The end of AMD

[videoclone]

*Talks of CEO Hector Ruiz resignation.

*Mounting debt and running at a loss each quater

*CPU range is uncompetitive at all level's with no real replacement for 2-3 years.

*GPU's do not complete with there equally priced competition.

*AMD is having problems with 65nm, they'll struggle with even more leakage on 45nm, particularly without the Halfnium High-K dielectric gates Intel has incorporated. not until the second gen 45nm will they have High-k

*Add to that Intel's Nehalem architecture (with an integrated memory controller, matching AMD's final advantage over Intel) due out in 12 months, and AMD is toast.

Buh Bye realistically priced processors, Hello small future gains in performance and a grinding holt to the PC industry, especially in GPU's and how fast they advanced )

Sad days are in our future and Intel is to blame for holding AMD down long enough with bribes and blackmail until they released a superior product.

 

[bryanW1995]

this has been rehashed for the past 6 mos with. I agree with a lot of what you said, but you need to check out the gpu's. 3870 looks to be a very strong competitor and is very reasonably priced. I don't think that gpu's will save amd, but they might help it keep afloat long enough to get to bulldozer.

 

[Lonyo]

There is no equally priced competition on the GPU front, unless you can find me a $220 8800GT.
ATi's offerings perform worse and are priced lower than those of nVidia, which is exactly how they should be priced.

 

[Bigbassfrank]

Originally posted by: bryanW1995
this has been rehashed for the past 6 mos with. I agree with a lot of what you said, but you need to check out the gpu's. 3870 looks to be a very strong competitor and is very reasonably priced. I don't think that gpu's will save amd, but they might help it keep afloat long enough to get to bulldozer.

I think BryanW1995 has a good point..This New GPU does have its nitch unless they can deliver a lower priced GeForce (8800) in the 200 range..

bbf

 

[SickBeast]

Originally posted by: videoclone
*Talks of CEO Hector Ruiz resignation.

That's actually a reason why AMD *will* stay in business.

 

[SlowSpyder]

Why would Hector Ruiz resigning be a bad thing? That seems to be a positive.

True.

I'd let Phenom mature a bit before I call it 'uncompetitive at all levels'. They may be able to get speeds up and compete the same way they do now with the 38x0 series of cards.

The 3870 is competitive with Nvidia's $220ish offerings... there aren't any $220 offerings from Nvidia? 8800GT's all seem to be $260+. This could change if the 8800GT 256 performs well though.

Let's see how Phenom ramps before we panic.

The integrated memory controller is nice, but as the C2D showed, you don't 'need' it.

Things could certainly look better for AMD, but I think we'll be able to tell a lot over the first half of next year... just my $.02

 

[Zoomer]

You don't need it if you have tons of fab capacity to integrate insane amounts of cache on die.

AMD just got started on their enterprise run; their products should also do well being sold as office machines.

 

[Acanthus]

Ruiz leaving the company is the best thing that could happen to AMD.

Investors have been calling for a "regime change" at AMD for quite a while now.

 

[Mana]

I doubt AMD will go down, they've fallen on hard time sure, but there are a lot of very big companies that have a vested interest in keeping AMD alive.

That and remember, we are enthusiasts, which are a very small segment of the market. AMD's X2 processors are still selling well enough, and if they can fix the current issues with the chip and fab process I'm fairly sure they'll be able to get more than enough OEM contracts to stay in business.

 

[SerpentRoyal]

AMD will survive because most people don't need bleeding edge performance. The company will continue to do well in the low to mid range CPU offerings.

 

[SickBeast]

I'm starting to think AMD *will* go down.

They have no money.

Their profit margins are terrible.

Everything they've engineered over the past couple of years has been *late* and *slow*, forcing AMD to cut prices and lose money.

They have Fusion and maybe 45nm to look forward to, but intel will surely have an answer to both. Not only that, but I would rather a 'C2D' derivative in my future CPU instead of a 'Phenom' derivative.

