument that Intel's alleged anti-competitive behavior has so hurt AMD that its future is in jeopardy is crucial to the company's claims for relief, including damages. But the claims could further spook corporate customers already wary of the company's financial troubles.

Companies generally make computer purchasing decisions with a long-term view and plan to use and purchase similar systems for many years to come. Fresh concerns about AMD's long-term sustainability coupled with existing worries about the company's fiscal health -- weakened by the delayed release of its Quad-Core Opteron processor and mounting long-term debt-- could lead CIOs to consider computers based on Intel's chips instead.

"It will push them in the other direction," said Rajnish Arora, director of enterprise server and workstation research at IDC Asia-Pacific.

AMD's brief was heavily redacted by the court and details of Intel's alleged anti-competitive behavior and its relationship with major computer makers were largely blacked out. But the general thrust of AMD's argument was clear: Intel allegedly paid computer makers to rely exclusively, or almost exclusively, on its chips.

The effect of these and other alleged tactics employed by Intel outweighed gains that AMD made with its successful line of Opteron server chips, which came out in 2003.

"That AMD gained some share and revenue is immaterial. It gained sufficiently less share and sufficiently less revenue so as to suffer a critical diminishment of its innovation roadmap," the brief said.

AMD's concerns about its future are legitimate, IDC's Arora said, underscoring the capital intensive nature and short product cycles of the processor business. "They are going to be challenged. They need to grow the business and scale it up," he said.

The key for AMD is to generate strong end user demand for its processors, which will in turn mean more computer makers will sell systems based on its chips. "It's all driven by customer demand," Arora said.

[DarrellS]

I think amd should have stayed away from the troubled ATI buyout. ATI was going down hill when they bought it compared to Nvidia.

I'll disagree with this statement. AMD has destroyed ATI and all the loyal ATI users are looking for other options for video capture cards since AMD killed the All-In-Wonder. I chose to stay loyal a little longer by buying a HD 650 today and it was a huge mistake. I used to be able to get support for ATI cards but AMD's support is almost nill. ATI's software was always flakey but it's useless since AMD took over.

AMD's problem was they believed all the hype and thought they were as big as Intel. Now Intel's kicking their A$$ and they're destroying everything they touch. Their website sucks. Knowbody there gives a crap about multimedia users, They're all gamers. Not sure how you're supposed to read the tiny red text on a black background if anyone there did care to give you any help.

Hopefully, Intel will start producing video cards and either force AMD to return ATI to their former glory or put AMD completely out of business.

[FulciLives]

Am I missing something here ???

Been trying to build a new computer ... haven't bought parts yet but I'm close to doing so ... in my research for a new motherboard it seems like all the recent INTEL boards support ATI CROSSFIRE but not Nvidia SLI although you can use a single Nvidia graphics card.

Why ???

I mean if ATI is owned by AMD and AMD and INTEL are obviously competitors in the CPU market then why would INTEL build support for ATI cards like this onto their motherboards. Seems like all or most of the x38/x48 boards have this ATI CROSSFIRE support ???

Don't make sense to me

- John "FulciLives" Coleman

[rallynavvie]

I'll disagree with this statement. AMD has destroyed ATI and all the loyal ATI users are looking for other options for video capture cards since AMD killed the All-In-Wonder.

Good riddance. The AIW VIVO cards have been rubbish for the past 8 years. Everyone was better off with a dedicated capture card like a Hauppauge unit than dealing with the laughable attempt at driver support those cards had. Those users are better off now. What a wonderful world we live in.

@fulci:
You hit the nail on the head. It is absolutely bizarre that so many Intel-branded boards support Crossfire more than they do SLi, and vice-versa for AMD boards. The gap is narrowing though, and Intel chipsets have always had the ability to support SLi even if on non-Intel branded stuff. I wouldn't buy an Intel board anyway, just Intel platforms from Tyan, Supermicro, and maybe Asus.

[filmboss80]

Let's hope AMD has a great liquidation sale on their products. I'm looking to build cheap PCs for my kids.

[Faustus]

I really can't comment on them closing one way or another. Who knows?


I do know that I switched back to Intel CPUs and have nto regretted that decision. Just like I don't regret switching back to nVidia video cards.

They need to stay around though IMO just to keep Intel on their toes.

[K1llUrAzz]

hi,
Well here my 2 cents worth .. smile...

note: the whole thing is like football game....one gets out there in front and then the other side come back roaring.. smiling...

first of all AMD is a big company it will be around for a long time.... pc chips is not there only product!! so like they have in the past they can take some big hits..... so don't listen to the pundit that say AMD is out...smiling....

yes for about 2-3 years amd was taking away market share from Intell... with amd chip being lower cost and better than the pentium 4 in general!! .... and intell was a littl slow getting out there next generation of chips.....

However AMD has a history of not being able put out new chips fast enough and that hurts them..... also they been slow to implement new technology and that hurts them.... and because they been slow that has given time for intell time!!! for there comeback...

and now intell has come back roaring with there next generations of chips.... there able to put out multi core chips faster than amd... AMD still hasn't released thier multicore chips yet..... as far as I know..

intell first mmulti core chip wasn't that great but there core 2 dual is getting fantastic reviiews and comparison test with amds chip... well amd lags behind .. and people i have talk really like core2 duo!! also intell comming out with there core quad chips.... AMD hasn't responded yet then on top of that intell comming with the new centrino chip for laptops..... all AMD says they'll have something soon to compete against that one.... and it will be better.... maybe?

so the big reason for that big lose is intell is putting advanced and better chips than AMD!! ....

It going to take time for AMD to recover lost ground.. but in the past they always have or least maintain what they have.... but amd has it work cut out for it...!!

I totally agree with you.... I like to see competition... you end up with better products and cheaper!!!...

I don't like the idea of ati merging with amd.... with amd having problems I fear that amd will cutback on ati R&D.... and also pull resources away from ati products to concentrate on AMD!! I can see all sorts of problems....

Was listening to an mp3 off the digg.com website and they went into discussions about AMD which lost 600million dollars in the first quater of this year!!! They basically said they have until the end of the year or they will be gone.

I was under the impression AMD was rapidly gaining ground from intel and thats why intel slashed 10,000 jobs world wide to become profitable again.

I was actually seriously considering an AMD chip in my next PC upgrade (not for a while) but apparently (according to this discussion at digg) intel have the better product now and are forcing AMD to slash prices drastically to sell chips which is adding to their mass loss.

What are the opinions of the computer people around here, is it curtains for AMD??

And what of ATI (didnt they merge?). It worries me as I love the fact that there is a choice for everything in a PC and the competition continues to keep prices low and technology moving on. I would hate an intel only world.

all i gotta say is...learn to spell ffs. ty

[Noahtuck]

If you notice, he originally posted this thread over a year ago...

Posted: May 09, 2007 00:03:
AMD out of business by end of year?

Not only did the rest of the year go by, the end of the year came and went... and here we are a year later seeing the OP bringing it up again....

I seriously doubt they will be going anywhere soon... they are not exactly the little mom and pop one off dimestore down on the corner