[ Bloomberg ] AMD Facing Bleak Future

[turtile]

But isnt there a non-compete agreement with a lot of the engineers, at least higher level ones, that prohibit working for another company for a period of time after leaving a company, or are those illegal now?

Yes, but in states like CA, they are usually never enforced. If you make a living designing processors for a living, one company can't stop you from making a living in your field. On the other hand, they can still take you to court over it to try to ruin you at your new job and drain you financially.

 

[mrmt]

Well it's not like Intel is going to increase performance much over the next 5 years over the 2500k, we could see probably 15% speed increase and 35% power reduction over 5ish years.

It's not that bad though when you consider you can keep your rig for 8+ years and just upgrade GPU's.

Tablets become junk every two years. For servers, given the dramatic improvements of the last few generations, sometimes you can reach above breakeven territory by upgrading every year. Computing is evolving and Intel is fielding a lot of interesting things, it's just that desktop isn't a priority anymore.

All this makes it clear why AMD went fabless in the first place. Debt. The idea of more 'flexibility' and 'agility' to cut costs and select the fab was all smoke and mirrors...

Conroe pretty much killed AMD business model when it reached the market. AMD went from selling $1.000 processors to the sub-$300 almost overnight, in a moment they were drowning in debt they had to take to acquire ATI. Add to that the Barcelona snafu, which was extremely damaging to their server market share and revenue share and the result is that in 2008 they were well on its way towards bankruptcy. They sold their fabs because they could not afford to take more debt after the ATI acquisition, not because of flexibility and agility.

We can only wonder if instead of acquiring ATI they went for a merger with the company and instead invested 6 billion in foundry R&D and chip design.

 

[mrmt]

I still see some "enthusiasts" buying the FX line, but outside of that I almost exclusively see Intel, and when I see AMD it's in the worst possible way

FX is a toy, and a toy that is getting too old:

- Get this chip, spend hours overclocking the hell out of it, reach levels of performance that any mainstream Intel buyer gets out the box, sometimes not even that.

Yeah....

 

[NTMBK]

Tablets become junk every two years.

Last I heard, the tablet market was "crashing", and even iPad sales are down.

 

[III-V]

Last I heard, the tablet market was "crashing", and even iPad sales are down.

The market is saturated. I doubt it's actually crashing.

 

[NTMBK]

The market is saturated. I doubt it's actually crashing.

The quote in question was from a Best Buy CEO: http://recode.net/2014/07/30/exclus...-tablet-sales-are-crashing-sees-hope-for-pcs/

But yeah, I suspect he is overstating matters. Tablets are here to stay, but people won't be replacing them as frequently as the industry would like us to.

 

[Arachnotronic]

The quote in question was from a Best Buy CEO: http://recode.net/2014/07/30/exclus...-tablet-sales-are-crashing-sees-hope-for-pcs/

But yeah, I suspect he is overstating matters. Tablets are here to stay, but people won't be replacing them as frequently as the industry would like us to.

Agreed. The smartphone replacement cycle is a one-off stroke of good luck that I don't think will be repeated no matter how much, as you say, the industry would like us to

It's also funny seeing this focus around wearables as if those will fare any better than tablets, which are actually useful computing devices...

 

[NTMBK]

Agreed. The smartphone replacement cycle is a one-off stroke of good luck that I don't think will be repeated no matter how much, as you say, the industry would like us to

It's also funny seeing this focus around wearables as if those will fare any better than tablets, which are actually useful computing devices...

It's the same thing we've seen in the TV industry. There was one genuinely successful, amazing new tech, the flatscreen HDTV. It was just such a clear improvement over your typical 90s, 4:3 CRT television that basically everybody wanted one, and it drove a massive sales boom. The TV industry got a taste for that kind of growth and tried to reproduce it with 3D, then Smart TV, then 4K. Obviously none of them have been the same kind of success story.

The iPhone and Android boom was a similarly insane explosion in revenue, and the tablet and wearables pushes are the echoes of that explosion as tech companies try to recapture that magic.

