AMD Q414 results

[pablo87]

And why did they have to rush to sell their assets to Globalfoundries the way they did?

ATI was not the problem. Had they left it alone, it would have generated near $200M of cash annually not including any inter co revenues from APU's (or the potential of Adreno - not going there since I'm a Qualcomm s/h - but to buy something for 5.2 and sell the highest potential biz for 1% of that falls under stupid).

AMD paid $5.2B of which $4.2B was cash. ATI already had near cash of $700MM (current assets less current liabilities) so really it was $3.5B which is certainly highly leveraged to have $200MM of cash to service but then you're supposed to raise equity/debt, cut costs, etc... which of course they didn't do.

 

[AnandThenMan]

And don't even start with the x86 license is not transferable nonsense. If Intel tries enforcing that, they'll end up with billions in anti-trust fines, and still be forced to license it, possibly to everyone and on FRAND terms. They won't touch that hornet's nest with a ten foot pole.

Not sure I follow, Intel is within their legal rights to enforce the license AMD signed. What anti-trust argument could be made exactly when it is AMD, the apparent victim if Intel legally enforces the contract, that AMD themselves agreed to.

I don't see any anti-trust action on the part of Intel at all, it's not Intel's fault that enforcing said contract would hurt any company that buys AMD.

 

[NTMBK]

Surprisingly, the stock is up slightly in after hours trading after the earnings report. I think a bad report had already been factored in.

Or they're pricing in odds of an acquisition :\

 

[ninaholic37]

Without AMD's x86-64 license, Intel si done.

I've had around 20 laptops and none used 64-bit. Not that I would ever need Itanium either though

 

[senseamp]

Why would Qualcomm want to make x86 chips. Its directly against their business concept. Not to mention all the cash they need to spend for it to make it competitive.

Same reason Intel is entering mobile and LTE business and getting on Qualcomm's turf.
Companies like Intel and QCOM already have dominant position in the markets they are in, they need to enter new markets to grow. If you are a CEO of such company, getting paid tens of millions of dollars, you better have an answer to shareholders on how you plan on growing your business enough to justify your compensation, and this is as good of an answer as Qualcomm may have.
x86 opens up new markets like Windows desktops, workstations, and servers to QCOM. For QCOM, the cash to make it competitive is well within their abilities, and reasonable when compared with potential pay off.
Qualcomm also likes to license IP, and buying AMD will give them a lot of new graphics IP to license in addition to their CDMA IP.

And you dont have to buy a company to get employees.

No, but you do buy it to get the team, the institiutional knowledge, the processes, and the flows to architect, prototype, verify, layout, and productize complex chips. It's like buying a move in ready house, vs buying some concrete and lumber at Home Depot. Same materials, but not the same thing.

 

[AnandThenMan]

No, but you do buy it to get the team, the institiutional knowledge, the processes, and the flows to architect, prototype, verify, layout, and productize complex chips. It's like buying a move in ready house, vs buying some concrete and lumber at Home Depot. Same materials, but not the same thing.

Very well said. It's very very silly (at best) when people say well AMD didn't need to purchase ATI just license the needed IP and all is well. Not even Intel was able to make this work effectively in graphics and they have near unlimited resources.

 

[senseamp]

Not sure I follow, Intel is within their legal rights to enforce the license AMD signed. What anti-trust argument could be made exactly when it is AMD, the apparent victim if Intel legally enforces the contract, that AMD themselves agreed to.

I don't see any anti-trust action on the part of Intel at all, it's not Intel's fault that enforcing said contract would hurt any company that buys AMD.

Anti-trust law takes precedence over private contract between parties. If they withhold x86 license from the other competitor in x86 space, I don't envy them. Even if they can give enough "speech" to US politicians to get DOJ off their backs, they will still have to get through European and Chinese ones. It's a fool's errand.

 

[pablo87]

They didnt buy back any debt technicaly speaking, they refinanced it, meaning getting lower interests rates for future payements.

You may be right as now I can't find where they stated they bought LTD under 100 cents on the dollar with available cash.

 

[AnandThenMan]

No. There are far easier ways to get a GPU technology than 5.5B$ down the drain.

Like what? Remember this? That's what happens when you think you can go your own way and reinvent the wheel instead of acquiring a company that already has what you need.

 

[CHADBOGA]

Without AMD's x86-64 license, Intel si done.

Intel won't be losing the x86-64 license, irrespective of what happens to AMD.

 

[AnandThenMan]

Anti-trust law takes precedence over private contract between parties. If they withhold x86 license from the other competitor in x86 space, I don't envy them. Even if they can give enough "speech" to US politicians to get DOJ off their backs, they will still have to get through European and Chinese ones. It's a fool's errand.

