AMD has posted its Q2 2015 financial results. The company reported revenue of $942 million and an operating loss of $137 million. Gross margins dropped 10% year-on-year, and the company lost 23 cents per share. Here are the company's GAAP results, in tabular form:
| Q2 2015 | Q2 2014 | Change | |
|---|---|---|---|
| Revenue | $942 million | $1.44 billion | down $449 million |
| Operating income | -$137 million | $63 million | down $200 million |
| Net income | -$181 million | -$36 million | down $145 million |
| Earnings per share | -$0.23 | -$0.05 | down $0.18 |
| Gross margin | 25% | 35% | down 10 points |
AMD pointed to weaker-than-expected consumer PC demand as one of the primary reasons for the revenue drop, which impacted APU sales to OEMs, and attributed the year-on-year change to decreased sales overall. The company also took a $33 million charge from transitioning some products targeted at the 20 nm process to FinFET, which negatively affected gross margin.
Computing and Graphics revenue was down 54% from this time last year, again due to lower-than-expected sales. The division posted an operating loss of $147 million, compared to a $6 million loss in the same quarter last year. However, AMD reports that the graphics segment's average selling price has been steadily increasing.
The Enterprise, Embedded, and Semi-Custom business didn't fare much better. Despite a sequential revenue increase of 13%, it still suffered an 8% year-on-year decline due to lower server sales and lower non-recurring engineering revenue. Operating income was $27 million, compared to $97 million in Q2 2014, with the drop attributed both to lower sales and to the $33 million process transition charge.
In its report, AMD highlighted its plan for a multi-year strategic drive to profitability, the upcoming Zen architecture, HBM-enabled GPUs, and the launch of its Carrizo APUs as bright spots. For Q3 2015, the company expects a six-percent sequential increase in revenue, plus or minus three percent.
It’s just been so sad watching AMD slowly die. Even we Die Hard fans are starting to lose hope. But in the meantime I’ll still build AMD systems for casual / business users. For 90% of users & paired with an SSD even the dual core APU’s are snappy and more than enough computing for everyday users. Recently I thought about upgrading my parents from the A4-3400 to, well, anything maybe. Especially with Windows 10 on the horizon and they are still on 7. But to be perfectly honest, that little machine showed know signs of sluggishness whatsoever. Paired with a Samsung 840 120GB ssd & 6GB of Ram it’s more than enough for them. I’ll probably just let it ride until it dies or somehow they catch a virus. Which my father has litterally never done mind you! I trained him well lol
Anyway, AMD CPU’s are just fine for everyday users. They just are. (minus that E & C Series crap) I’ll stick with my 8350 for now as it continues to be the best value for my needs.
They work fine, for sure, but in the CPU business, as in any business, performance is relative. And if you fall behind in the benchmarks, you need to price accordingly. That kills your bottom line.
No “One-Time Charges?”
I’m insulted.
I see a lot of comments stating that AMD should design better products and they’d be fine and that Zen needs to beat Intel’s CPUs to have an impact.
The problem is, that AMD doesn’t have the money to develop more or better products. It wouldn’t be very difficult to create a full lineup based on GCN 1.2. But it costs money, so they decided to rebrand most of their products instead.
Intel can probably spend 10x as much on their CPU cores and Nvidia can still spend 2-3x as much on their video cards and drivers. It’s impressive that AMD kept up this long, but I don’t see how they can catch up without additional funding.
Zen can still be a good product for AMD if it does not match the Core product line, yet it must also be cheaper to design and cheaper to produce to get good margins. One of the biggest problems with Bulldozer is that it’s not only worse on perf, but also on perf/W and more importantly for budget products: perf/mm.
At the back of my mind, I’m kinda expecting AMD to can K12 later on and put all its weight behind Zen. x86 is a tried-and-tested market. ARM is a market other players who don’t have an x86 license WISH would take off and make a lot of noise about, but things just aren’t happening fast enough to make one think it’s a serious challenger to x86 dominance. Unless ARM servers present very strong incentives to corporate customers (i.e. much better performance, much better energy efficiency and comparable TCO) that compel them to ditch their huge investments in x86, there just isn’t any way ARM will take off in any meaningful manner. This applies now as it will 10 years down the road. AMD knows this too, that’s why they delayed K12 and probably retasked those engineers to Zen work. As I said, I kinda expect K12 to get ditched.
Yet another [i<]doom and gloom[/i<] financial result. Regardless of the work AMD has done, there are very few new products to show for it: 2013 - Hawaii. 2014 - Tonga, but as fas as consumers are concerned its just a remake of 2011's Tahiti 2015 - Fiji, if you can find one, and if you want one, given that most GTX970's can match it with the easiest overclock known to man. On the CPU front, AMD have been flogging the Bulldozer/Piledriver/Steamroller/Excavator into the ground with catastrophic consequences. The architecture is a total failure and shouldn't have been pushed forward - work on Piledriver should have been work on Zen.
Like the article quotes from AMD’s press release, the PC market is getting slower and slower in terms of “upgrade” and AMD has yet to show anything from the “Zen” initiative, so the numbers will be in the red for a while until they can manage to get a decent server part and there’s some sort of shift in the market trend (smartphones are slowing down, just like tablets).
Also, I really don’t know if Win10 will help or not, but it must make some sort of (positive) impact into AMD’s financials somehow… Specially with the push Microsoft is trying to accomplish making people upgrade to it.
