AMD CEO talks of long-term turnaround

[ShintaiDK]

I dont think Lisa Su will be CEO fo AMD when Zen releases.

 

[mrmt]

Did Lisa Su even have anything to do with Carrizo? Given the lead time on designing CPUs, that seems questionable. Sure, she could have cancelled it, but in that case AMD would have nothing at all even remotely competitive for the laptop market.

She did. She was COO and she was also SVP at AMD by the time Carrizo was being conceived, and she also kept Mark Papermaster on his post after she assumed. So yes, she has her fingerprints on Carrizo as well.

So far I haven't seen full benchmarks, but based on the leaked results that have shown up here and there, Carrizo doesn't look too bad in terms of hardware performance.

As much as Bay Trail isn't really lacking when compared to ARM hardware. It's the lack of *business* features that kills AMD, not performance per se, even when considering the mediocre levels for the power consumption.

 

[mrmt]

Revenue plunging, margins in the gutter.

This is why I find it baffling when some posters here claim that the "doomsayers" with respect to AMD are making completely unfounded claims. AMD's business is falling apart and it's going to take a lot to fix this.

Lisa has a lot of explaining to do. Wasn't she saying that Carrizo would help them stabilize the PC market and that focusing on OEMs would yield higher margins? And now she's coming with margins crashing because of Carrizo and OEMs? It seems that Lisa has made all the wrong bets, and if anything their channel is still choking with inventory (as opposite of what she said in Q4), so they have nowhere to run. I hope they finish the transition of the console APUs to GLF, otherwise we will be watching another WSA take-or-pay charge by the end of the year.

 

[Phynaz]

Today's financial news shouldn't be a surprise. AMD doesn't really have much worthwhile to sell at the moment, and won't until FinFET is ready. We've known at least since the 300 series graphics release that AMD was going to be in a holding pattern throughout 2015, with only a handful of new products (Carrizo and Fiji), both of them fairly niche, and years-old rebrands for everything else.

2016 will be the make-or-break year for AMD. I know this has been said before, but AMD is near the end of its rope, and the 2016 products (Zen and Arctic Islands) have to be successful, or AMD is finished as an independent company. Lisa Su has said as much in the interview with Tom's Hardware; they're betting the company on Zen being a success.

The rest of 2015 will likely be almost as bad as this quarter. What did anyone expect? Of course non-console APU sales are down. The wonder is that anyone's buying them at all. At least Carrizo has the potential to be moderately competitive in mid-range laptops, though the fact that it's only shown up in crappy, cut-rate devices so far is not encouraging.

The problem is the timing of Zen basically makes it 2017 chip. It's coming too late in the year to do anything for the bottom line in 2016.

 

[Arachnotronic]

The problem is the timing of Zen basically makes it 2017 chip. It's coming too late in the year to do anything for the bottom line in 2016.

And that's assuming no delays, and assuming that it's any good.

 

[frozentundra123456]

It was obviously a surprise to AMD as they missed their already very modest expectations.

Yea Anand has an article about it as well. Not sure where all these bits and pieces are from, but here is a link to the Anand article: AMD warning on Q2 earnings

Apparently apu sales (or lack there of) are bringing down both revenue and gross margins. In view of this, I dont really know why Intel is seemingly trying to outdo AMD in igps, but whatever.

 

[frozentundra123456]

Lisa has a lot of explaining to do. Wasn't she saying that Carrizo would help them stabilize the PC market and that focusing on OEMs would yield higher margins? And now she's coming with margins crashing because of Carrizo and OEMs? It seems that Lisa has made all the wrong bets, and if anything their channel is still choking with inventory (as opposite of what she said in Q4), so they have nowhere to run. I hope they finish the transition of the console APUs to GLF, otherwise we will be watching another WSA take-or-pay charge by the end of the year.

Well, I dont really blame Lisa Su. I mean RR did not last long either. I think she probably is competent, but AMD needs more than that, ... someone really outstanding to turn the company around. And someone with a really inspirational leadership style.