I guess I simply don't have much faith in the regulators. Intel was in hot water awhile back with the DOJ but nothing at all came of it. Intel profited greatly from their monopoly practices and didn't get so much as a slap on the wrist.

 

[Phynaz]

Wow, the vitriol in this thread. The AMD fans sure are taking this one hard!

I imagine they are showing their frustration because it's undeniable what the future holds for AMD, and it isn't success.

 

[pablo87]

Without AMD's x86-64 license, Intel si done.

AMD got a license from Intel because IBM wanted a 2nd source. Otherwise, AMD would not have it. There is plenty of competition from non x86 nowadays, its no longer necessary to license for anti trust reasons. If DOJ can approve having 2 hard drive and 3 memory vendors, they certainly can approve 2 processor vendors one of which licenses its designs ultra cheap to anyone. So IMO, AMD is wholly dependent on Intel's goodwill here.

And to my overall point about AMD's retreat to GPU, if Intel is inclined to continue licensing x86 to AMD, ATI's graphics IP will have more to do with that than x86-64.

 

[AnandThenMan]

Wow, the vitriol in this thread. The AMD fans sure are taking this one hard!

Any fan of technology and competition should be taking this hard. Why would you draw the line to only include "AMD fans"? Are you an "Intel fan" that doesn't care if there is no competition in a market that makes products you buy?

 

[Phynaz]

I guess I simply don't have much faith in the regulators. Intel was in hot water awhile back with the DOJ but nothing at all came of it. Intel profited greatly from their monopoly practices and didn't get so much as a slap on the wrist.

Yay, a slide, that must make it true and official.

Btw, monopolies aren't illegal.

 

[Phynaz]

Any fan of technology and competition should be taking this hard. Why would you draw the line to only include "AMD fans"? Are you an "Intel fan" that doesn't care if there is no competition in a market that makes products you buy?

I'm a fan of well run businesses.

 

[Idontcare]

Qualcomm (my guess) will buy them, IMO. The question is for how much, and before, during, or after bankruptcy. You don't come across a good CPU design team (by SOC vendor standards), a good GPU design team, loads of patents, and an x86 license that often.
And don't even start with the x86 license is not transferable nonsense. If Intel tries enforcing that, they'll end up with billions in anti-trust fines, and still be forced to license it, possibly to everyone and on FRAND terms. They won't touch that hornet's nest with a ten foot pole.

Prior to being bought out by Oracle, I was personally expecting SUN to buy AMD. It might make sense for Oracle to buy AMD for the same business arguments they made in support of buying SUN.

Being acquired by Qualcomm makes sense too, but in an entirely different way. Any argument that could be made for Qualcomm buying AMD is an argument that could be made for Apple buying AMD in my opinion.

More interesting though would be the case where ARM bought AMD and negotiates (with government insistence/assistance) the licensing ability from Intel to do to x86 what ARM has done to ARM.

 

[ShintaiDK]

Same reason Intel is entering mobile and LTE business and getting on Qualcomm's turf.
Companies like Intel and QCOM already have dominant position in the markets they are in, they need to enter new markets to grow. If you are a CEO of such company, getting paid tens of millions of dollars, you better have an answer to shareholders on how you plan on growing your business enough to justify your compensation, and this is as good of an answer as Qualcomm may have.
x86 opens up new markets like Windows desktops, workstations, and servers to QCOM. For QCOM, the cash to make it competitive is well within their abilities, and reasonable when compared with potential pay off.
Qualcomm also likes to license IP, and buying AMD will give them a lot of new graphics IP to license in addition to their CDMA IP.

No, but you do buy it to get the team, the institiutional knowledge, the processes, and the flows to architect, prototype, verify, layout, and productize complex chips. It's like buying a move in ready house, vs buying some concrete and lumber at Home Depot. Same materials, but not the same thing.

Why do you think everyone left x86? Because there was money in competing with Intel?

In terms of MPU revenue. Qualcomm is still a tiny midget compared to Intel.

The graphics IP is the main and perhaps only real asset left in AMD. But I am sure Qualcomm got what it wanted the last time. And that was cheap.

 

[AnandThenMan]

Yay, a slide, that must make it true and official.

So you have nothing to counter it except it must not be true because it's "a slide".

I'm a fan of well run businesses.

You dodged the question completely, we are all fans of well run businesses. But to that point, companies that enjoy long term monopolies often become very poorly run it's the nature of the free market and the competitive effect.

More interesting though would be the case where ARM bought AMD and negotiates (with government insistence/assistance) the licensing ability from Intel to do to x86 what ARM has done to ARM.

