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Another bad quater for AMD

H

heatlesssun

Extremely [H]
Joined
Nov 5, 2005
Messages
44,154
It's from Fud I know but if anyone wants to argue that AMD is going to make money in Q2 2008 go right ahead: http://www.fudzilla.com/index.php?option=com_content&task=view&id=8392&Itemid=1

The 4800 series is great, but I know that AMD would LOVE to be selling them at higher prices. In fact, the last time AMD was doing well was when Athlon's and Opteron's were selling at very high prices. I paid $800 for my Athlon X2 4800+ in 2005. Now their top end CPU goes for like $250.

So yes, I can understand why everyone is happy to see AMD come out with a nicely priced part, I am too. I now that the 4800 sales didn't register in Q2 reporting, but selling at prices below the competition has never served AMD well financially.

If AMD's next gen of GPU's are impressive, expect some higher prices. They may not have much choice if they want to stay afloat.
 
The $300 million figure is the analyst concensus (estimated -$0.52/share loss). AMD is also taking a charge for the 10% layoffs this quarter, not included in that figure.

The big number is the $880 million AMD is writing down yet again on the ATI purchase: http://biz.yahoo.com/e/080711/amd8-k.html The value of the company continues to evaporate overnight. The net loss in Q2 will probably be over $1.3 billion.
 
Right now it seems they're trying to rebuild their reputation and winback a loyal customer base, and good parts for decent prices is exactly the way to do that. They might not be making much profit on each card sold in the new 48xx series, but they probably are counting on a high volume of sales to help turn in more money. Also, look on the other side, nVidia got hurt even more on their new series - they had a low-yield chip and an expensive card that didn't perform as well as it should have for the price-point set. Now they have to sell it for much cheaper because of ATi's strategy.
 
I'm not discounting the 4800, but I do wonder about AMD's ability to be consistent. They do well for a year or two then disappear. They can't stay in business solely by underselling the competition is my main point. High volume, low price can never replace high volume, higher price. I think there lack of profitability and inconsistency are related.

While the 4800 is a great deal now, I think I would prefer to see a little higher price now if that means that next generation AMD still has great products and which in turn keeps nVidia on its toes. Once nVidia responds to this round, and they will sooner rather than later, will AMD be able to keep up and force down the prices of next gen parts?

If AMD can’t be consistent, trust me the days of $650 GPU’s will return in short order.
 
heatlesssun said:
If AMD can’t be consistent, trust me the days of $650 GPU’s will return in short order.
Click to expand...
And that's something everyone should be hoping against. It's true, their track record for the last couple of years hasn't been great. However, they did have the switchover and maybe now that they're "settled" some good products can come out. Who know, time will tell.
 
Mr. K6 said:
And that's something everyone should be hoping against. It's true, their track record for the last couple of years hasn't been great. However, they did have the switchover and maybe now that they're "settled" some good products can come out. Who know, time will tell.
Click to expand...

While no one likes expensive stuff, the problem with AMD is that the constant under pricing keeps them in a hole. They are not going to climb out of the mess they are in by selling cheap parts unless they can always make parts like the 4800, and they simply can't keep that kind of pace for long.

Does anyone really think that for multiple generations of GPU's that they'll have parts this fast for this kind of price? It's simply isn't sustainable.
 
AMD's going to be fine. After years and years of nVIDIA, I've purchased an HD4850. Partially due to the nVIDIA UMAP policy and partly due to the price.

I'm wondering how many other former nVIDIA only card owners made a switch?

Sure it may be arogant of me, but my single purchase was the one that will have been the trigger point that starts the revenue trend for ATI. :D

Just kidding, but regardless of the long term, I did purchase an ATI card. I'm appreciative of pricing that may or may not be the best for the company, but it was for me.

Seriously though, it used to be that top end cards from both vendors never exceeded $250.00. I'm hoping that we return to that trend.
 
heatlesssun said:
While no one likes expensive stuff, the problem with AMD is that the constant under pricing keeps them in a hole. They are not going to climb out of the mess they are in by selling cheap parts unless they can always make parts like the 4800, and they simply can't keep that kind of pace for long.

Does anyone really think that for multiple generations of GPU's that they'll have parts this fast for this kind of price? It's simply isn't sustainable.
Click to expand...