Perhaps they have indeed survived worse before, and hopefully they knew what they were getting into with the ATi acquisition. Time will tell...

 

[Keysplayr]

While it's easy to dismiss the possibility of AMD going under, being bought out, other, some folks just don't believe that it's even possible for AMD to go under. I don't know if they say things like "Stop crying doomsday" because they can't "fathom" the possibility.
What if, just what if, this is one of those times where it will happen? Just like that. Overnight door closing before stockholders are left with nothing? Or a takeover/buyout? Nobody seems to think these things are even remotely possible, probably because it would be too big of a shock to them. Well, I don't know any better than the next guy, but in my eyes, AMD is in terrible peril. Losing in the neighborhood of 1/2 of a billion dollars per quarter for the past 4 quarters while having a debt that is approximately equal to it's market cap. Holy Moly...

I'm not crying doomsday, but in no way shape or form do I think that this can't happen. The way things look now, especially with Phenom's release, I'd say it's more than likely to happen. But what do I know.

 

[Munky]

Originally posted by: SickBeast

Originally posted by: videoclone
*Talks of CEO Hector Ruiz resignation.

That's actually a reason why AMD *will* stay in business.

I was just thinking the same thing. And the 38xx video cards are competitive... in fact, the 3850 wipes the floor with any last gen high end card, nevermind the feeble 8600gts.

 

[Viditor]

Originally posted by: videoclone
*Talks of CEO Hector Ruiz resignation.

What difference does that make?

*Mounting debt and running at a loss each quater

Debt is actually reducing, not mounting...Q3 is down $200 Million from Q2. Also, since the Q3 report, AMD has increased their cash by 50% without increasing their debt (that's not counting sales of course).

*CPU range is uncompetitive at all level's with no real replacement for 2-3 years.

And yet sales are increasing...

*GPU's do not complete with there equally priced competition.

That's just wrong...

*AMD is having problems with 65nm, they'll struggle with even more leakage on 45nm, particularly without the Halfnium High-K dielectric gates Intel has incorporated. not until the second gen 45nm will they have High-k

In what way is AMD having problems with 65nm? They have no real leakage issues now, so what makes you think it will be worse?

*Add to that Intel's Nehalem architecture (with an integrated memory controller, matching AMD's final advantage over Intel) due out in 12 months, and AMD is toast.

You are assuming that:
1. CSI chips will come out perfect and on time
2. CSI platforms will come out perfect and on time
3. AMD will have no meaningful changes between now and then

Buh Bye realistically priced processors, Hello small future gains in performance and a grinding holt to the PC industry, especially in GPU's and how fast they advanced )

Sad days are in our future and Intel is to blame for holding AMD down long enough with bribes and blackmail until they released a superior product.

IMHO, that's never going to happen...in fact, because CPUs are becoming more and more commoditized, I predict that in 5 years we'll be seeing computer systems much faster than today's selling for $200 or so.

Edit: BTW, you are also forgetting that there is a lawsuit going to court very soon with a damages possibility that could range as high as $60 Billion. It probably won't get that far, but most analysts are still expecting a settlement from Intel in the range of $4 Billion or so...
That would make AMD just about debt free.

 

[Zenoth]

AMD isn't doing well only since Core 2 appeared.

Before Core 2 it was VERY difficult to recommend a Intel processor especially for gaming, which concerns most of us here. Some people here have very short-lived memory. Intel certainly did NOT liked K8 before it had Core 2 to demolish it, and K8 lasted very long before Intel could react properly.

