AMD Reports $611 Million Loss

mpfife writes "Toms Hardware reports that declining microprocessor sales have pushed AMD deeply into the red. 'The company reported a net loss of $611 million on revenues of $1.233 billion, which is more than 20% below the guidance the company expected at the end of Q4 2006. The loss includes charges related to the ATI acquisition in the amount of $113 million, but is mainly a result of the increasing competition with Intel in the microprocessor market.'"

Big AMD Fan here

[rolfwind]

But I have to ask, while AMD were on top with the Athlon for several years - were they just sitting on their laurels?

Re:Big AMD Fan here

[supabeast!]

But I have to ask, while AMD were on top with the Athlon for several years - were they just sitting on their laurels?

Maybe. I think that it's a little more likely that intel finally realized there weren't enough marketing gimmicks in the world to beat a better product at a better price, and shifted some dollars back over to killer engineering. Then along came Core Duo...

Re:

[seaturnip]

The truth is that the Core Duo's architecture has been in the pipeline for a long time at Intel, and their years of work are paying off now.

Re:Big AMD Fan here

[snuf23]

The Core chip series is based off the Pentium M which was initially created to be a better low power notebook chip than the Pentium 4M. Intel cancelled further chip plans based off the Pentium 4 when it became clear that the architecture would not scale up in GHz as anticipated and was resulting in other problems (excessive heat, huge power usage). Power usage and heat generation also became a driving force in server purchases due to increased cpu per rack densities (such as in blade servers). Yes Core was a long time in the making but no Intel did not initially mean for it to be their flagship desktop processor.

Re:

[dave420]

I think you'll find they just made a breakthrough with their notebook cores, and realised that people wanted lower-power, faster chips, and the gigahertz race that was on at the time wasn't yielding the performance people wanted. So they came up with their core 2 duo. Saying they were trying to pull the wool over our eyes is a bit rude, considering there's no evidence for it at all. They're a business, not an evil cabal looking to destroy all that is good. I know this is slashdot, but c'mon :)

Re:Big AMD Fan here

[Timesprout]

No they were just not sufficiently on top to be able to generate the capital required to upgrade their fabs to the level where they could match Intels volume of production. This has largely precluded them from being able to clinch the big money deals with Dell,HP etc. AMD's chips were excellent, there just weren't enough of them.

Re:Big AMD Fan here

[TheRaven64]

AMD haven't been able to compete with Intel for a long time. Building a new-process fab is an incredibly expensive undertaking. Intel can afford to do it because they own the majority of the desktop and laptop markets. AMD can't. Fortunately for AMD, neither can IBM. The reason I say fortunately is because, while AMD or IBM could not easily make the capital investment required, AMD and IBM can between them, and have for some years. IBM don't make x86 chips, and don't really compete in the same space as AMD (except a small part of the server market that could go Opteron or POWER), so they make a good partner.

IBM have some very high volumes parts (some mobile chips, the CPU in every new console, etc), but they can't compete with Intel in terms of investment in the semiconductor market. If anything happened to AMD, then IBM would have some serious problems. The only way out would be to dramatically increase the sales of PowerPC chips. They might be able to do this using open source - sell appliance-type systems where the user doesn't need to know what OS or CPU is running - but it's a gamble.

Re:

[Kjella]

AMD haven't been able to compete with Intel for a long time. Building a new-process fab is an incredibly expensive undertaking.

Not in process technlogy, AMD have had superior processors but on a process technology that has been almost a full generation behind for some time. Intel have used their superior process technology to add a lot of cache, which is spaceconsuming but works. Now with the Core processors Intel is back on track with their processors, and all their other economics of scale work to put the

Re:

[shawnce]

and in most cars.

Re:Big AMD Fan here

[cheezedawg]

A lot of this is directly AMD's fault. Remember the big AMD/UMC deal back in 2002? AMD was so excited because now they wouldn't have to build more expensive Fabs, so as a result, they didn't. Then the deal fell through, and AMD was left scrambling to make up for their years of anemic manufacturing investment as a result of this deal. You cannot blame that kind of mismanagement on the competition.

Re:

[gr8_phk]

But I have to ask, while AMD were on top with the Athlon for several years - were they just sitting on their laurels?

Yes and No. That's around the time Hector the Sector Director took over. That's what our FreeScale rep told me he was called back at Motorola :-) He was not missed. From what I saw, he seemed to focus on marketing followed by fab building at AMD. The Hammer architecture was already a work in progress when he took over, so he can't be given credit for that. Modern AMD chips are still small re

Re:Big AMD Fan here

[mollymoo]

But I have to ask, while AMD were on top with the Athlon for several years - were they just sitting on their laurels?

Do you mean the 32-bit Athlon? Around that time, AMD were developing x86-64 while Intel were developing Itanium/Itanic. AMD were first to market with a 64-bit CPU normal people actually wanted; Intel's 64-bit offering was a hideous beast and they sold exactly twenty-nine of them. The P4s of the time were hot and slow, the Athlon-64s and Opterons were much nicer. But Intel came back strongly, improving the P4, adopting x86-64 and getting ahead in the multi-core race. AMD just couldn't keep up.