Cheers!
Well, another problem is that the market is definitely moving away from products AMD makes, and towards a market AMD isn’t very strong at – power efficiency!
Five years ago it was laptops and desktops and docking stations
Now it’s smartphones, tablets and ultraportables.
When you’ve used a sub-2lb ultraportable with an 8W CoreM, and run demanding games on it, you have to wonder what all the other products are actually for!
[quote<]On the CPU front, AMD have been flogging the Bulldozer/Piledriver/Steamroller/Excavator into the ground with catastrophic consequences. The architecture is a total failure and shouldn't have been pushed forward - work on Piledriver should have been work on Zen.[/quote<] If you were barely informed you would know that they have done just this. The main CPU design team has been busy with Zen and K12 for several years while other secondary teams have been tasked with putting a bit of lipstick on Bulldozer. Zen is fully designed already and probably already has taped out but the fabs are not ready yet for volume production.
Well yeah, Zen is Jim Keller’s baby – work started on it in 2012 but AMD wasted a deluded year thinking that Piledriver could be fixed and patched enough to survive until the magical era of parellelism made core count more important than IPC.
Even today new programs and games are bottlenecked by the performance of one single thread. IPC should have been the focus immediately, and it’s what all the wasted on Piledriver was about before Zen was started.
The fact Piledriver was the last desktop CPU product confirms the secondary “lipstick team” for APUs and mobile, but I’m disputing that first year which would put Zen on track for a release around now, rather than this time next year.
AMD is analogous to the emperor who was already naked but kept thinking he’s still wearing his majestic robe.
Then by the time he realized his nudity, he already lost his crown.
AMD, your products work fine. They really do. But to make money making products that work isn’t enough. You need to make THE BEST products at the BEST prices. All cars can take you from Point A to Point B, but some cars sell far better than many others. Guess why.
I’d buy Zen if it is competitive on price/performance (and single-thread performance in particular). For me personally, it doesn’t need to kick butt; it just needs to be decent. Unfortunately, if AMD wants to stop their downward slide, being merely “decent” isn’t going to be enough. Furthermore, history makes me very skeptical that they will be able to execute on schedule. So yeah… unless they manage to pull a rabbit out of the hat (which could happen, but it’s a long shot!) they’re toast.
Another potential problem I see looming is that given AMD’s fade from prominence, motherboard makers probably aren’t going to prioritize the new platform. This may limit the motherboard choices at Zen’s launch.
As an aside, as I’m reading your comments on this article it seems that you’re rather bitter. I think maybe you have (or had…) just a little too much emotional investment in the supplier of your CPUs. You’re coming across like a jilted lover; it’s time to let go. 😉
Zen needs to be better if AMD wants to somehow be less dictated to by Intel’s price levels. A little bit more performance over your competitor could mean a much higher price.
As an aside too, while I may come across as bitter, I’m merely airing out my sentiments on what AMD has been coming short on, and what they NEED to do or put out in order to right their ship. The future of x86’s viability as an affordable platform depends in no small part on AMD’s financial performance and long term competitiveness, after all, and what I’ve been saying here are pretty much what many folks here echo: AMD’s in bad shape and they need to shape up.
If AMD could make the best products and price them at the best prices, they wouldn’t be losing $180 million per quarter.
Also, products don’t have to be the best value to move units. Apple has built an empire on selling decent products with inflated intangibles.
AMD doesn’t have the resources to produce the BEST products in each arena; they’ll have to focus their efforts and find useful niches. Those niches may not included consumer CPUs or GPUs. We will see.
“Also, products don’t have to be the best value to move units. Apple has built an empire on selling decent products with inflated intangibles.”
Well, Apple is an exception. What I said still applies to most companies that don’t have their own RDF.
Nintendo’s Wii U replacement, the NX, is rumoured to have a AMD CPU. Presumably it will also have a AMD/ATI GPU as their last three consoles have done.
While its better than nothing, AMD doesn’t make nearly as much margin on the licensed IP of console chips as they do on consumer/enterprise CPUs/GPUs.
They’re OK with razor thin margins that’s why they were able to bag all three consoles. The fact that they’re in no position to be picky means they need to grab any opportunity to earn a few cents to help float their boat. Companies like Intel and Nvidia that have fortunes in the bank just don’t bother with those kinds of profits. When you’re rich, you can be as picky as you want.
I’m not sure that the six units of Wii U2 that Nintendo sells will help AMD’s bottom line…
Except, part on the announcement of this console is that it wasn’t to be the Nintendo WiiU2.
The question is if it will be another Gamecube, or another Wii.
I wouldn’t worry too much about the brand just yet. Intel needs them around to support their position in periodic antitrust investigations. At least until the overall computing market gets recategorized according to broader classes of rival CPU IP. Keeping staffing up and reinvestment at viable levels is another thing though.
prediction:
AMD dies. Apple buys it’s GPU IP and MS/Qualcomm buys the rest split in some way(s).
Apple may buy the x86 patents as being able to design their own processors that keep backwards compatibility.
Where Sony and Microsoft and Nintendo all have some deals where they continue to be able to fab everything.
2ndary prediction:
AMD barely survives until 2019-2020. Proceeds to sell off everything buy their non-x86 CPU patents and GPU IP.
[quote<]Apple may buy the x86 patents as being able to design their own processors that keep backwards compatibility.[/quote<] Extremely unlikely. The golden child of their cpu patents expire in less than 2 years.