Thank god we live in a capitalist country! I respect AMD and I hope with the 4800 series we see a turnaround in their luck and they start to play a larger role in both the gpu and cpu department (cpu department I have less faith but maybe with time) but I mean if all else fails, and they unfortunately go bankrupt and cease to exist, well another company will spring up (possibly a disgruntled division in Intel) and take their place and competition will continue. But I am optimistic for AMD (gpu division, not so much the cpu division) and I intend to purchase a card from the 4800 series. If there are alot of people like me out there, then there is hope for AMD afterall.
 
Selling a lot of something for less is the same thing as selling less of something for more. And to top that off, people want to buy more at at time.
 
I think this will be the last bad quarter for AMD, they will probably go up from here.
 
the gpu/cpu business isn't like the console or home electronics market. you can't make up the loss on the hardware front by trying to make a profit on the media front. i don't think amd will develop a true successor to the r700 for a very long time. we might see the die shrink smaller and smaller while having more of them on a single pcb.
 
NKD said:
I think this will be the last bad quarter for AMD, they will probably go up from here.
Click to expand...

I sure hope so, AMD might not have the fastest processors but they have a great
price/performance ratio and have a great platform. I guess you could say I'm a fanboy
but if someone wanted to build the fastest computer, I'd still tell them Intel.
 
If it weren't for AMD who would keep Nvidia and Intel on their toes? I hope they figure out how to recover from this fiscal mess.
 
known12345 said:
well another company will spring up (possibly a disgruntled division in Intel) and take their place and competition will continue.
Click to expand...


Disgruntled division ... um... I know Intel may make more than most countries, but it is certainly not a sovereign nation with rebellions and political turmoil.
 
rennyf77 said:
the gpu/cpu business isn't like the console or home electronics market. you can't make up the loss on the hardware front by trying to make a profit on the media front. i don't think amd will develop a true successor to the r700 for a very long time. we might see the die shrink smaller and smaller while having more of them on a single pcb.
Click to expand...

I completely agree, AMD needs to focus on the cpu department. AMD can't even handle penryn and I doubt they are ready for nehalem, I mean they have trouble against the old 65mm cpus (conroe and kentsfield). Though I mean I rather see gpu competition then cpu competition. I rather pay higher for a cpu that will last me longer then for a gpu that will only last me 2 years at the most. So for now, go AMD! Continue to own the gpu market. Who knows, if they begin to take more market share from nvidia, we might actually see intel slow down their road maps and allow AMD some market share to turn a profit with the intention the profit be used to make high performance gpu to combat nvidia!
 
osalcido said:
Disgruntled division ... um... I know Intel may make more than most countries, but it is certainly not a sovereign nation with rebellions and political turmoil.
Click to expand...

Oh no I mean that there will always be people who "think" they can do better than the status quo and decide to form a new company with the thought that they can do better and hence competition is burn and hopefully price wars =).
 
AMD and Nvidia should just merge. Nvidia's future potentially precarious with the whole SLI licensing and Nehalem chipset fiasco, AMD's future is also potentially precarious, if they merged they could corner the market on GPUs with great processors and chipsets to boot and go head to head with Intel who incidentally also makes all three and has said they will be expanding their GPU market. Two equal companies with equal capabilities and market domination. Yes I make this post with no actual intelligent thought applied.
 
AMD can not ride this storm out on one graphic card. I don't know why people are thinking thing. AMD need to stop going cheap and go to quality and fix their management problems. If AMD stays on their current coarse they will lose a lot of money this year.
 
You can sell an expensive GPU and let a few people who think that it is worth it to buy it like the GTX280 or you can sell a cheaper GPU and let a lot more people to buy it like the HD4870. In the end the result might be the same but I think that selling volume will bring in more profit. With Puma coming out soon and nVidia's mobile chip having trouble, next quarter will be more interesting.
 
alg7_munif said:
You can sell an expensive GPU and let a few people who think that it is worth it to buy it like the GTX280 or you can sell a cheaper GPU and let a lot more people to buy it like the HD4870. In the end the result might be the same but I think that selling volume will bring in more profit. With Puma coming out soon and nVidia's mobile chip having trouble, next quarter will be more interesting.
Click to expand...

