AMD Q4 results

[sontin]

Microsoft will not go back to another "pay or die" contract. So i guess that Microsoft will only pay for the production cost and give a "license" bonus. Gross margin will decline from nearly 100%.

That statement about the 20% is nonsense and makes only sense if revenue from compute and graphics will further decline.

 

[SiliconWars]

Finally we get to the point - You don't believe the 20% number given by AMD. We already knew this was going to happen, I'm just surprised you held it off for so long.

 

[Abwx]

Microsoft will not go back to another "pay or die" contract.

Source?..
Are you a MS representative.?..

You re implying that AMD want the same contract as Nvidia
a few years ago , that just using imaginary assumptions.

 

[SiliconWars]

Source?..
Are you a MS representative.?..

You re implying that AMD want the same contract as Nvidia
a few years ago , that just using imaginary assumptions.

Yep I mean they could have gone with one of the other options open to them instead...oh wait there aren't any. AMD has the only console chips in town, I think that puts them in a pretty good bargaining position. MS is well aware that AMD isn't likely to pull an Nvidia on them too.

 

[sontin]

What point? That i don't believe AMD? I thought that was obviously.

20% alone from consoles mean that revenue will increase to >$800 millions from <$100 millions.

So the graphics business will hit more than $2,1 billions in 2013. Good luck with that AMD!

 

[SiliconWars]

What point? That i don't believe AMD? I thought that was obviously.

20% alone from consoles mean that revenue will increase to >$800 millions from <$100 millions.

So the graphics business will hit more than $2,1 billions in 2013. Good luck with that AMD!

Let's assume you are right and AMD is only getting $25 million a quarter from console revenue (wonder where the other $200+ million is coming from in embedded but lets not go there).

Double that for the new console prices, so $50 million a quarter (note that we are already at your suggested yearly total of $200 million), now multiply by 2.5 for the number of extra chips (5 vs 2) = $500 million. Now factor in the fabbing and shipping costs etc. You think that can't hit $800 million this year? That is with your paltry figure of $25 million a quarter.

 

[Abwx]

The console market shrinked to 10bn/year due to economic turndown
but also to outdated consoles that are known to be soon replaced.

Expect delayed buying decisions to increase demand once the
replacements are launched.

If AMD can extract only 10% out of this market , wich would translate
in a meager 30-35$ out of each console , they would be close to 1bn/year.

 

[Abwx]

Let's assume you are right and AMD is only getting $25 million a quarter from console revenue

I wouldnt even consider debating such an option unless there
is some evidence that they sell their CPU+GPU for 3-4$.

 

[sontin]

Double that for the new console prices, so $50 million a quarter (note that we are already at your suggested yearly total of $200 million), now multiply by 2.5 for the number of extra chips (5 vs 2) = $500 million. Now factor in the fabbing and shipping costs etc. You think that can't hit $800 million this year? That is with your paltry figure of $25 million a quarter.

You can't double the income because new consoles will substitute the old one. To double the income the whole market needs to double the volume.

The WiiU will not help to get to the >$800M.

We have only the nXbox and the nPS. Booth consoles will launch sometime in Q4 2013. To get >700M AMD must sell at least 14M units for an ASP of $50. From here you can do the math.

The WiiU was expected to sell 3,5M units in 2012. And even with 3,5M units AMD's graphics business decreased from Q3.

So both next gen consoles must double the estimated <edit>2012</edit> sales from the WiiU in this year.

 

[mrmt]

It's xbit so take with a large pinch of salt. However are they correct that AMD cannot actually licence x86 anyway, so basically they MUST be fabbing these chips

IBM has a license for design and manufacture x86 chips. According to SA, Oban is being manufactured primarily at IBM with GLF as a second supplier. According to the same SA, it is Microsoft placing orders for both foundries, not AMD.

 

[Abwx]

.

The WiiU was expected to sell 3,5M units in 2012. And even with 3,5M units AMD's graphics business decreased from Q3.
.

You re using blantlantly fabricated numbers to fill your agenda....

A year is two months..??..

the original Wii's holiday sales start with 3.5 million units sold between November and December,

http://www.gamesindustry.biz/articl...l-3-5-million-units-globally-this-holiday-ihs

 

[sontin]

What are you talking, really?
For 2012 WiiU sales are estimated around 3,5M units. AMD's graphics business decreased from Q3 -> Q4.

On the gaming revenue, I think we talked about the Nintendo Wii U that was announced in the fourth quarter and that was part of the revenue that was reported in the graphics segment.

http://www.xbitlabs.com/news/multim...s_to_Account_for_20_of_Revenue_This_Year.html

The WiiU will not help to archive the 20%.

But i think you expect that Sony and Microsoft will buy inventory worth >$700M without evidence of the acceptance of the new consoles.

 

[SiliconWars]

The Wii U will sell close on 20 million units this year. Of course thats going to help towards the 20%. The "Latte" gpu is 40nm TSMC so I'm assuming that's being fabbed for them by AMD. If they are making less than $15 to $20 on this then they're doing it wrong.

Obviously you believe that they are getting $4-$5 on it. That's not a lot for the most important part of a $300 console (cheapest one).

Even if it's only $10 that's still your entire $200 million for the year suggestion on one console.

 

[Abwx]

LOLZ...

Wiiu was launched 18 november....