And all the patents that are required to make a 64b x86 CPU that’s compatible with modern programs?
I don’t follow patents to much, but, you’re talking about x86 base, right? Or is this everything involving x86?
Short version, Intel owns x86, everyone else licenses from them. must be renegotiated from time to time to avoid the DOJ.
Bigger issue is the legality of transferring the x86 license in a sale and the YEARS of lawsuits that would bar production until settled. by the time the chain of lawsuits would be settled AMD’s old rights would be expired.
besides … much as everyone dislikes it… except for top of the line Apple workstations Apple WILL replace all cpu holdings with their custom ARM cores eventually to further reduce outer hardware source dependencies. (years to go)
Most of Intel’s x86 patents have long been expired. It’s their continued development in extension sets that AMD has to licence. The only thing AMD has left with any life for a few years is the SSE4a instruction set which can easily be dropped as hardly anything even uses them.
The only patent that AMD has that has some years left is SSE4a and that can easily be dropped since nothing really uses it.
[quote<]Extremely unlikely. The golden child of their cpu patents expire in less than 2 years.[/quote<] And basically all of them are non-transferable. If AMD goes down, their claim on the x86 patents which were appropriated during an anti-trust settlement and not purchased or owned, go poof.
“AMD pointed to weaker-than-expected consumer PC demand as one of the primary reasons for the revenue drop”
that makes no sense. who would buy new systems with antique processors… unless they think that there’s a massive market for them. there’s always the upgrade to a massive i3 powerhouse when their APUs just dont cut it.
APU’s outperform the i3. You can 4ghz the APU on air and $20 arctic fan, all day, 99/100, for $200.
And then you aren’t subsidizing a bully, and are forcing them to drop their pants again at the next (skipped) tock.
Bankruptcy would be a mercy for AMD. They need to get much leaner and more focused to become viable, and their present commitments (*cough* GF WSA *cough*) really get in the way of the radical changes and sacrifices that would entail.
But they’re not really bankrupt, nor will they be for a while, so I guess the soap opera continues. Provided the economy doesn’t tank, that is… THAT would speed things along!
They could make the best video card in the world but if they don’t staff up their driver support Nvidia will keep getting an edge… PC gaming is going to move like a glacier if it is left in the hands of only Intel and Nvidia…
Actually – it’s the consoles that are holding PC gaming back. AAA games needs to run on all three platforms. Just see the whole Witcher 3 graphics debacle.
And game companies want to have the shiniest games on the market, and nvidia wants to sell the cards to drive those games. So I think that works out, that’s a natural feedback loop.
I’m more worried about escalating prices for gpu’s and cpu’s, without any competition nvidia pricing could get ugly.
About the cpu.. I’m not so worried. We haven’t been cpu limited in a long time.
And Intel seems to be content competing with itself – price for a particular performance is actually coming down a bit every year, save for the -K parts I think.
I don’t think consoles are holding PC games back that much at the moment. Running a game at 1080p 60fps isn’t quite 4x as demanding as 720p 30fps, but it’s close. As it is, Witcher 3 requires a 970 to run at high detail, 1080p, 60fps. For 1440, you’ll need a 980 Ti (or go down to 30fps, the game does not scale well at lower detail settings). That sounds like good use of current PC performance, in fact they probably aimed a bit high. If you bought a 770 last year, you’ll be playing medium detail and dropping below 60fps a lot of the time anyway.
Please don’t die, AMD. D:
If you’ve got a direct line to AMD, maybe you ought to ask them to make some truly competitive products at competitive pricing and soon.
You don’t call a dying person and tell them not to die; you call the ambulance to get that person to the ER asap.
Every time AMD releases their quarterly numbers and TR reports on them, it’s always the same ol’ comments. And why not? It’s always either AMD makes a few pennies or losses a bajillion or two.
You forgot all the writing off their losses as “one-time charges.”
That’s included in the ‘losses a few bajillion or two’ part.
Yeah, but lots of companies lose bajillions or two. How many of them do one time charges like they’re going out of style and then act as though they never did the last set?
Microsoft is the other major company I see doing it all the time.
But when talking about AMD, one-time charges are so common that it’s getting repetitive stating them. I just state the bottom line: they lost loads of money this quarter. Period.
Microsoft has also insane number of acquisitions… (also is not in red)
Yeah, a “one time charge” from buying 5 companies (domestically) this year, is not the same as a “one time charge” for a debt repayment on 2bn dollars in debt…
Regardless of your preference of cpu or gpu, this is not good news. We need competition for Intel and Nvidia. Without AMD, they can charge pretty much whatever they want and take as long as they like to release new models.
This argument gets even more ridiculous every time anyone mentions it…
Fine, we need competition, but AMD cannot provide it. What do you expect ? Charity from other companies so that AMD can better compete ? Stop protecting incompetence and demand actually good products and good execution as competition. AMD is in this situation due to problems they’ve caused for themselves. No one else is to blame but them. They just released an entire GPU line where except for the ultra high-end everything is a rebrand of very old tech…is this what you wants as “competition” ?
Once there were Intel … and AMD … and Cyrix …. and Motorola … and Zylog … and ….
… Nexgen, IDT, Texas Instruments, IBM, SGS Thomson, UMC, Harris, NEC, Toshiba…
And it’s Zilog, not Zylog.
Sigh. Here we go again.