 

[Viditor]

Originally posted by: keysplayr2003
While it's easy to dismiss the possibility of AMD going under, being bought out, other, some folks just don't believe that it's even possible for AMD to go under. I don't know if they say things like "Stop crying doomsday" because they can't "fathom" the possibility.
What if, just what if, this is one of those times where it will happen? Just like that. Overnight door closing before stockholders are left with nothing? Or a takeover/buyout? Nobody seems to think these things are even remotely possible, probably because it would be too big of a shock to them. Well, I don't know any better than the next guy, but in my eyes, AMD is in terrible peril. Losing in the neighborhood of 1/2 of a billion dollars per quarter for the past 4 quarters while having a debt that is approximately equal to it's market cap. Holy Moly...

I'm not crying doomsday, but in no way shape or form do I think that this can't happen. The way things look now, especially with Phenom's release, I'd say it's more than likely to happen. But what do I know.

I can certainly fathom the possibility, but barring a natural disaster, the numbers say it just can't happen.
Mind you, AMD has just gone through a year long "Perfect Storm", and it sure has been ugly.
What's hard for most people to understand is that AMD could post a loss every quarter for another 20 years and still be making a profit and doing fine...
I know that's counter-intuitive, but it is how accounting works.

 

[Aiden]

For most mainstream users, the 3850/3870 are a much more attractive option then the 8800GT , just due to price difference alone. yes prices will most likely fall on the 8800GT but by how much is the real question. The 8800GT 512mb should be selling around 200-230$, but at 230$ for alot of people its going to be to much to pay.Since prices should fall on the 3850/3870 cards as well, they still have the price/preformance advantage over the GT. This makes them a more attractive option for OEM's and large scale builders like HP etc. In addition if the r700 ends up on a 45nm design, that might mean that ATI might end up with a Preformance card that can compete and be aggressively priced at the high end in 2008. AMD is not going to go under, there are to many major companies/entities who will not want to see it happen. In addition on the GPU front, it isnt like nvidia is going to post blistering sales this quarter. The introduction of the 8800GT pretty much obliterated all of nvidias GPUS at the 200+ price point. WIth the lack of cards available ,the enthusiest market is going to wait, or look at other alternatives like the 3870.

 

[TekGmr]

I'm not sure it's as simple as AMD creating inferior products. I think AMD started growing a little faster than expected and now managing that growth may have become difficult. Look at what Intel did before they made their big comeback .... They had launched company-wide reform. Mabye AMD needs to look into launching a little reform of their own to minimize operating cost.

 

[AlabamaCajun]

I agree, that's true, AMD is not producing and inferior product as much as Intel has just produced a better one. Some of us do prefer AMD just for what it's worth.

 

[rchiu]

Originally posted by: Viditor

Originally posted by: keysplayr2003
While it's easy to dismiss the possibility of AMD going under, being bought out, other, some folks just don't believe that it's even possible for AMD to go under. I don't know if they say things like "Stop crying doomsday" because they can't "fathom" the possibility.
What if, just what if, this is one of those times where it will happen? Just like that. Overnight door closing before stockholders are left with nothing? Or a takeover/buyout? Nobody seems to think these things are even remotely possible, probably because it would be too big of a shock to them. Well, I don't know any better than the next guy, but in my eyes, AMD is in terrible peril. Losing in the neighborhood of 1/2 of a billion dollars per quarter for the past 4 quarters while having a debt that is approximately equal to it's market cap. Holy Moly...

I'm not crying doomsday, but in no way shape or form do I think that this can't happen. The way things look now, especially with Phenom's release, I'd say it's more than likely to happen. But what do I know.

I can certainly fathom the possibility, but barring a natural disaster, the numbers say it just can't happen.
Mind you, AMD has just gone through a year long "Perfect Storm", and it sure has been ugly.
What's hard for most people to understand is that AMD could post a loss every quarter for another 20 years and still be making a profit and doing fine...
I know that's counter-intuitive, but it is how accounting works.

Well, no accounting is gonna hide the fact that AMD is bleeding cash from it's operations. Last quarter it lost $371 mil from operating activities. If it's operation continue to lose money like that, it won't survive for long.