 

[Arachnotronic]

It's the same thing we've seen in the TV industry. There was one genuinely successful, amazing new tech, the flatscreen HDTV. It was just such a clear improvement over your typical 90s, 4:3 CRT television that basically everybody wanted one, and it drove a massive sales boom. The TV industry got a taste for that kind of growth and tried to reproduce it with 3D, then Smart TV, then 4K. Obviously none of them have been the same kind of success story.

Yup! If you look at Samsung's financials you'll see that their consumer electronics division (i.e. TVs) operates at, more or less, break-even to slight profit. The TV business is just straight up awful.

 

[mrmt]

Last I heard, the tablet market was "crashing", and even iPad sales are down.

Even with sales down it is still a better affair than a commodity, low end desktop PC.

 

[dainthomas]

FX is a toy, and a toy that is getting too old:

- Get this chip, spend hours overclocking the hell out of it, reach levels of performance that any mainstream Intel buyer gets out the box, sometimes not even that.

Yeah....

The 8350 was so cheap on black friday that I had to get it. I needed to get a CPU, and it's performance is close to a similarly priced intel cpu.

This will probably be my last AMD CPU though. I won't be in the market again for another 2-3 years, and it's not looking like they'll have anything at that point. I'll hate to see what the price structure will look like with one company owning the desktop processor market.

 

[Shehriazad]

AMD just needs to keep on working on their APUs...CPU market...well...they have their last effort coming up with Zen...but let's be honest...at least for gaming the priority is shifting from CPU toward GPU quite a lot. And even DX12 is "a lot closer to the metal" than anything we ever had before as a mainstream API (disregarding Mantle).

I stand by my stance that SoCs/APUs are the future of gaming...and that AMD is once again just way too early to the party.

Im not sad to see AMD leave the CPU market...Im just scared that Intel will go insane again and make CPUs something that you will not be able to afford unless you're making fat stacks. (We all know that Intel loves making CPUs cost 1000$)


Also let's not forget that CPU is not the only income...the RX 300 GPU series is going to challenge Maxwell 900...and by the current looks of it the gloves are OFF. Plus AMD got their hands on 2nd generation Xbox 1 and PS4 chips already...and while that is only a bandaid...people love forgetting that the GPU and Console market exist...and while not perfect...they look a lot better than the CPU market.

 

[mrmt]

I'll hate to see what the price structure will look like with one company owning the desktop processor market.

How so? I don't think many people today are seriously considering swallowing AMD's trade offs, so in most cases Intel is competing against its own products, not AMD's. In other words, AMD is completely irrelevant for the current price structure, if AMD finally went out of the market today, prices wouldn't change too much.

 

[Arachnotronic]

Intel probably wouldn't change its pricing too much. Right now, the PC market isn't exactly booming, so if Intel drives up CPU prices too much, then people will just buy fewer of them.

The chip business is a volume game. Intel would simply offer compelling products at all price points to capture as much of the demand that it can. It needs to improve products at all tiers to convince people to buy new products over time.

 

[liahos1]

amd is like a slow motion implosion. its taken a couple of years but has been pretty consistent. I had a person I was interviewing come in 2 weeks ago pitching AMD as an investment. So when I asked what the thesis was a big part of it was they were getting into embedded with like 70% gm hahaha. was unbelievable.

 

[Shehriazad]

Well it's just funny how everyone keeps on talking about how AMD is doomed...but seriously...AMD and Intel both had multiple situations where it looked like they were about to disappear for forever.

And while AMD in the past few years never had the highest end CPU available...they can simply continue competing in the middle and low sectors as long as they make good products for that.

Sure Intel is ahead a few generations but quite honestly so what? That doesn't mean that AMD can't adapt to that situation.

Until I see the nail driven into the coffin I will just look at what AMD does.

If they deliver...I will buy their products...if they don't...well then I will have to buy something else.

But it would be nice to have SOME company go against intel in the Desktop market. I wouldn't even care if ARM or Samsung suddenly decided "Hey, let's try Desktop" as long as it's competetive.

I was always one to think that competition drives innovation...but that might just be my weird mind.