Not true. Nor Intel nor NVidia can charge anything they want. The higher price the fewer sol products and thus less income – we are not talking about required thins and one can stil get nice CPPUs and GPUs from second hand and thus avoid bad prices. Monopoly means perfect/ideal pricing not any sky-high pricing.
And Intel already has it. Presence or absence of AMD won’t change that and Nvidia is getting close to that too. Competition already “failed”…
I’m confident that if AMD had competing products we’d be paying ~$25-50 less for gpu/cpu’s on average. Intel is only going to further their lead with all the R+D they can afford being so dominant.
Nope. Check what happened last time AMD had superior products. Lower prices weren’t among the effects we saw. (Not from AMD anyway…)
exactly
i keep bringing up the prices of when amd had superior cpu’s because people seem to keep forgetting about them
they diddnt bring the prices down at all – they just joined the competition at charging high prices
[url<]https://techreport.com/review/8295/amd-athlon-64-x2-processors[/url<] Athlon 64 X2 4200+ 2.2GHz 512KB $537 Athlon 64 X2 4400+ 2.2GHz 1024KB $581 Athlon 64 X2 4600+ 2.4GHz 512KB $803 Athlon 64 X2 4800+ 2.4GHz 1024KB $1001 [url<]http://www.cpu-world.com/CPUs/K8/AMD-Athlon%2064%20FX-55%20-%20ADAFX55DEI5AS%20%28ADAFX55ASBOX%29.html[/url<] Athlon FX-55 Price at introduction $827 [url<]http://www.cpu-world.com/CPUs/K7/AMD-Athlon%201000%20-%20AMD-K7100MNR53B%20A.html[/url<] Athlon 1Ghz Price at introduction $1299 also ati gpu's radeon 9800xt $500 [url<]https://techreport.com/review/5712/ati-radeon-9800-xt-graphics-card[/url<] [quote<]ATI's brand-new Radeon 9800 XT, a bright red, five-hundred-dollar graphics card with eight pixel pipelines[/quote<] that was 2002 - back then $500 was worth a lot more than $500 now
What I’ve been saying too. Strong products will only allow AMD to play upmarket. Why spend more money to design better products just to earn even less money?
yep and thats exactly what amd needs
prices for high end products wont change if amd has some top gear – it will just allow amd to actually make some money which is a good thing
Intel is only competing with Intel. AMD could go “poof” and it wouldn’t move the needle on Intel’s offerings.
Yup. After a long period of volatility Intel has finally figured out the price points the market wants, and has products on every one of those. Each cycle they replace the old with newer stuff, but the price points themselves hardly change anymore.
Since AMD cannot compete on Capacity or capital there is no ”competition’ … just a reason the DOJ can’t force Intel to split into a gpu and cpu business …
Why would the DOJ do that? If anything, the DOJ would force intel to give up their x86 patents to the world at large… which, imo, I think might be warranted anyway.
If I had a dollar every time someone said that here on the TR comments section, I’d be able to buy an Intel i7.
Nvidia and intel can both obviously charge “whatever they want” with or without AMD.
I’ve always had an affinity for AMD CPUs (I have my own Task Manager) but I’m slowly warming up to the idea that my next CPU will be from Intel.
Even cats only have 9 lives.
Unless Zen surprises, my FX-8350 will be my last AMD desktop CPU. Been running them since the 200MHz K6.
Matching whatever Intel will have by that time isn’t enough; AMD has to deliver a markedly BETTER product. Guess how difficult that would be for a plucky little company with almost no money and a ton of debt that’s up against the No. 1 semiconductor company with oceans of cash (OK, a ton of debt too but they have WAY MORE cash than debt). AMD really needs Intel to totally fudge up to make Zen look good. But who knows, even the stars align every bajillion years…
The stars aligned 10 or so years ago when the Pentium Killer that was Athlon and the marvel that was Athlon64 came out, and Intel fudged up to make the Pentium 4.
If so, we have another bajillion years to go……
If AMD can release something equal in performance to an upper tier i5 at 90% of the price, I’d buy it.
Except they’d have to price it below Intel’s competing product. Good for us short term, not good for their survival and us long term.
Stars are always aligned.
Its our perspective that changes. Think about that!
I was in the same boat as you, though though I actually made the decision to switch back when the original Phenom flopped. Bulldozer just confirmed to me that AMD had lost the plot, they made the same mistakes Intel made with the Pentium 4.
So unless Zen is BETTER than anything Intel makes, my now replaced Athlon64 X2, plus an E350 I have lying around, which I replaced with a second hand Core 2 Duo, will be my last AMD CPUs, after what was at the time an unbroken run since the 166MHz K6.
My very [b<]first[/b<] CPU was an AMD too: [url<]http://justbrewit.net/trstuff/amdcpu.jpg[/url<] (that's AMD's 8-bit Intel 8080A compatible CPU, circa late 1970s). 😉 There were several Intel CPUs in between that and my first K6 though, so it isn't an [b<]unbroken[/b<] run...
Like you, I have ran AMD processors on the desktop for a long long time (last one is as well a FX-8350). I doubt I will go to Zen next round however even if it is as good as intels offerings. What I have been EXTREMELY disappointed in AMD for over the last 5 years is that their chipset development has grinded to a snails pace. Maintaining backwards socket compatibility is fine and all but being stuck with a chipset feature set that is 5 years old sucks.