The good news is, AMD is doing a little better compare to the quarter before. It's margin is better and it lost less cash. We tech geeks like to predict if a company survive or fall based on the technology or product. But in reality how the company is run overall determines if a company will be successful. Phenom may suck compare to Intel offering. But if AMD can do a good job in manufacturing and get a good yield with good average speed, it can still sell a large quantity at a decent price. If AMD can offer good package deal with their spider platform to PC makers, they maybe able to increase overall market share in CPU/Video/chipset areas. Anyways, Phenom launch didn't look good. But I will not say AMD is gonna go under simply based on Phenom launch. Next year will be critical, and how well AMD execute in manufacturing and work with big PC makers will determine if they succeed or fail.

 

[Viditor]

Originally posted by: rchiu


Well, no accounting is gonna hide the fact that AMD is bleeding cash from it's operations. Last quarter it lost $371 mil from operating activities. If it's operation continue to lose money like that, it won't survive for long.

You'd be surprised...

Last quarter, AMD had an Operating loss of $226 Million...but of that loss, $352 Million was for depreciation (which isn't a cash loss at all).
As for cash, at the end of Q2 they had a total of $1.594 Billion in cash and short term investments, and at the end of Q3 they had $1.528 Billion (a burn rate of only $66 Million).

In addition, since that Q3 report, they received the $681 Million for the stock sale which gives them (not counting income from sales) a total of $2.2 Billion in cash and short term investments.
And there's more...
1. They are due to receive a $387 Million subsidy from the EU for Fab 38
2. They are receiving another $500 Million from Russian company Angstrem for equipment and licenses of their 130nm process.

 

[taltamir]

No one ever beleives a disaster will really happen... except for a few "paranoid nutcases" here and there...
Katrina? WTC? The Tsunami? Hitler? Stalin? The collapse of the sovient union (it ended up resulting in some improvement, but the fact the government collapsed instead of reformed made things really bad)? The great depression? I can just go and list almost every disaster EVER and nobody truely beleived it will happen... I wouldn't bring any FUTURE examples because that will make this go into politics FAST.

I will however say that all signs point to AMD closing shop, I expected them to do so monthes ago...

However I think AMD will go under and nvidia will either buy them OR via and start making CPUs... and we will be looking at a nvidia platform with a chipset, cpu, and gpu... or an intel platform with intel chipset, cpu, and gpu...
Where at first nvidia will hold the gpu advantage but lag in cpu, while intel will be the reverse... and later things balancing out.

 

[Mana]

We'll see, as I said, there are a lot of big companies that don't want AMD go down. They may get bought out by another company, but I doubt they will ever "die".

I do believe that if AMD can survive the next year~ they will be fine. Especially since the fruits of the AMD/ATi merger are coming to bear (the 3870).

 

[AlabamaCajun]

AMD will start to do better not that it's not acquiring companies, starting up a fab as 36 was just getting underway and convereting 30 to 38.
Phenom is out along with the support or Brisbane and Windsor duals and some single cores.
A new chipsets that look good for the middle and low end market.
Opterons, as I have been watch several sights, are selling pretty good.
ATI has shown promise to be getting better with video.
All these unless they muck it up should be indicators that for at least 6 months it should be good.

Via has been running as the underdog for a long time and still moving along quite well. Just don't look for either to push intel from it's perch again soon.

 

[CTho9305]

Originally posted by: taltamir
No one ever beleives a disaster will really happen... except for a few "paranoid nutcases" here and there...
Katrina? WTC? The Tsunami? Hitler? Stalin? The collapse of the sovient union (it ended up resulting in some improvement, but the fact the government collapsed instead of reformed made things really bad)? The great depression? I can just go and list almost every disaster EVER and nobody truely beleived it will happen... I wouldn't bring any FUTURE examples because that will make this go into politics FAST.

I will however say that all signs point to AMD closing shop, I expected them to do so monthes ago...

Did you short-sell some AMD shares / buy some "put" options? (Just curious how confident you are in this).