 

[hungtran]

The problem for AMD is Intel must keep their fabs running, so if tablet sales go down, Intel will be fully focused on gaining the low-end PC market with their mobile chips, even selling at breakeven just to keep fabs utilized. There is no way AMD can compete with that at the low end. So AMD must find a new niche in the mid-range, but the market is barbell shaped with lots of emphasis on price at the low end and performance at the high end. This leaves AMD in no mans land. I see the only way for AMD to find success again is to completely ditch the retail consumer business.

 

[mrmt]

And while AMD in the past few years never had the highest end CPU available...they can simply continue competing in the middle and low sectors as long as they make good products for that.

No, they can't compete on the middle and low sectors, that's why they have been losing share like mad.

But AMD won't disappear tomorrow, they still have their graphics IP to sell, plus the console contracts can be subject to a nice securitization package... but whatever is AMD's future iterations, I don't think they can afford to stay on the consumer market for much longer.

 

[Phynaz]

And while AMD in the past few years never had the highest end CPU available...they can simply continue competing in the middle and low sectors as long as they make good products for that.

Until they run out of money at least. You do realize they have been operating in the red for the last three years, right?

 

[MiddleOfTheRoad]

Since the launch of Bulldozer, AMD's revenue, profit, and balance sheet have deteriorated significantly.

Definitely not true....

Historically, the worst quarters for AMD's profitability were Q4 2002, Q2 2008 and Q4 2008.... None of which the Bulldozer architecture was around for.

http://ycharts.com/companies/AMD/profit_margin

AMD is in the best financial shape that its been in years. The cost cutting has worked well, they just need new product. The true dark days were probably circa 2008 -- the company's financial position is a lot more stable now.

 

[mrmt]

AMD is in the best financial shape that its been in years. The cost cutting has worked well, they just need new product.

I have a bridge that I really want you to look at it...

Sorry, couldn't resist, that just became my new sig.

 

[liahos1]

Definitely not true....

Historically, the worst quarters for AMD's profitability were Q4 2002, Q2 2008 and Q4 2008.... None of which the Bulldozer architecture was around for.

http://ycharts.com/companies/AMD/profit_margin

AMD is in the best financial shape that its been in years. The cost cutting has worked well, they just need new product. The true dark days were probably circa 2008 -- there financial position is a lot more stable now.

that is relatively speaking. with 938mln of cash (164mln of that came from the sale of their austin campus) and 2.2bln of debt they are not in great shape relative to other semi companies. i mean just take a step back. if they were in such great shape why is their stock price down 33% ytd while the SOXX is up 30%? pointing to 2008 is tough also because you had the financial crisis.

 

[Lepton87]

I imagine it will take a very very long time for games to utilize 16 threads on a Devils Canyon. For all we know we could be looking at 15 year lifespan on a motherboard these days. Assuming the capacitors and other stuff hold up that long?

Sure it will, first the games would have to make the Devils Canyon a 16 thread CPU. That's going to be hard to do. Out of the current Intel's desktop line-up only the i7 5960X supports 16 threads, the rest are 6core/12threads at most and Devils Canyon is a 4c/8t part.

 

[chrisjames61]

I have to just wonder what an evolution of Phenom II x 4/x6 would have been like on 32nm? Xtors capable of 5 Ghz coupled to a move to four wide front end (up from three wide) probably would have been pretty exciting. (With any luck we will see a return of this evolution).

Llano and it sucked.

 

[chrisjames61]

Well it's just funny how everyone keeps on talking about how AMD is doomed...but seriously...AMD and Intel both had multiple situations where it looked like they were about to disappear for forever.

And while AMD in the past few years never had the highest end CPU available...they can simply continue competing in the middle and low sectors as long as they make good products for that.

Sure Intel is ahead a few generations but quite honestly so what? That doesn't mean that AMD can't adapt to that situation.

Until I see the nail driven into the coffin I will just look at what AMD does.

If they deliver...I will buy their products...if they don't...well then I will have to buy something else.

But it would be nice to have SOME company go against intel in the Desktop market. I wouldn't even care if ARM or Samsung suddenly decided "Hey, let's try Desktop" as long as it's competetive.

I was always one to think that competition drives innovation...but that might just be my weird mind.

Intel has never looked like it was going to "disappear".