Intel’s upgrade track has made the platform as interesting or sometimes even more interesting than the CPUs that go in. If Intel can actually find a way to do the integration of Thunderbolt with USB 3.1 in a semi-sane way, that alone will make me think about upgrading in 2016 – 2017 even though the actual CPU power won’t be massively higher.
At one time AMD’s platform development was interesting as well. Still waiting on that 1090FX chipset. 😛
Yup, chipset development is definitely a weak spot for them too. And I’m sure the motherboard vendors just love having to graft all sorts of extra 3rd party chips onto their designs, instead of letting the main chipset deal with all the peripherals.
I agree with their CPU chipsets, however their APU chipsets are further along, and apparently Zen will be based on the APU chipsets.
[url<]http://cdn2.wccftech.com/wp-content/uploads/2015/04/desktop.jpg[/url<] [url<]http://media.bestofmicro.com/7/V/425371/original/A88X-BLOCK.PNG[/url<] needs usb 3.1 among other updates, but still ahead of the 990/950 chipsets
The first PC I built myself had an Athlon Thunderbird, and I stuck with with them all the way to K10. When it came to upgrade last year, I ended up with a Haswell. I tried really hard to justify going with an AMD chip, and even from a budget perspective I just couldn’t. They weren’t even close.
AMD stock is now at its lowest level since winter 2013. However – the interesting thing about having a low market evaluation is that it increases the likelihood of a buyout.
If you believe that Zen will be a success this would be an excellent time for a larger investor to come on-board, supply the final R&D budget for Zen and then count your earnings in 1-2 years.
But a lot hinges on Zen, if the chip fails I believe a lot of long-term investors (stock owners) will pull out. That would likely spell the end of AMD as we know it today.
The problem with wishing on a star for that miracle investor is no investor is just going to sign up for a return on their shares. AMD has been wishing on a star for a number of years now. They promised they’d have a great follow-up to the heady days of Athlon 64. They promised Phenom would be a phenom. It wasn’t. Horrendous bugs out the gate blew that one out of the water in the worst, most visible possible way. Phenom II came along and, well, whoops. More of the same.
Then Bulldozer was going to do it, right? Bulldozer will herald a new architecture that will save the company. I remember users were sticking with older parts just so they could have an easy upgrade path to Bulldozer. Remember that joke? Remember that PR guy at AMD that was swearing that Bulldozer was going to bring huge performance gains?
Nope. Even when The Bulldozer Debacle was upon us, everyone swore Piledriver would solve it. It didn’t. They swore parts that wouldn’t even come to the FX series would solve it and those architectural shifts never even came.
Now the promise of tomorrow has shifted to Zen. Yeah, maybe it’s going to be a glorious new coming of AMD. But what does the his-STORY of the company say is more likely? What would the outside investor who’s been watching AMD for 20 years see?
A company that’s worth more bankrupt and being sold in bits and pieces than being a whole, coherent company, that’s what. AMD has great patents for CPU’s and GPU’s, even if they don’t have an x86 license post-bankruptcy. AMD has some great engineers that would make a great fit at any number of companies.
But if AMD’s only hope for revival is a winning the x86 battle against Intel–a company whose pocketbook is so deep they could just price drop their way out of any battle–then anyone with the money to help AMD will just wait till they are good and finally dead.
And then scrap for the leftovers with all the other vultures.
You make great points and I think a lot of investors look at it like that. But there are many kinds of investors and buyers out there. If you’re a larger investor maybe:
a) You believe that AMD can have a profitable future or at least break even
b) You have interests which align with intel not being the only player in the cpu market
c) If it all goes pear-shaped you’d like first dips on those leftovers
I can see a few of those players around myself.
I think there MAY be an investor or two that goes along with that thinking, but here’s the thing. B is never true because the real competitor for Intel at this point in the most general sense is ARM, which is why Intel has shifted all of its focus towards beating ARM at the performance per watt category. A has to be considered unlikely, given the history of the company. And C, while tempting, does not outweigh for most the considerations of A and B.
Because I think dibs on those leftovers will probably just go to whatever company happens to have the most money regardless of whether they were invited early or late to the party.
You yourself said that the company might be worth more bankrupt and sold in pieces, that could make option C more interesting for some people.
Buy it, if it works out then great, if it doesn’t work out well then transfer the patents and people we want and sell the rest.
The best of course would be that AMD finds a profitable niche and scale of business to operate with, without outside help.
I’m wondering how much they’re earning on the current console hardware, could that be a viable business path?
Which players?
a) People with poor pattern recognition rarely have access to the amounts of capital needed to save a company that is $200 MM in the red each quarter.
b) Intel is already the only meaningful player in the CPU market. Intel offerings compete against prior Intel sales more than anything AMD can muster.
c) If you want AMD’s patents it makes much, much more sense to carve them out of AMD with an aggressive targeted offer or buy them in a fire sale than put an ailing firm on life support.
This is wishful thinking.
I live in fear of a world where Nvidia has no competition in the computer graphics space … enough that I’m tempted to make a sci-fi series about it. Can we line up some suitable buyers for ex-ATI, just in case? 😛
In the long run intel might be Nvidias biggest competitor, integrated graphics can just about run Crysis 3 on lowest settings as it is now. 2-3 more generations of that and who knows.
The other factor is uncanny valley in terms of game design, do we really want to go there? Perhaps it’s better to stay on this side of the valley and in that case maybe intel can catch up and provide enough of a good experience that people stop caring.