 

[VirtualLarry]

We're seeing nonsense like HP offering only a 1366x768 screen and no SSD on Carrizo laptops, while allowing Full-HD and SSD upgrades on the corresponding Intel model. If AMD wants to get their products out of the bargain basement, they have to be more aggressive about pushing back against this kind of thing.

That's really too bad. It seems like it's just as much the OEM's fault as it is AMD's fault, as to why their newest designs aren't selling well to the public.

I can't help but wonder how much back-room money and influence Intel is peddling with the OEMs to make this so.

 

[frozentundra123456]

Or they (Intel) may simply make better mobile processors. Or some of both.

In any case, about a year or so ago, I was shopping for a laptop for my wife to play some online, fairly intensive, flash games, and thought the better graphics of AMD might be beneficial. However, even idling on the display bench, the AMD laptops were warm to the touch, while the intel ones were not at all. Maybe the AMD models would have worked fine, but this certainly deterred me from purchasing one. The ivy bridge model we ended up purchasing does run remarkably cool compared to laptops of a few years ago.

 

[Phynaz]

I just did a little research, the last time AMDs sales were this low was back in 2003.

In 2003 they lost over $4B.

 

[mrmt]

I just did a little research, the last time AMDs sales were this low was back in 2003.

In 2003 they lost over $4B.

This was when they were dropping their memory business. Just to put things in perspective, AMD earned 4.6 billion in 2000 and spent around 800 million in R&D, or roughly what they spend today.

Speaking of losses, AMD should be having about 260MM in gross profits against 350MM in non-GAAP OPEX, that means they will burn some 90MM per quarter. Given that revenue should shrink even more, they have just 3 or 4 quarters until they exhaust the revolver credit line and their cash reserves, we surely can expect an asset sale or spin off in this time frame. On top of that further personnel cuts shouldn't be discarded.

 

[DrMrLordX]

Question: does Carrizo factor into any of the aforementioned numbers? I didn't think they were officially for sale yet, were they?

 

[hungtran]

Carrizo counts, as chips ship to OEMs at least a quarter ahead of retail release. AMD projected 32% margins due to the higher mix of Carrizo APUs (new release, higher margins) compared to XBox and PS4 chips, so lower revised margins now implies they overestimated Carrizo demand.

 

[Fjodor2001]

If no one is buying PCs then why didn't Intel warn? This is strictly an AMD issue, not a market issue.

Really? Here's a reality check for you:

http://www.cnbc.com/id/102459033

Intel warns, businesses not upgrading PCs

Intel warned Thursday [March 2015] that its first quarter revenue will be lower than expected.

http://seekingalpha.com/article/3298545-intel-pc-weakness-priced-in

Intel: PC Weakness Priced In

• Analysts getting bearish on Intel due to PC weakness.
• Shares close to $30, dividend yield near 3.20%.
• I think a majority of this weakness is priced in.

2015 has not been a kind year for investors of chip giant Intel (NASDAQ:INTC). Shares of the name have lost nearly 17% year to date, while the NASDAQ index is up almost 6%. The company's March revenue warning reinforced how reliant the company is on the PC industry. Unfortunately, things are not looking good in that space currently, the focus of many recent negative analyst notes.
[...]
Goldman Sachs came out with a very negative note during June, cutting its EPS estimates for the year based on weak PC demand. The analyst saw downside risk to notebook shipments for Q2, and didn't believe that we'd see that much of a Windows 10 boost in the second half of 2015.

 

[jeff_rigby]

Revenue plunging, margins in the gutter.

This is why I find it baffling when some posters here claim that the "doomsayers" with respect to AMD are making completely unfounded claims. AMD's business is falling apart and it's going to take a lot to fix this.

A Vidipath TiVo FCC suit and Windows 10 had/have an impact on a major product line that was supposed to develop from about Dec 2012 and forward.

Second Sony Passage Paper to the FCC DSTAC has a picture of a PC page 10 and 11 using Clear QAM tuners to receive encrypted cable TV.

