AMD Q414 results

[ShintaiDK]

would they need billions of revenue to be profitable and in the game?

To pay for the ROI and a better next project.

Why do you think AMD runs as it does now? Because the projects pay themselves?

 

[jpiniero]

To put it bluntly, K12 is a complete flop of a product if it doesnt create some kind of server ARM revolution that can get billion $ revenue figures.

The idea (hope?) is that they would be able to extend K12's potential beyond dense servers to win some semi-custom deals.

 

[mrmt]

The idea (hope?) is that they would be able to extend K12's potential beyond dense servers to win some semi-custom deals.

Then hope is a proper word, because the TAM for semi-custom is a fiasco.

 

[monstercameron]

To pay for the ROI and a better next project.

Why do you think AMD runs as it does now? Because the projects pay themselves?

hmm no need to be so demeaning. my question is whether they would need a world beater product and or make billions to be profitable. how does your inflammatory response address my questions?

 

[monstercameron]

Then hope is a proper word, because the TAM for semi-custom is a fiasco.

what is your assessment of the semi custom tam? are there any sources to go along with that?

 

[mrmt]

what is your assessment of the semi custom tam? are there any sources to go along with that?

My assessment is that semi-custom beyond the consoles is almost a no go because semi custom doesn't add enough value to offset the extra costs over off the shelf parts, and the real value-adding features come from software, not hardware.

 

[elemein]

My assessment is that semi-custom beyond the consoles is almost a no go because semi custom doesn't add enough value to offset the extra costs over off the shelf parts, and the real value-adding features come from software, not hardware.

I don't totally agree. Semi-custom beyond consoles isn't a no-go.

Now, making profit margins that are more than "yeah they're good enough to keep the department alive"? Mm... Not so sure.

 

[mrmt]

I don't totally agree. Semi-custom beyond consoles isn't a no-go.

If semi-custom isn't a no-go, why aren't the customers lining up at AMD to buy these kind of chips?

 

[elemein]

If semi-custom isn't a no-go, why aren't the customers lining up at AMD to buy these kind of chips?

Because there are better options out there for the given pricepoint.

Oh... D: Disregard. :whiste: I'm not as dim as I seem. I think.

 

[cbn]

I wonder how close the die layout on the K12 server will be to Seattle?

And how affordable will they be?

P.S. According to this article, Seattle has 4MB L2 cache and 8MB L3 cache. Thats a lot of cache. In contrast, Avoton has just 4MB L2 cache. (I'm obviously concerned most about the size of the Seattle's L3 cache as well as its performance.)

 

[mrmt]

And how affordable will they be?

P.S. According to this article, Seattle has 4MB L2 cache and 8MB L3 cache. Thats a lot of cache. In contrast, Avoton has just 4MB L2 cache. (I'm obviously concerned most about the size of the Seattle's L3 cache as well as its performance.)

Large caches can also mean poor performance of the IMC or even of the cache itself.

 

[cbn]

You mean the 3/4 module APU with tiny iGPU NTMBK mentioned in post #301?

Here are a few factors to consider:

1.) Will Zen be late or on time?
2.) Will Zen be a true desktop performance CPU or something optimized for mobile?
3.) What die configurations will Zen come in? (iGPU less, with tiny iGPU or with large iGPU?)
4.) How soon could AMD ready a 3/4 module APU with tiny iGPU? (I personally would want the die to be based on 3 module APU with tiny iGPU for desktop.)
5.) How does AMD handle the WSA commitment in order to make big cores based on smaller die (ie, tiny iGPU) an incentive? Right now, as has been mentioned in previous posts AMD is paying for wafers they don't need anyway.

My bets:

1) Zen will be more or less on time, can be delayed a little or coming early a little. AMD CPU division spent a big part of its resources fixing the original Bulldozer performance, increasing the IPC of the processors three times over the five years of Bulldozer cycle(2011-2015);

2) I bet AMD is making something that can substitute both Jaguar/Puma and K10/Bulldozer line of processors with Zen, i expect a core that is a mid-term on this(With decent IPC this time);

3) The same die configurations as Kaveri is being sold. Maybe a MOOOOOAR CORZZ version can land at servers;

4) Six cores will not help. The best approach for 100 percent(yes, i'm including enthusiast users) of desktop PCs is 4 cores at max(The Intel's approach);

5) I pass on this, i don't have a well developed opinion on this.

Regarding #4, I think six cores (Example: 3M Steamroller with tiny iGPU) would help tremendously.

Here are at least two reasons:

1. OC Pentium G3258 is too strong against OC Athlon x4 860K according to the tests here and here A 4.7 Ghz G3258 beats 4.5 Ghz Athlon x4 860K in 13 out of 15 games.