I wish AMD would spin ATI off as a separate company. Work out a licensing agreement to keep the new ATI’s tech inside their APU’s. Let ATI fly free, get investment from companies that might love to use their tech, too.
But free ATI of AMD before the end comes because the end can’t be long now. How many more things that aren’t nailed down does AMD have left to sell? How many more campuses and buildings?
The worst thing for the end users will be the day AMD folds and takes both AMD and what’s left of ATI with it, leaving the CPU and GPU markets with only one viable competitor for the entire Windows x86-based market.
We’ll all look back and sigh that AMD’s insane purchase of ATI at absurd pricing led both down the road to ruin.
… You share my pain then, but your quality of writing is so much better … I have this plot for a sci-fi movie, you’d be the perfect scriptwriter, interested? 🙂
On a proper note (kept separate from the comedy in the other one) … do you too get the feeling that AMD is being propped up by people fearing the same kind of monopoly, both in CPU and GPU arenas? Several companies seem like they could have a big interest in keeping AMD afloat. If AMD were to sink, those companies suddenly become much more dependent on two of their suppliers (Intel and Nvidia) … losing a lot of negotiating power. Maybe the extra negotiation room is worth putting a little cash AMDs way.
System builders (desktop and laptop), component manufacturers, motherboard makers … Apple, Asus, Acer, Biostar, Dell, Gigabyte, HP, Lenovo, MSI, Supermicro … goodness knows who else. Maybe I’ve stumbled onto an arm of the Illuminati!
* Pzenarch goes missing *
I’d read that book lol. If AMD was hurting that bad they would sell off / spin off their GPU division to a seller and it would probably go very fast to the highest bidder. As it stands they can’t get by without their GPU division. It is also in their best interest to have it when (if) Zen is successful. Their APU market also heavily relies on their GPU IP. So if they sell that, then the farm has burned.
Thats the sad reality that fanboys on both sides constantly ignore. Neither company will be better off without the other. They, and more importantly WE need both companies to be strong, vibrant, and profitable.
… I’d argue that one company would be better off without the other … maybe not in a functional way, but in the bank. It’s a way that wouldn’t hurt AMD right now either.
I vaguely recall Steve Ballmer ripping into Jeff Bezos for not turning enough of a profit with Amazon … ignoring the high revenue, employment, expansion, diversification … making no mention of the many people and other businesses he directly and indirectly supports, the criteria for success (in his reported eyes) was profit.
Is AMD the antithesis of Ballmer’s reported philosophy? A company that makes regular losses, but that also (IMHO) makes the market a more vibrant place. It might be moreso if AMD were turning a profit, but a weak pulse is better than none.
Unfortunately AMD is not Amazon and the fundamentals are and have been weak for some time. The picture is pretty dire for AMD, and that is without a doubt A Bad Thing. AMD needs to do well as a business and that means fat margins for strong profit which can be reinvested into R&D, marketing, and all the other stuff any good business does. Amazon “loses” money but really thats because it is reinvesting every dime it makes into itself. AMD is bleeding due to poor sales and poor management, not because they are reinvesting heavily.
I think most of us want to see AMD succeed, but trying to “church up” their poor business performance isn’t going to change the reality that they need better products especially on the CPU side and fast. I’ve been saying for a long time that AMD needs their second Clawhammer Moment and they need it yesterday.
Well said.
Nvidia is not the problem. Intel is. I love intel products, but intel *WILL* squeeze out Nvidia in time. Not by performance… but by sheer propagation of 4k+ and 5k+ capable IGPUs.
If zen is mediocre as expected (zen comparable to late stage ivy bridge), AMD will also see continued loss of igpu share and discrete gpu share over time as well until Intel relegates AMDs entire sales portfolio to the 5% of the pc market. gamers. and there is not enough money there to survive.
in short unless Zen *DESTROYS* Intels cpus in power usage AND has double the performance per dollar AMD is doomed to a VIA niche existence and Nvidai will join them.
the upside is that the DOJ will split up intel at that point.
//plays doors “this is the end”//
[quote<]Nvidia is not the problem. Intel is. I love intel products, but intel *WILL* squeeze out Nvidia in time. Not by performance... but by sheer propagation of 4k+ and 5k+ capable IGPUs. [/quote<] Not going to happen unless intel decides to make a massive die with a TDP of 300 Watts. There will always be a need and want for dedicated graphics.
The new igpu can already do 4k video. and last time I checked the igpu was over 65% of the die size.. Its only a mater of a new revision for 5k. As for need of dedicated gpu’s that’s a VERY tiny market these days. three players will NOT survive.
And once there are only two players it becomes VERY lopsided as the other player (likely amd) cannot compete in terms of product portfolio and delivery.
this is not a intel bias. it just is what it is ..
Or, Intel can say, “we don’t need PCI lanes on our CPU” and give Nvidia a few years until they hit the cap of PCIe 3 x16 on older Intel CPUs. I am guessing that Xeon CPUs would have them, but, not enough people buy server CPUs and high end GPUs to keep NVidia alive for that long.
Nvidia’s decision is than they can keep on making GPUs aimed at both gaming and HPC/workstation, or focus all their effort into workstation/HPC. Nvidia is a very smart money at making money. I will tell you what I bet their position is.
There still isn’t a visible desktop replacement for x86 unless Apple decides to make their custom cores ramp up to the 50W+ range.