Even when the Athlon was on top in terms of performance, they didn't sell nearly as many as Intel sold P3s and P4s.

Re:

[Dun Malg]

But Intel came back strongly, improving the P4

If by "improving" you mean "throwing away and working on the P3 based Pentium M"...

Re:

[Richard_at_work]

Intel's 64-bit offering was a hideous beast and they sold exactly twenty-nine of them.

Where did this bit of FUD come from? The Itanium chips werent great sellers by any sense of the word, but both the Itanium and Itanium 2 sold vastly more than 'exactly twenty-nine'. Hell, one of the companies I do occasional work for has more Itanium and Itanium 2 systems than that (40 or so of each chip).

Re:

[DohnJoe]

please, it's not FUD (FUD is a marketing strategy) and he's just pointing out that the IA-64 architecture didn't sell so well, of course you shouldn't take the 29 seriously.... thick as a brick...

Re:

[renoX]

>were they just sitting on their laurels?

Perhaps, but the thing is: once Intel has "copied" Athlon's good ideas, AMD has to find other innovations to compete, so far they failed to do so, but is-it because a) they weren't really looking or b) because x86 implementations are already so efficient that it's very hard to find significant improvements?

I'd say that current emphasis on multi-cores, indicates that b) is most likely the case..

Let's hope they recover

[thanatos_x]

Regardless of your feelings on the Intel/AMD processors, I don't think any one of us wants to envision a world with only Intel making x86 processors. Don't get me wrong, they're doing an excellent job, but just how much of this recent surge was a result of the increased competition from AMD?

Re:

[fm6]

...just how much of this recent surge was a result of the increased competition from AMD?

Never mind the recent surge. Competition from AMD has been keeping commodity CPU prices down for at least a decade. And their x64 chips rescued us all from the Itanium nightmare.

Right now, I'm writing manuals for an Opteron-based high-end server. My job simply wouldn't exist without AMD.

Pity about their inability to make a profit.

Re:Let's hope they recover

[whoever57]

If Intel is making good processors at an affordable price, why would I not want that? Monopolies aren't inherently bad.

Because if Intel does establish a monopoly, prices will increase and innovation will decrease. There is no monopoly today, so Intel's behavior today is not relevant to how Intel might behave if AMD went out of business.

Re:

[ScrewMaster]

They're not inherently illegal in most countries, but yeah ... they are pretty much inherently bad. Corporations, much like the life forms that own and operate them, will evolve over time. When they are under evolutionary pressure (i.e. competition) they either improve, adapt, or die. When that pressure is removed, when that corporate organism achieves total dominance of its environment (that is, market sector), the process of devolution sets in. It doesn't matter how a corporation starts out, if it is ever

Re:

[Threni]

> If they rose prices too high, a competitor could undercut them.

Er..yes, but then they wouldn't have a monopoly.

> If they did anything illegal, the government would go after them

Yeah, the government will save us, right after they save the people who lost their money with Enron.

Re:Let's hope they recover

[Embedded2004]

The barrier to entry into the x86 processor market is *extremely* high.

If AMD folds, Intel could pretty much do anything they want to with prices.

It would be bad for everyone other than Intel employees and Intel share holders.

Re:

[mrmeval]

Screw AMD, they want to embrace DRM they can die.

Re:Let's hope they recover

[whoever57]

You don't know that's true. Intel would raise prices as far as it wouldn't decrease sales. If they rose prices too high, a competitor could undercut them.

The cost of entry for developing processors is huge. Undercutting them is not so simple. A logical approach would be for Intel to raise prices, but be prepared to drop them if it looked like a competitor were about to enter the market (the lead time, investment and people required are such that any competitor in x86 could not keep a market entry secret for very long). Rational behavior from Intel would be to raise prices and spend less on R&D. Exactly how much that would impact processor prices is hard to gauge (but see my last comment). Price rises would be inevitable, the only question is how much.

If they did anything illegal, the government would go after them.

Based on what we have seen from the current administration, a slap on the wrist would be applied -- but probably insufficient to wipe out excessive monopoly profits, thus a rational company would attempt to create and leverage a monopoly. In any case, given reasonable increase in prices (say 50%), it would be difficult to prove an illegal monopoly at work.

It's not my job to worry what someone might do in some hypothetical situation just because AMD is floundering around right now.

Your job: no. Might you suffer (by paying more) if AMD stops making processors: probably.

Re:

[Kadin2048]

You don't know that's true. Intel would raise prices as far as it wouldn't decrease sales.

True. However, if they were the only one producing x86 chips, since the demand for them is so high, and the cost for a new competitor to enter into the market (setting up fabs, withstanding the resources Intel would use to try and kill them) would be so great, they could drive up prices significantly and most people would just have to bend over and take it in the wallet.

If they rose prices too high, a competitor could

Re:Let's hope they recover

[Chandon Seldon]

If they rose prices too high, a competitor could undercut them.