4.7 Ghz G3258 also beats 4.7 Ghz FX-6300 in 8 out of 15 games (but the major differences here is that when the FX-6300 won it wasn't by a small margin. This gives the FX-6300 an actual niche compared to athlon x4 860K)

2. With a hexcore based die the chances of yielding an AMD dual core (which isn't worth much to enthusiasts) is very small. Instead we could expect only quad core and hexcores to be in the mix for a hexcore based die.

P.S. While a person might also make the claim that having four slower cores is better than two faster cores (ie, OC pentium) to reduce stuttering in certain games, I didn't see too much of that favoring Athlon in the Tom's hardware tests. There was one game Thief where the Athlon x4 750K did much better than G3258, but we have to remember that was a very new game at the time and drivers could be a culprit. We also have to consider the very high detail settings and high end Nvidia Video card used in testing are not typical conditions encountered by the average budget user.

 

[Idontcare]

Take the "golden parachute" and resign.

I'm not IDC and I don't even play him on internet TV, but if he's as shrewd as he seems, he would devote most of that substantial/moderate/insignificant R&D budget to developing a negentropy generator - then complete his thermodynamic trifecta metaphor and ask the BoD for a huge bonus. Then quit and retire to his overclocking negentropy lab where the higher the clock, the lower the temps - without delidding!

I like the concept, merely involves time reversal. How hard can it be?

There was a small snafu in the last Q&A that some investors took note:

Lisa Su implied that R&D would be mostly spared of the cuts, but what we saw in Q414 is completely the opposite, SG&A was more or less intact while R&D fell 15%. This was completely the opposite of what everyone was expecting. The last round of cuts will bring their R&D expenses to a range of 900-950MM, or almost 50% smaller than Nvidia R&D budget. Not a good prospect for the execution of the previous pipeline.

On top of that Lisa raised the issue of the channel problems they were facing, which will take two quarters to fix up. It seems that AMD was reaching its sales forecast at the expense of stuffing the channel with products they knew they wouldn't be able to sell at all, and now the channel is throwing up everything back to AMD. It is no small problem, that's were the 200MM in WSA chips not ordered went and AMD will need two quarters to clean up the mess, half a year worth of chips flying around. No wonder Rory was fired.

It also changes everything regarding their discourse of improving the product mix: AMD wasn't improving its product mix, it wasn't unable to sell to the channel, hence the business shrank and the OEM share (which has higher ASP) became more representative. A failure being portrayed as a success.

Those snafus also raises questions about the credibility of the BoD. Is what they saying really what they mean? Do they know what they are saying or are they deliberately misleading them? Not a good start for Lisa Su.

While Lisa seems to have the stage presence that Rory lacked, it seems like they are working from same script when it comes to something always being amiss, somethings are never just quite right and it leaves one with a nagging suspicion that bad news is being sugarcoated and glossed over.

Hey IDC, I'm going to put you on the spot. I'm really interested in what you think the answer is for AMD.

Monday morning you're President, CEO and Chairman of AMD. What's your strategy?

Thanks!

AMD should be years ahead of Nvidia right now.

They started with a deeper history of developing large complex IC's, broader and deeper channel relationships, and zero business degrees of separation between their process technologists and their IC design engineers.

And from that headstart over Nvidia, they added ATI to the mix. A move which should have seen design synergies in the graphics side which ought to have propelled the graphics division head-and-shoulders above Nvidia's efforts. Not to mention the benefits it should have brought to the CPU design side of their business.

Instead, they have completely squandered their advantages and the headstart they once held over Nvidia, and have now contracted to the point where they aren't even funding future project development to the tune that Nvidia is.

Nvidia is proof to everyone that there exists a viable business model in graphics and ARM on the revenue scale that AMD should be able to compete and partake. AMD not only should be able to partake to the tune that Nvidia is, but AMD really out to have dominated Nvidia in every segment that Nvidia has played in. That AMD has not to-date is their legacy.

But on day one as CEO the first thing I'd do is assemble a task-force to identify what we (AMD) aren't doing that they (Nvidia) are doing. And if the best I can convince the team to do is perform at a "me too" level against Nvidia (taking their lead, ala Samsung to Apple) then at least we'll know that a viable market exists (because the market leader is defining it for us) and perhaps someday we'll cycle out enough old blood in management, bring in enough new blood, and we'll see ourselves one-upping Nvidia in ways that will build the business to give a solid financial footing.

From there, and only then, can we allow ourselves to become distracted with risky divestiture efforts.

It isn't an inspiring plan, to basically tell people you are going to shadow Nvidia for a while until you can get to the point of being able to stand on two feet again, but the alternative appears to involve a lot of floundering and efforts to define a market space for themselves for which they simply don't have the R&D dollars to compete in.

 

[ClockHound]

Good plan, IDC, if not as inspiring as the time reversal option - which would be really handy, if your first day on the job was Jan. 25, 2005.