Intel would fight to their last penny to prevent this.

 

[RussianSensation]

Wow, the vitriol in this thread. The AMD fans sure are taking this one hard!

I imagine they are showing their frustration because it's undeniable what the future holds for AMD, and it isn't success.

It's easy to be frustrated for brand agnostic PC gamers seeing how most of the market is paying $80-100 for nearly identical performance in a 970 and $250-300 extra for a 20% faster 980 over a $250 290X.

When there is a mounting defense against the instant disappointment that is the $200 960 2GB, when Core i5/i7 overclocked users are grasping for straws about 80-100W GPU power usage differences, when people think a 300W GPU will be a fail by not taking into account perf/watt metric, when hybrid WC is spun as an inferior tech over air cooling, etc.

It's hard to defend AMD CPUs but what's been happening on the GPU side is nearly impossible to explain unless most PC gamers simply could care less about price/performance when it comes to AMD products vs. NV, or don't read reviews and have been completely brain-washed by the media regarding all AMD cards running hot and loud.

Also, not sure why you and some other posters keep cheering for AMD's failure and doom. You think Intel and NV will release products as fast and at competitive prices? Look at what happened in the CPU space after Phenom II - crazy slow progress. How much better are 4690K/4790K OC vs. 2500K/2600K OC? Pathetic progress in CPUs!

Why would we want this on the GPU side? :hmm:

I guess I am seriously missing something because when AMD cards were free due to bitcoin mining, NV users still passed on them. That's the true definition of fanboism when you'd rather pay $ instead of getting a competitor's product for "free" and it made you $ too.

Oh well, I could care less about popularity/market share and so on. Even if AMD desktop GPUs become just 5% of the total market, as long as the performance and price/performance is there, I'll keep buying them unless NV stops charging crazy high premiums. If AMD goes bankrupt, I am pretty sure NV will maintain prices even longer and relax its release schedule, ultimately hurting us PC gamers. I mean look what NV did without competition with $650 280, $650 780, $700 780Ti, $1000 Titan, and $3000 Titan Z. There is no way 970 would have cost $330 had it not been for the competition from R9 290/290X. I am all for competition and I don't want an Intel/NV monopoly like some people in this thread who constantly bash all things AMD.

 

[Redentor]

Intel won't be losing the x86-64 license, irrespective of what happens to AMD.

Intel = x86 and AMD = x86-64 (it's just a set of instructions, and AMD is the owner)

The new buyer of AMD can forbid the use of x86-64 to Intel.

 

[GreenChile]

Anti-trust law takes precedence over private contract between parties. If they withhold x86 license from the other competitor in x86 space, I don't envy them. Even if they can give enough "speech" to US politicians to get DOJ off their backs, they will still have to get through European and Chinese ones. It's a fool's errand.

All this talk of x86 patents is patently false. Unless I am grossly misunderstanding the patent legalese, they are only valid for a max of 20 years. So the basic x86 patents should already be available to anyone in this regard.

However modern CPUs have evolved far beyond the limits of basic x86 IP and any company wishing to compete in this arena would need licensing to most of Intel's IP portfolio, which is why Intel and AMD have cross license agreements.

Your vision of the world's justice departments dropping the hammer on Intel for not giving their portfolio away to anyone who asks for it is laughable. Do you see them going after other companies for not licensing their IP? Hint: think Apple. Besides there are many other CPU architectures out there. x86 is not the only one.

Also, I have read through an old cross license agreement between Intel and AMD and there are clear provisions for in the event one company goes out of business, bankruptcy, or is bought out. In the event AMD goes poof Intel will still retain full use of their licensed patents and any buyer will be forced by law into a reasonable license agreement with Intel. So this talk about Intel losing the 64 bit license is not realistic.

I fully expect Intel would not hesitate to enter into another cross license agreement with an AMD buyer but it would have to be to Intel's benefit. It is unlikely it could be forced upon them as you imply.

 

[Enigmoid]

So you have nothing to counter it except it must not be true because it's "a slide".

Perhaps because nothing else is required?

Like maybe a source?

 

[GreenChile]

Intel = x86 and AMD = x86-64 (it's just a set of instructions, and AMD is the owner)

The new buyer of AMD can forbid the use of x86-64 to Intel.

Wrong. This would not be legal.

 

[Redentor]

So this talk about Intel losing the 64 bit license is not realistic.

I fully expect Intel would not hesitate to enter into another cross license agreement with an AMD buyer but it would have to be to Intel's benefit. It is unlikely it could be forced upon them as you imply.

Intel has its own set IA-64, so the new AMD owner, if it has enough money, can forbid the use of x86-64 to Intel.