AMD Q3 Result

[ShintaiDK]

You think they should file for Chapter 11 and restructure?
That would be a very huge undertaking, and would be a mess for the patents, and all the cross-licensing agreements that they have now.

It isn't a simple thing to just restructure like that, if it was, tons of companies would be doing it to get out of 'bad deals'. There are some pretty severe restrictions, and not all companies that have tried that route succeed in coming out it bankruptcy.

In AMDs case it would be a huge benefit. The reason why its not happening is most likely due to the BoD. Nobody at the helmet of AMD would survive it. AMD got so many dead skeletons in the closet they need to get rid of. And the only way its going to happen would be under a restructure.

As it is now, the death spiral continues without hope of recovery. They are always far behind the curve and reacts reactively rather than proactive.

 

[raghu78]

So AMD management was just talking rubbish when they said at FAD 2015 that they will return AMD to profitability in H2 2015. The management has no credibility and are a joke. They look like a bunch of clueless morons. I am not sure Zen can save AMD. Bulldozer has killed AMD. Its a matter of time before the final obituary is written.

 

[Arachnotronic]

So AMD management was just talking rubbish when they said at FAD 2015 that they will return AMD to profitability in H2 2015. The management has no credibility and are a joke. They look like a bunch of clueless morons. I am not sure Zen can save AMD. Bulldozer has killed AMD. Its a matter of time before the final obituary is written.

Please, tell us how you really feel

 

[AtenRa]

So AMD management was just talking rubbish when they said at FAD 2015 that they will return AMD to profitability in H2 2015. The management has no credibility and are a joke. They look like a bunch of clueless morons. I am not sure Zen can save AMD. Bulldozer has killed AMD. Its a matter of time before the final obituary is written.

Q3 is only half of H2.

Guidance for Q3 2015 was

Cash at 700M, they managed to have 755M down from 829M

Guidance for Q4 2015 speaks of

Cash to be approximately flat at 750M after paying ~19M for 2015 restructuring. Meaning they will be profitable.

 

[JoeRambo]

It is great that AMD is still fighting. They seem to be managing their money quite well and planning to survive for few quarters more. Hopefully that is due to "survival till new products turn the tide" and not just BoD kicking the can forward on their way to bank.

 

[dark zero]

Seems that only Semiconductor and GPU are saving the Day. So.... Maybe time to split AMD in 3 companies and sell the GPU one.

 

[Phynaz]

So it seems that ZEN will be released in 2016 (Q4 2016 ??) with full year of revenue in 2017.

Which possibly contradicts what they said earlier that it would sample in 2016.

Sampling is availability, and they did not specifically say it would ship for revenue. In the past they specifically pointed out when revenue shipments would begin, so this may be dancing around the fact that it is late.

 

[ultimatebob]

How much longer can AMD stay in business at their current burn rate? A year? 18 months?

Is AMD expected to release any new flagship products by then that could turn things around?

 

[cbn]

65M$ APU inventory write down.

I have to wonder what would happen if AMD set their APU prices lower to begin with?

IMO the desktop APU situation is very price sensitive and I have to wonder if going $10 to $15 lower on something like a A8-7600 is better in the long run than holding on to the inventory for an extended period of time at a higher sale price.

CPU ASP declined.

Not surprising considering Vishera (AM3+) is 3+ years old.

GPU ASP was flat.

That is not so bad considering they have been on 28nm for almost four years now.

 

[ShintaiDK]

Its quite bad with the GPU side. Since they raised prices and created new products. Just compare with NVidia. Yet ASP was flat.

 

[cbn]

Its quite bad with the GPU side. Since they raised prices and created new products. Just compare with NVidia. Yet ASP was flat.

Yes, they raised the high end......but then all the other AMD 28nm Video cards basically depreciated.

A new process tech would help them move things along.

P.S. If the future process nodes end up being extended life for video cards (like 28nm was), then I would hope AMD would be able to adopt a more aggressive uarch policy like Nvidia did with Maxwell. This to help extend the lifespan of the process node, yet still keep the pace up. (Maxwell was basically what gave Nvidia its extra legs on 28nm. Legs that AMD did not have.)

 

[sm625]

I'm curious about that $65 million writedown of inventory. That is pretty big considering it is 15% of their CPU and graphics revenue. So when are we going to be able to buy A10 APUs on newegg for $37?

 

[Ajay]

So AMD management was just talking rubbish when they said at FAD 2015 that they will return AMD to profitability in H2 2015. The management has no credibility and are a joke. They look like a bunch of clueless morons. I am not sure Zen can save AMD. Bulldozer has killed AMD. Its a matter of time before the final obituary is written.

In reality, the only way Zen 'saves' AMD is for it to have the same effect as the K8 did (good sales, though bound by manufacturing output, and high ASP == high margins). It's just nearly impossible to see how AMD beats Intel in a similar fashion today - given the maturity of x86 processors and the tremendous cost of development.

 

[Phynaz]

Q3 is only half of H2.