My point was that if you can consistently pull off 4800's then sure you'd be fine. Offering comparable performance for half the cost will sure make you a winner. But can they do it on a consistent basis generation after generation. Of course not. Then you are forced to undercut the competition on price even more. Look at Phenom. Athlon X2 selling prices were MUCH higher till Core 2 came out. And buy no coincidence, AMD was making money, high volume AND higher dollar.

They'll never consistently make money by underselling the competition. They have to be BETTER than the competition to be able to charge the price that being the best commands.
 
Even if things get very dark for AMD/ATi someone will buy them up and keep them going, those 2 brands names are worth quite a bit of money. I agree they have had issues, but this is the last charge back for the purchase of ATi so we should get a better picture of their financial outlook by the end of the year. And while it is true they can't always crank out 4800 series it does show that even under adverse conditions they have kept working R&D. If I were Intel I would note that they haven't rolled over and died, even though they are no serious threat to Chipzilla at this time.

I'd also like to point out the many people on this board who said Intel could never stage a comback, the nVidia would not recover from the FX series and the larger group who had proclaimed ATi dead for the last several years. All of these companies are big and have more than just your framerate at stake.
 
xbob04 said:
Even if things get very dark for AMD/ATi someone will buy them up and keep them going, those 2 brands names are worth quite a bit of money.
Click to expand...
There is a huge problem with someone "buying" AMD:

The sale of over 50% of AMD invalidates AMD's x86 license as a change of ownership. That is part of the current and prior license agreements and isn't likely to change in the next one that must be signed in January 2010, one year prior to the expiration date of the current agreement. The CPU business becomes pretty worthless to the buyer until the buyer renegotiates the license with Intel, probably at less favorable terms.

The saviors often mentioned are Samsung, Abu Dhabi's Mubadala Development or IBM. The first two would have foreign ownership problems and the third doesn't seem interested in purchasing AMD. Any purchaser will need to have deep pockets and the desire to throw billions into competing with Intel with little chance of making the money back. Then there's also a pipe dream where AMD supposedly sells off 49% of its fabs for twice as much as it is worth to pay off all debts. LOL, I am not making that up and some people really believe that.

Alternately, AMD can't sell off ATI even if it wants to because it isn't worth as much as the debt and it is collateral for the loans. AMD would need to somehow get a very large (unsecured) loan to sell off a "critical" piece of the business it isn't interested in selling. ATI is Hector's albatross.

This story doesn't look like it will have a happy ending.
 
Even though AMD is in a spot of trouble right now, a good line of CPUs along with continued success of their videocards will allow AMD to rebound into financial success. AMD does NOT have a lot of time to make this happen....
 
It seems like it was yesterday when people said ATI won't be able to recover from their R600 failure and they won't be able to compete with Nvidia ever again based on their financial situation.
 
pxc said:
There is a huge problem with someone "buying" AMD:

The sale of over 50% of AMD invalidates AMD's x86 license as a change of ownership. That is part of the current and prior license agreements and isn't likely to change in the next one that must be signed in January 2010, one year prior to the expiration date of the current agreement. The CPU business becomes pretty worthless to the buyer until the buyer renegotiates the license with Intel, probably at less favorable terms.

The saviors often mentioned are Samsung, Abu Dhabi's Mubadala Development or IBM. The first two would have foreign ownership problems and the third doesn't seem interested in purchasing AMD. Any purchaser will need to have deep pockets and the desire to throw billions into competing with Intel with little chance of making the money back. Then there's also a pipe dream where AMD supposedly sells off 49% of its fabs for twice as much as it is worth to pay off all debts. LOL, I am not making that up and some people really believe that.

Alternately, AMD can't sell off ATI even if it wants to because it isn't worth as much as the debt and it is collateral for the loans. AMD would need to somehow get a very large (unsecured) loan to sell off a "critical" piece of the business it isn't interested in selling. ATI is Hector's albatross.

This story doesn't look like it will have a happy ending.
Click to expand...

Do you have any links to this license? I've heard this prattled on and on all about the internet, and I have not once found or been presented with any solid proof of anything. I know AMD has a cross-licensing agreement with Intel, but since there's absolutely nothing solid available to the public, I have to treat anything I hear about the subject as bullshit.