Comcast just signed an agreement with Sony to use Passage.

Edit: It appears Playready ND and WMDRM ND used for Vidipath's DTCP-IP can coexist. This paper from Microsoft section 8 deals with DTCP WMDRM ND media being issued a Playready ND license. Section 13 sets the same "local" home networking restrictions for Playready ND that are set for WMDRM ND when used with DTCP-IP.

From Microsoft's Playready ND site: Supporting In-Home Content Distribution with PlayReady for Network Devices page 14

"The game console, acting as a PlayReady ND transmitter, has obtained a license from the service and it sends media files to valid PlayReady ND receivers that are part of the same in-home network. It also uses PlayReady technologies to build and issue local licenses to authorized receiving devices. Note that this model can also be applied to both live streams, video-on-demand and DVR content."

After Jan 2015 Microsoft is not charging for the use of their Playready server. They would only do that if they think it would become a standard used by Cable TV.

What does this mean? The FCC DSTAC will likely recommend Sony's passage and Microsoft Playready on TEE level (2.5 or above) hardware for a downloadable Cable TV DRM able to be used by PS4, XB1, Phones, Tablets, PCs and TVs with ARM trustzone. When will we know; Sept 2015, when can it be used; Jan 2016. No cable boxes needed and the XB1, PS4 and PC will be used as DVRs. This is also in the 2010 Xbox 720 leaked powerpoint.

Playready Porting has several versions based on the underlying security scheme with the higher being more secure as seen in the chart below. All versions of Playready stream and negotiate keys in the same manner but Playready knows higher porting versions like "3" are more secure and content owners of 4K media may require 3. The XB1 and PS4 support TEE level (Playready 3) DRM required for 4K media including the HDMI chip's HDCP with the PS4 supporting all ARM recommendations allowing on-line transaction support.

The purple block on the left represents Playready support provided by the player; I.E. Netflix would have playready in the app software. The next block labeled 2.5 has embedded Playready with various levels of support/security which the PS3 should support. The next to last is probably Intel which has it's own version of a security processor. The one on the far right is ARM TEE level DRM which is supported by all AMD's APUs and I think all ARM phones and tablets since sometime after 2006. The XB1 and PS4 have ARM blocks managed by a ARM trustzone processor in the APU and Southbridge respectively using Xtensa stream processors for Codecs and more.

Why does this matter? AMD is the only APU to incorporate ARM TEE Trustzone processors in their APUs. If the FCC DSTAC recommends only ARM trustzone Edit: The W3C recommend to DSTAC a hardware and software neutral scheme and as mentioned in the DSTAC meetings more schemes both software and hardware make it harder for professional pirates.

AMD Kaveri and Carrizo have UVD 4.2 which doesn't need to use GPU shaders for Codecs including HEVC. Mentioned in a joint Microsoft and AMD slide only the XB1, Kaveri and Carrizo can game stream using HEVC or Twitch using HEVC. No Intel APU can do the same.

Microsoft has stated that 4K streaming on Windows 10 requires Playready 3 and this should also be true of 4K blu-ray drive support on PCs. So it's possible AMD APUs can support Cable TV downloadable security and able to be a in home DVR or 4K blu-ray player or stream 4k media from the cloud or in the home (PS4 and XB1 too). It's possible to use ARM trustzone in dGPUs for 4K playback but it's 1) more expensive and 2) fan noise is too loud for the living room.

See also Vidipath certified platforms.

Most of us following AMD expected poor performance till 2016-2017. We are looking to 4K and Cable TV Downloadable DRM as well as Vidipath from Cable TV DVRs and direct from Cable Modems to impact AMD stock prices. XB1 and PS4 sales should increase late 2015 as they will be recognized as the best values for in home Media delivery. The PC as the central hub of the connected home starts with Game consoles.

The AMD G series APU is going to be in Samsung and HP thin client 22-23 inch web monitors.