It's unfortunate for AMD as they appear to believe they are still competing with Intel AND Nvidia. How hard can that be?

 

[AtenRa]

But on day one as CEO the first thing I'd do is assemble a task-force to identify what we (AMD) aren't doing that they (Nvidia) are doing. And if the best I can convince the team to do is perform at a "me too" level against Nvidia (taking their lead, ala Samsung to Apple) then at least we'll know that a viable market exists (because the market leader is defining it for us) and perhaps someday we'll cycle out enough old blood in management, bring in enough new blood, and we'll see ourselves one-upping Nvidia in ways that will build the business to give a solid financial footing.

I believe they already have found what they have to do,

Enterprise, Embedded and Semi-Custom segment primarily includes server and embedded processors, dense servers, semi-custom System-on-Chip (SoC)
products, development services and technology for game consoles.

Enterprise, Embedded and Semi-Custom.

2013
Net Revenue = 1577M
Operating Income = 295M

2014
Net Revenue = 2374M
Operating Income = 399M

 

[Arachnotronic]

I believe they already have found what they have to do,

Enterprise, Embedded and Semi-Custom.

2013
Net Revenue = 1577M
Operating Income = 295M

2014
Net Revenue = 2374M
Operating Income = 399M

I wonder how much of that operating leverage comes from recycling IP/cores that Computing and Graphics pays the R&D cost for.

 

[AtenRa]

I wonder how much of that operating leverage comes from recycling IP/cores that Computing and Graphics pays the R&D cost for.

Only from the Graphics department.

 

[Enigmoid]

Only from the Graphics department.

Cat cores in console chips?

The CPU design from the console chips are cut and paste 4 core jaguar modules connected by a bus.

 

[AtenRa]

Cat cores in console chips?

The CPU design from the console chips are cut and paste 4 core jaguar modules connected by a bus.

Yea forgot about that, you are right

 

[ShintaiDK]

I wonder how much of that operating leverage comes from recycling IP/cores that Computing and Graphics pays the R&D cost for.

More or less everything. It will be interesting to see how it goes as the computing and graphics division keeps plummeting. Can the semicustom actually pay for R&D on its own to keep it going for future designs? As it stands today, the R&D would still have to be significantly reduced.

 

[mrmt]

While Lisa seems to have the stage presence that Rory lacked, it seems like they are working from same script when it comes to something always being amiss, somethings are never just quite right and it leaves one with a nagging suspicion that bad news is being sugarcoated and glossed over.

I know we shouldn't blame dishonesty when incompetence suffices as an explanation, but those last two blunders really raises questions. Why Lisa didn't say that R&D would be the real targets of the cuts but instead hinted that R&D would be spared of the cuts? It's outright dumb to do it, because R&D is a metric that AMD used to publish every quarter, so that cat would get out of the bag in the next Q&A the way it did.

And how could AMD sales force stuff the channel the way they did? Was it an internal control failure, where managers and salesmen stuffed the channel in order to keep bonus and commissions in place, or did AMD BoD ordered it in order to achieve the sales forecasts?

It isn't an inspiring plan, to basically tell people you are going to shadow Nvidia for a while until you can get to the point of being able to stand on two feet again, but the alternative appears to involve a lot of floundering and efforts to define a market space for themselves for which they simply don't have the R&D dollars to compete in.

Depending on how you define "inspiring" your plan rocks. Is it more inspiring than competing against Intel on the server forefront? Probably not. Is it more inspiring than designing "semi-custom" low cost NAS chips on lagging edge nodes? probably.

This kind of plan would allow AMD to stay on the bleeding edge and still allows them a shot to make money dependent only of their execution. It's a completely different approach when compared to semi-custom, where there is no proven market at all beyond the console chips.

 

[mrmt]

I wonder how much of that operating leverage comes from recycling IP/cores that Computing and Graphics pays the R&D cost for.

Semi-custom pays basically for the design and validation. The IP comes from the computing and graphics segment. Semi-custom is a complementary revenue stream to the CG, it is a way to improve the returns of a given developed IP, but by no means it is a substitute for CG revenue.

Every $100 in revenue from CG used to give $40-$45 to spend in R&D and pay for expenses, every $100 from Semi-custom only gives $15-$17, and with CG you have to keep your R&D cells always working because of the short product cycle. Semi-custom OTOH you need to be getting customers all the time otherwise your R&D cells will cool down because of the longer product cycle.

 

[positivedoppler]

Rumor this morning that a chinese company blx is trying to buy amd

 

[Arachnotronic]

Rumor this morning that a chinese company blx is trying to buy amd

Ah, I guess the world's given up trying to promote a Samsung buyout?

 

[hungtran]

This kind of rumor actually sounds more credible than Samsung/Intel. So off the wall. If true, I wonder if there will be a bidding war.