The fact is, you don't need a license to create an x86 processor - the x86-64 spec is free, and IA-32 has already been reverse-engineered many times. What you do need a license for is to get new tech like SSE into your processor, and to avoid the the litigation hurricane that is Intel. If you have ANYTHING resembling something they have a patent for, their lawyers will find it.
 
defaultluser said:
Do you have any links to this license? I've heard this prattled on and on all about the internet, and I have not once found or been presented with any solid proof of anything.
Click to expand...
You must not have even tried to look. This isn't anything new. The current contract in it's public, redacted glory: http://contracts.corporate.findlaw.com/agreements/amd/intel.license.2001.01.01.html

The x86 instruction set can be implemented by anyone, but the patents and other technology used under license for many of AMD's particular implementations allowed in the agreement cannot. AMD also pays royalties for those rights (see section 4). Without a valid agreement, a new owner would be selling unlicensed Intel technology. See the problem now?

The agreement also sets limits on how many % of x86 CPUs AMD can outsource (confidential, but supposedly limited to 20% and is not disputed by AMD when asked by analysts), and the whole license is non-transferable (see sections 6.2-6.3).

defaultluser said:
I know AMD has a cross-licensing agreement with Intel, but since there's absolutely nothing solid available to the public, I have to treat anything I hear about the subject as bullshit.
Click to expand...
*Everyone* who points out these well known provisions isn't lying. The information has been available to the public for years. Being in denial doesn't make it go away. Well, now you know. :p
 
I think the next native quad coming for amd would be plenty enough powerful for gamers, well it is not like I would make a switch for almost 2010, because I already have a q9450 clocked at 3.8, and that is not going anywhere soon. I believe an average person would be able to get a 45nm phenom black edition running at 3ghz for less than 300 buck, taking in to consideration amd's pervious price points. we should see amd really start to bounce back in 2009, if an average person can see it I am sure the shareholders see it too. it would not make sense for amd to just go down the drain right now considering they are probably throught thier worst time already and it possibly can not get any worse with the success of rv770 and the future quad cores running at 3+ ghz.

I am fully aware that intel would have something faster but since I am talking about amd, they look to be in great shape in the near future.
 
OldPueblo said:
What about the currently implemented x64 instruction set, didn't AMD create that and did Intel then have to license it from them? I think it's interesting that when you go to download the x64 version of an OS trial its labeled "AMD64" even if it's also for the Intel processor, and I've wondered if that's why. Example:

http://www.microsoft.com/downloads/...4C-A40E-4FD2-A0F7-32212B520F50&displaylang=en
Click to expand...

x86-64 is an open standard created by AMD. Anyone is free to create their own implementation.

AMD's copyrighted implementation of x86-64 is called AMD64, and Intel's copyrighted implementation is called EMT64. Many developers simply refer to this generically as AMD64, because they were the first on the scene by many months.

In fact, Microsoft famously put Intel on the firing line when they supported AMD64, then refused to make a version of XP for an incompatible Intel architecture. This forced Intel to release their EMT64 implementation, which was (mostly) AMD64-compatible.
 
pxc said:
You must not have even tried to look. This isn't anything new. The current contract in it's public, redacted glory: http://contracts.corporate.findlaw.com/agreements/amd/intel.license.2001.01.01.html

The x86 instruction set can be implemented by anyone, but the patents and other technology used under license for many of AMD's particular implementations allowed in the agreement cannot. AMD also pays royalties for those rights (see section 4). Without a valid agreement, a new owner would be selling unlicensed Intel technology. See the problem now?

The agreement also sets limits on how many % of x86 CPUs AMD can outsource (confidential, but supposedly limited to 20% and is not disputed by AMD when asked by analysts), and the whole license is non-transferable (see sections 6.2-6.3).

*Everyone* who points out these well known provisions isn't lying. The information has been available to the public for years. Being in denial doesn't make it go away. Well, now you know. :p
Click to expand...

You'd be surprised how difficult this contract is to find (if you don't know what you're looking for, or where to find it). I thank you for pointing it out to me, because that's more than ANYONE has ever been able to do regarding this issue.

Sorry for the negative tone of my reply; you're the first person ever to actually back up claims about the Intel AMD license with a real document, and I wasn't expecting any surprises.
 
Well I certainly hope AMD finds a way to pull it out, the deck is certainly stacked against them, but if they can find a way to exploit the mid-range price/performance ratio and remain profitable I think we all agree it would be good for all of us. If not, I guess we'll all be back on nVidia in a while. As I've said more than once, I buy based on bang for the buck, not much else.
 
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