Some previsions :

Long-term, IHS suspects that Nintendo will sell fewer Wii U consoles than the original Wii. By the end of 2013 (its first full year on the market), IHS believes that Nintendo will have sold 11.3 million units. This is in addition to the 3.5 million units it expects Nintendo to sell this year. By the end of 2014, Nintendo should sell another 12.9 million units, followed by 14.7 million units at the end of 2015 and 14.3 million units at the end of 2016. That amounts to 56.7 million units — down from the original Wii, which sold 79 million units during its first four years on the market

http://www.forbes.com/sites/benzingainsights/2012/11/14/nintendo-wii-u-sales-to-exceed-predecessor/


Even with 10$ they would get more than 100mns/years from Nitendo alone
and that s for only a GPU.

 

[ShintaiDK]

IBM has a license for design and manufacture x86 chips. According to SA, Oban is being manufactured primarily at IBM with GLF as a second supplier. According to the same SA, it is Microsoft placing orders for both foundries, not AMD.

Alot of companies got x86 licenses actually.

But you violate the cross licensing agreement if you try manufactor it using Intel IP. And you cant make a modern x86 CPU without Intel IP. Not to mention Microsoft dont have any at all. So Microsoft cant hold the design.

 

[sontin]

The Wii U will sell close on 20 million units this year. Of course thats going to help towards the 20%. The "Latte" gpu is 40nm TSMC so I'm assuming that's being fabbed for them by AMD. If they are making less than $15 to $20 on this then they're doing it wrong.

AMD is not fabbing anything in the WiiU. They license a design to Nintendo. Like ARM they get money from every sold console. And this is way under $10 for the WiiU.

Obviously you believe that they are getting $4-$5 on it. That's not a lot for the most important part of a $300 console (cheapest one).

The most important part is the ability to fab everything. AMD sold only a design and gets license royality from Microsoft and Nintendo for 360 and Wii/U.

If you believe that AMD gets $10 than why would ARM only wants less than 1% of it from their customers?!

 

[Abwx]

And this is way under $10 for the WiiU.

Dare to give a source.?..
I can tell it s 80$ , by the way , it s easy to say it s more than
this or less than that based on irrationalities...

If you believe that AMD gets $10 than why would ARM only wants less than 1% of it from their customers?!

Because ARM provide only simple and basic designs , only the CPU part ,
all the rest of the chips are designed by the licensees , hey , even the
circuit routing is not provided , no Spice models , no parameters extraction
since licensees are likely to use different foundries processes.

Get your fact straight before doing such poor comparisons..

 

[sm625]

I would be shocked if AMD made more than $3 per console. (And more than $5 for the new ones.)

 

[Haserath]

AMD needs ~500M to break even for operation per quarter.

Le's say they keep 35% gross margins.

They would have to bring in 1.6B revenue per quarter to keep their current operations going. So 6.4B per year.

Their big releases this year are Kabini/Temash, Richland, consoles, and whatever they're calling their graphics these days. That's where their main revenue streams will most likely come from.

Do we know approximate numbers for either revenue or profit on each of these segments, or is it all speculation?

 

[ShintaiDK]

AMD needs ~500M to break even for operation per quarter.

Le's say they keep 35% gross margins.

They would have to bring in 1.6B revenue per quarter to keep their current operations going. So 6.4B per year.

Their big releases this year are Kabini/Temash, Richland, consoles, and whatever they're calling their graphics these days. That's where their main revenue streams will most likely come from.

Do we know approximate numbers for either revenue or profit on each of these segments, or is it all speculation?

We do know CPU vs GPU for example. Revenue and profit. Plus the product mix of each.

 

[mrmt]

Alot of companies got x86 licenses actually.

But you violate the cross licensing agreement if you try manufactor it using Intel IP. And you cant make a modern x86 CPU without Intel IP. Not to mention Microsoft dont have any at all. So Microsoft cant hold the design.

Yes, but according to the same SA story, Oban is PPC, not x86.

 

[ShintaiDK]

Yes, but according to the same SA story, Oban is PPC, not x86.

Arh, well that sounds more pausible for sure

But again...
http://semiaccurate.com/2012/01/18/xbox-nextxbox-720-chips-in-production/
http://semiaccurate.com/2013/01/02/xbox-next720-silicon-production-day-arrives/

Classical.

 

[NTMBK]

Yes, but according to the same SA story, Oban is PPC, not x86.

Actually that story said it was "99.9%" likely to be PowerPC, due to x86 license issues- followed by a later story saying it was x86.

 

[Haserath]

If AMD aimed for 50% gross margin, I wonder what their revenue would do...

 

[quest55720]

I would be shocked if AMD made more than $3 per console. (And more than $5 for the new ones.)

Unless MS,Sony and Nintendo funded the development it would be have to be more than that. Even high range is 80-100 million for a console now days. At 3 dollars per that is only 300 million at most that is not much money over 6-8 years. I would figure it is 5-6 dollars from nintendo and 8-10 dollars from MS and Sony since they also use the CPU. On atleast the MS and Nintendo front there had to be a lot of custom engineering to get the EDram and ESram to work and teams of engineers are not cheap and take way from other projects that can make money. On the Sony side there are rumors of added units added to the GPU pipeline. It is not like these are off the shelf designs they could sell cheap since there is no other work involved. I can only imagine the work to get the Move DMA units and ESram to work on the MS side. Even 10 dollars a machine is dirt cheap compared to the rest of the costs of the system. The hard drive will cost several times more even in bulk. I might even be low balling it and it could be closer to double that per machine and still be cheap.