 

[mrmt]

Why does this matter? AMD is the only APU to incorporate ARM TEE Trustzone processors in their APUs. If the FCC DSTAC recommends only ARM trustzone as the hardware component in Downloadable security for Cable TV in place of the cable card then AMD APUs from 2010 are the only cheaper building block for PC Cable TV DVRs and STB clients in the living room.

Not gonna happen.

 

[jeff_rigby]

Not gonna happen.

Your probably correct because on further reading the W3C paper cited by DSTAC has the following.

W3C standard Web application API for protected content playback
– Browser & OS neutral
– DRM technology neutral
– Hardware chip security neutral
• Focused on protected content playback.
– Video control, subscriber authentication and all other service logic resides in the app
• Adopted by all major browser vendors (Apple Safari, Google Chrome,
Microsoft Internet Explorer, Mozilla Firefox, Opera)
• Used by Netflix, DLNA VidiPath, ATSC 3.0
• Supported on PC, mobile, smart TV and other platforms

Vidipath DTCP-IP = WMDRM10 = WMDRM ND supports up to 1080i and can not support 4K
4K Blu-ray digital bridge = Playready ND and can support up to 4K on the proper hardware. Each platform reports it's Certificate Security Level with 3000 required for 4K media. We don't know, for instance, what level an Intel DRM implementation will be.

No information here except for an outline and it appears Intel is late for both HEVC and Security processor.

Intel® SGX for Dummies (Intel® SGX Design Objectives) Matthew Hoekstra (Intel)'s picture Submitted by Matthew Hoekstra (Intel) on September 26, 2013

 

[ShintaiDK]

Starts out harsh, -18% on AMD stocks.

 

[Dresdenboy]

I just did a little research, the last time AMDs sales were this low was back in 2003.

In 2003 they lost over $4B.

That's a good one.. Comparing that solely based on rev before ATI, GF, BD, etc.
It's not like with a K7 or K8 like winner the revs would jump back. There is no market memory for past revs.

 

[Dresdenboy]

Starts out harsh, -18% on AMD stocks.

It hit a strong support level around $2 (blue volume=buys, red=sales, green=unspecified):

Compare to INTC and NVDA, which tank tith the market:

(Live charts, will look different tomorrow )

 

[frozentundra123456]

well if you are drowning in the ocean, I suppose you can call the bottom your "support level".

I just think that is a misleading way to look at it since AMD is down to about 25% of its value from a few years ago, while intel is still higher than it was during that period, although it has been coming down recently. (I am talking of the 2011-12 period.)

 

[mrmt]

That's a good one.. Comparing that solely based on rev before ATI, GF, BD, etc.
It's not like with a K7 or K8 like winner the revs would jump back. There is no market memory for past revs.

Market doesn't need to remember. There's nothing on AMD pipeline that is going to change the dire situation they are in.

 

[mrmt]

well if you are drowning in the ocean, I suppose you can call the bottom your "support level".

I just think that is a misleading way to look at it since AMD is down to about 25% of its value from a few years ago, while intel is still higher than it was during that period, although it has been coming down recently. (I am talking of the 2011-12 period.)

On top of that Intel pays dividends to its shareholders, while AMD shareholders can't expect dividends on the foreseeable future.

 

[Phynaz]

Really? Here's a reality check for you:

http://www.cnbc.com/id/102459033

http://seekingalpha.com/article/3298545-intel-pc-weakness-priced-in

From March?!?

You do realize this is July right? You do know that July is in a different quarter than March??

 

[Fjodor2001]

From March?!?

You do realize this is July right? You do know that July is in a different quarter than March??

So what? It was just a few months ago. Who said we were just talking about July specifically!? We're talking about the trend for PC computer sales this year in general. Even the AMD info covers several months.

Also, if you'd actually bothered to read the info, analysts are pessimistic about Intel PC sales going forward too:

"Goldman Sachs came out with a very negative note during June, cutting its EPS estimates for the year based on weak PC demand. The analyst saw downside risk to notebook shipments for Q2, and didn't believe that we'd see that much of a Windows 10 boost in the second half of 2015."