This is what they did to VIA and AMD …
This is brutal. But given the general decline in the PC market, and the fact that AMD has basically not introduced anything new in a while (Fiji was launched in Q2 but too late to matter, and is probably a low-volume part) it’s not terribly surprising.
I guess we’ve reached a point where either Zen will save the company, or they will really go under.
For Zen to save AMD, it has to be not less than, nor equal to intel’s offerings. It has to literally blow intel’s offering out of the water. Anything less people and companies will stick with the brand they know and have depended on for a decade.
If that’s true, then AMD honestly doesn’t stand a snowball’s chance in a nuclear reactor. But, I don’t think that’s true. AMD is losing right now because there’s just no way to justify buying their products except in a few slivers of peculiar use cases where their offerings are good value. That’s pretty much APUs, which are low-margin products.
Their graphics cards are okay, but nvidia’s are better, so they have to compete on offering the cheapest part for the performance (and of course nvidia isn’t sitting on its hands when this takes place).
Their processors are just junk, ESPECIALLY for gaming. Their only value proposition is for the workstation market, and the number of people looking to build workstations that can’t afford the much more power-efficient Intel hardware is probably pretty slim. They’re also somewhat competitive in some server and HPC tasks, but in every other task, they’re just plain inferior.
AMD is losing because their products are, across the board, worse than their competition’s. They don’t need to beat Intel and nvidia hands down (put simply [i<]that is not going to happen[/i<], they don't have the budget for the engineering needed for that kind of upset), they just need to offer products of Phenom II or Radeon HD 4850 level of competitiveness. The Phenom II was slower than Nehalem. But it wasn't THAT much slower, and it offered a great deal of horsepower for considerably lower cost than Nehalem, and its power consumption, while higher, wasn't off-the-charts ludicrous.
I think the biggest problem is that to have parity with their competition, they often have to charge around the same price (or sometimes more in rare instances). Notice, I’m not saying they choose to charge around the same price. I’m saying they have to.
Take the HBM-based Fiji GPU’s. I’m not sure how much lower they can go, really. It’s got HBM, which is probably a low yield part that is just out of the prototyping stage. In its highest end config, it includes a not cheap water-based GPU cooler. In its not as high end config, it shows signs of a lot of heat leakage due to the much higher temperatures. It also reeks of compromise with a front and back end that do much to undermine all the improvements in the dead center of the GPU. Those are probably a result of the lack of a dieshrink to squeeze in everything they originally intended.
This is a part that needs to be priced at $550 with its air-cooled sibling at $450, but instead it’s the cost that’s making it be $650 and $550, respectively, instead. That’s just to match nVidia’s parts. One of which is just part they released almost 10 months ago.
To match the lower end version of that product line released almost 10 months ago, they had to repackage and rebrand an existing product from two years ago with absurd amounts of VRAM to make a case for itself.
This is all to match or at least seem to match their competitor. Their problem isn’t producing a product. Their problem is pricing. I think I read at anandtech that “there are no bad products. Just bad pricing.” I think that’s usually true, especially of AMD.
Their pricing is bad and it may be essential to be priced thusly, but it’s undermining products that would otherwise be successful. If the parts are too costly to make that price, then they just didn’t design the products well to match the performance delivered.
I wouldn’t say their CPUs are junk, they are just more tailored for heavy multi-threading, and also have ecc support which makes them half decent for intro work stations due to the price, lile you said.
What sucks is the APU’S got 2 further revisions to the architecture, while Vishera got the short end of the stick, that was the real crime.
If AMD were equal or even within 5% of intel I’d go with AMD. I am perfectly happy supporting the underdog. I know I make next to no difference but with enough enthusiasts doing so we might make a difference.
The enthusiast market may pick up a few if reasonably competitive but that isn’t really going to do much for their overall sales. If I’m a large OEM, and I’m planning my line up, I’m taking the safe choice of using an established brand that hasn’t had a very rocky history. If I’m the buyer for a corporation, I’m taking the safe bet for the bit of extra cash.
That’s true. I’ve always said that when it comes to computers and all their underlying components, when it comes to performance and energy efficiency, it has always been relative. Zen may very well end up being 40% faster than Excavator but if Skylake ends up widening the gap between Intel and AMD even further, Zen will not command high enough prices to let AMD pull out of their tight spot, given how Intel seems to want to squeeze AMD down the price list (and also partly to stave off ARM’s onslaught).
People will still want to buy Zen though, but not at prices that AMD would want. That’s good for us short term, but bad in the long run.
Well is Zen has around the same performance as Sandy, but comes in a 6-core for 250-ish or a true 8-core for 350-ish, i would have no issue shelling out for that.
edit – as long as the power draw is somewhere around Haswell also.
edit 2 – and yes i agree also their lack of new products doesn’t help, updating vishera probably would have helped a bit, same with the 7850/7870, and I have yet to see a carizzo product available yet. Also Canada’s weak dollar doesn’t help, since a basic Beema laptop is about 600-650 now w/o 13% tax and use to be about 450-500 less than 1 year ago!!
Product-wise Zen could still be great, but if it falls behind Skylake AMD wouldn’t have the clout to price it the way they want to. More likely Intel will just continue to set the range at which CPUs will sell for and AMD will just slot themselves where they can, just as things have always been except for a few years in AMD history when they had stronger products (but even then they still had to play by Intel’s rules).
History shows us that even if AMD does wind up with a better part, it won’t matter. Figure that with the fact that they’re playing into a declining market and the writings on the wall.