Guidance for Q3 2015 was

Cash at 700M, they managed to have 755M down from 829M

Guidance for Q4 2015 speaks of

Cash to be approximately flat at 750M after paying ~19M for 2015 restructuring. Meaning they will be profitable.

I haven't read the call transcript yet, but last quarter they said they would not turn a profit in 2015.

 

[AtenRa]

In reality, the only way Zen 'saves' AMD is for it to have the same effect as the K8 did (good sales, though bound by manufacturing output, and high ASP == high margins). It's just nearly impossible to see how AMD beats Intel in a similar fashion today - given the maturity of x86 processors and the tremendous cost of development.

x86 Servers, Data center and cloud is 14-15 Billion dollar market per year with very high margins. By 2017 this will be close to 16-17 Billions market.

If AMD will be able to just get a small percentage of only 10% with ZEN, it will forever change AMDs financials.

AMD doesnt need to be better in everything with ZEN, it only needs to have a competitive product in perf/watt and many will be happy to have a second source Server part.

 

[AtenRa]

I haven't read the call transcript yet, but last quarter they said they would not turn a profit in 2015.

I was talking about Q4 2015 only. Nobody said they will be profitable for the entire year.

 

[VirtualLarry]

I'm curious about that $65 million writedown of inventory. That is pretty big considering it is 15% of their CPU and graphics revenue. So when are we going to be able to buy A10 APUs on newegg for $37?

http://www.newegg.com/Product/Product.aspx?Item=N82E16856164027

Was $139.99 a few days ago, when I bought one. It's not an AMD CPU, per se, but I assume that the Richland APU is a good portion of the cost of the unit.

 

[tential]

http://www.newegg.com/Product/Product.aspx?Item=N82E16856164027

Was $139.99 a few days ago, when I bought one. It's not an AMD CPU, per se, but I assume that the Richland APU is a good portion of the cost of the unit.

Is that actually better than the Intel competing box?

 

[Ajay]

x86 Servers, Data center and cloud is 14-15 Billion dollar market per year with very high margins. By 2017 this will be close to 16-17 Billions market.

If AMD will be able to just get a small percentage of only 10% with ZEN, it will forever change AMDs financials.

AMD doesnt need to be better in everything with ZEN, it only needs to have a competitive product in perf/watt and many will be happy to have a second source Server part.

I disagree. They need a better CPU, if AMD is targeting servers, then Zen needs to beat an equivalently priced Xeon. And they need to convince a heavy hitter in that market to use their CPUs - someone who can add real value to AMD's platform. Intel has invested very heavily in their whole server platform, so even a better CPU probably is not enough.

And that just basic server hardware requirements. Remember when people bought IBM because no one got fired for buying IBM. Guess who's the new IBM in that story today - it's not AMD. I don't like being a Debbie downer on AMD - really I don't. I wish I was signing their praises - but they are just in a really tough spot right now and they need a strong inflection towards to positive to have any hope.

 

[AtenRa]

I disagree. They need a better CPU, if AMD is targeting servers, then Zen needs to beat an equivalently priced Xeon.

I disagree, ZEN could make tons of money without beating Intel XEON in top performance. As i said they only need to be competitive in Perf/watt, that is the future of servers(especially data center and Cloud).
So i would say that AMD has a chance if ZEN has better perf/watt than Intel, then they could sell at high margins, make money without the need to sell high volumes.

 

[Arachnotronic]

I disagree, ZEN could make tons of money without beating Intel XEON in top performance. As i said they only need to be competitive in Perf/watt, that is the future of servers(especially data center and Cloud).
So i would say that AMD has a chance if ZEN has better perf/watt than Intel, then they could sell at high margins, make money without the need to sell high volumes.

I don't think Zen has a good chance of being able to do this. Intel has invested far more in its uArch and it has the better manufacturing tech.

 

[tential]

I disagree, ZEN could make tons of money without beating Intel XEON in top performance. As i said they only need to be competitive in Perf/watt, that is the future of servers(especially data center and Cloud).
So i would say that AMD has a chance if ZEN has better perf/watt than Intel, then they could sell at high margins, make money without the need to sell high volumes.

Being competitive one generation in perf/watt will not win amd much of anything server side. They need to be able to market themselves, and be desirable. Sorry, having multiple friends who work right now in server/it sales, they aren't sitting there looking at benches. They're selling based on relationships and their top sales people are women who no joke get calls repeatedly from many it professionals just to talk and flirt.

Don't see zen being even offered to many clients let alone many using zen.

Amd simply doesn't have what it takes to sell zen, no matter the merits it has.

 

[Phynaz]

I was talking about Q4 2015 only. Nobody said they will be profitable for the entire year.

They said they would not have a profitable quarter this year. Care to show us your math?

 

[Arachnotronic]

They said they would not have a profitable quarter this year. Care to show us your math?

Their guidance suggests another loss.

 

[ultimatebob]

I'm curious about that $65 million writedown of inventory. That is pretty big considering it is 15% of their CPU and graphics revenue. So when are we going to be able to buy A10 APUs on newegg for $37?

Would you really want to do that, without knowing that AMD is still going to be in business and providing driver updates 2 years from now?