“I guess we’ve reached a point where either Zen will save the company, or they will really go under.”
And I’m sure AMD knows this and has a big sign on their corporate HQ lobby that says, “If Zen doesn’t kill Skylake, we’re dead.” Guess that’s also why Lisa put K12 in the back seat as soon as she became the driver. She knew the gravity of the situation and how much the company’s survival depends on Zen. Gee, I wonder why this wasn’t done sooner during Rory’s tenure?
This puts an already rocky AMD on shakier ground. They do have interesting products in the pipeline but they need to survive until those make it to market. R9 Fury (x) is an interesting product but it isn’t the home run that it AMD needed to be to recover market share in the upper echelons of the (very profitable) GPU space. Until Zen, AMD has to rely on GPUs and we’re not likely to see anything interesting appear until 14/16 FinFETs are ready months from now. What prevents an already limping AMD from falling down entirely in the mean time?
Credit.. Seriously.. All big corporations run with that revolving line of credit that allows them to cover their operating expenses and since their loans aren’t due to 2019 they should be able to keep going till then. That doesn’t mean it’s going to be smooth sailing since they still don’t have enough money to throw at their R&D to match Nvidia or Intel.
The problem with AMD is that they are almost tapped out on short term credit. They already did reverse mortgages on the property they own (and spent that cash) and last quarter tapped into the $500 million line-of-credit that is backed by accounts receivable. If they dipped again into that last quarter then they may not have much left to borrow from. If that is the case expect AMD to float more stock (diluting current stock holders).
Last I heard they had a couple hundred million in cash. Not enough to pay off their 2bn dollars in debt, but enough to, last a few more months.
2019 is optimistic though. Right now they are paying junk-bond rates (over 10%.) That debt, if it’s allowed to compound will destroy AMD well within 4 years. Also, Massive debt repayments are due in 2018 (500M), 2019(600M), and 2020(900M).
And the stock is up 2.7% after-hours
I guess that means people find this to be a pleasant surprise?
Or maybe it’s short positions being covered.
The Q2 report was bad but the stock already priced it in before earnings actually was announced. Though they missed even the revised number by a penny (non-GAAP), it was not so atrociously bad that the stock will tank tomorrow so the shorts holding out for one last surge down may have shrugged and decided to pocket their gains.
Now the reality of the open market has it down 2.7% at $1.82. Interday day it hit a low of $1.74.
Geez… $1.74?! That might be an all-time low
It is getting close.
[quote<]the lowest price, intra day, was on Nov 21, 2008 at 1.62 [url<]http://finance.yahoo.com/q/hp?s=AMD&a=10&b=20&c=2008&d=10&e=22&f=2008&g=d[/url<][/quote<] By the way AMD closed down 4.28% at $1.79 today.
Golden parachute incoming in two quarters!
I certainly hope not. If anyone is going to get them out of this mess it’s Lisa Su.
Lol, so you are already conceding that AMD is done for.
Corporations have inertia, they don’t turn around in 2 months like your local pizza place might. It remains to be seen whether the inertia of this particular company is too great.
You bet they have inertia, unfortunately AMD’s inertia over the last decade has had them dropping from 50,000 feet at half a mach and they are now in their final 5000 feet with nothing left to jettison but the CEO.
What’s the minimum deployment altitude for her gold parachute?
She’s on the glass cliff. That probably means she’s end of the road and the one to finally take the blame when the song stops and there’s no more parachutes left.
An interesting timing… considering [url=http://www.wsj.com/articles/intel-president-renee-james-to-leave-1435843664<]Renee James is available in Q1/2016[/url<]
That’d be some career trajectory there.
That is indeed interesting. I’d like to read between the lines there, specially since more people is leaving Intel.
Can there be a change of focus for Intel or just a “generational” change of sorts? What about “market change, can’t take it, nope nope nope, i’m getting off this ship before it sinks”?
Cheers!
So the “Computing and Graphics” part is responsible for the lion’s share of their losses and the “one-time charge” has practically nothing to do with this one.
I wonder how the loss is divided up between the CPU and GPU businesses.
[quote<] Breaking down AMD’s revenue by business, soft APU sales pulled down the Computing and Graphics business overall, and led to Enterprise, Embedded, and Semi-Custom carrying a larger share of the company. Computing and Graphics revenue was down 29% over Q1’15 and a staggering 54% over Q2’14, primarily due to weak sales of notebook APUs, while graphics revenue was also down. Despite this the ASPs for both CPUs/APUs and GPUs were up on both a sequential and year-over-year basis, as while overall sales are lower, the prices of what AMD has sold has increased thanks to a richer product mix and the launch of the R9 300/Fury series at the tail end of the quarter. [/quote<] [url<]http://www.anandtech.com/show/9449/amd-posts-q2-2015-results-revenue-falls-once-more[/url<]
“launch of its Carrizo APUs as bright spots”
A quick Google Shopping search shows that Carrizo laptops are non-existent as of now.
They definitely exist for HP and Dell already, haven’t looked at everyone else. I wouldn’t expect to see too much before win10.
Correct, but so long as the APUs have left their hand then they sold them. Availability to consumers isn’t the same thing as manufacturers having put in an order or having recieved inventory of said APUs.
Only AMD thinks their products are doing very well. Given how they’re the ones most privy to their own financial records and how their publicized quarterly results always seem to be down in the dumps, that’s very ironic.