There are only two companies that legally *can* compete with Intel in the x86 processor market: AMD and VIA. Intel has a shitload of patents on implementing x86, and it's only through sheer luck that those two companies have licenses for the patents. If AMD goes under, VIA becomes our only hope for competition - and if the C7 is any indicator, Intel would be able to set their price for high end gaming processors for a very long time before VIA even had a chance of catching up.

Re:

[bit01]

Monopolies aren't inherently bad.

Actually, they are.

Monopolies means no competitors to control the retail pricing of companies who are usually legally required to maximize profits.

Unless you want government price controls. Do you want government price controls?

---

DRM. You don't control it means you don't own it.

ATI is only worth $113m?

[Ant P.]

Ouch.

Re:

[shawnce]

ATI is only worth $113m?

Huh?

the mind boggles

[rucs_hack]

611 million? and they are a succesful company?

I don't understand the business world, really I don't. It's almost as if money at that level is little more then a scorecard.

Re:

[Bored Huge Krill]

No. The $113m is not the equity cost of the acquisition. That gets treated differently for accounting purposes, and doesn't appear in the profit/loss numbers, rather it appears in the capital investment/assets part of the balance sheet. The $113m is "acquisition related charges", which is all the other costs they can think of associated with the acquisition, like paying lawyers and possibly some write-offs of inventory or in-process technology. The numbers generally are rather fungible, and I'm not speakin

Re:

[Chazmati]

Judging by the ATI tech support I've been getting lately, they're worth considerably less than $113m. In my book, at least.

Well there's a reason

[farker haiku]

I'm about to build a machine. According to Tom's Hardware [tomshardware.com], if you want to build a gaming machine these days, you have to go core 2 duo. AMD is posting a loss because they can't compete right now. Not news.

Re:

[whoever57]

I'm about to build a machine. According to Tom's Hardware, if you want to build a gaming machine these days, you have to go core 2 duo.

Only if you want a top-of the line machine. If you want to pay less than $200 for your CPU, it is a close call, with AMD slightly ahead [legitreviews.com] (look at the conclusions and summary)

Re:

[Giometrix]

"I'm about to build a machine. According to Tom's Hardware, if you want to build a gaming machine these days, you have to go core 2 duo. AMD is posting a loss because they can't compete right now. Not news."

I'm no longer a big gamer, but it seems to me that a top (or near top) of the line video card is far more important than having a top of the line cpu. Wouldn't you be better off getting a sub $200 AMD cpu (which are plenty fast, IMO) and spending the saved cash on a better cpu?

Re:

[farker haiku]

Who said I wasn't buying a top of the line video card? I've got an nvidia geforce 8800 gts. That's more than capable.

Re:

[Giometrix]

"Who said I wasn't buying a top of the line video card? I've got an nvidia geforce 8800 gts. That's more than capable."

Fair enough. Do you think that with an 8800 you'd notice a difference in gaming performance between a c2d and AMD (at whatever resolution you play games at)? I'm not trolling or anything, I'm just curious.

amd quad-cores will save them

[Joe The Dragon]

It just will take time

Re:

[Wonko the Sane]

I was so ready to buy one of those... I had to settle for the 5500 instead.
This was back when the Vortex 2 chip came out from Aureal, which dominated Creative Labs with respect to positional audio. Once again the superior technology lost to the better marketed technology.

However, stock in AMD is rising

[WillAffleckUW]

While it is true that they are in a world of hurt right now, they have taken concrete actions that should deliver another round of highly profitable quarters, and their new quad core processors and power consumption ratings should result in their usage in a lot of boxen.

That plus the breakdown of the MSFT monopoly and the Wintel dictatorship (disclosure - I have owned MSFT before, and own I think 400 shares of Intel) with the low cost push and power push for PCs and laptops using processor chips, should mean they will return to profit in short order.

The market always projects 4-6 months ahead, except in Japan and Europe where it tends to project 6-18 months ahead.

Re:

[Hemogoblin]

While I hope that they will bounce back as well, failing to meet projected revenues is never a good thing. The market agrees and AMD's stock fell 2% in after hours trading. Of course, if the market felt AMD was doomed it would have fallen a lot further.

AMD: Try listening to your customers

[BillGatesLoveChild]

AMD was founded by Jerry Sanders, a high-flying salesman originally from Intel who never quite fitted in. In Andy's Grove's Bio of Intel, he describes Sanders as fast and loose and the AMD corporate culture akin to a Las Vegas Casino: Very extravagant and over the top. Nevertheless, AMD did produce some killer products which at the time made life hard for Intel.

AMD successfully played the market well, offering very fast CPUs for cheaper than Intel could muster. But recently they dropped the ball. Not only have they not come up with an answer to Intel's Core Duo, but AMD have been doing some bizarre stuff like taking over ATI, then announcing they would build DRM into ATI graphics cards. http://www.infoworld.com/article/07/03/28/14OPcurv e_1.html [infoworld.com] How is that going to reverse a declining market share? AMD should learn from the disaster Intel faced a few years ago when it wanted to build a CPUID into their chips that would allow tracking of customers. There was a backlash. Now here AMD are doing the same thing, at the same time their market share is declining?

Maybe they (and SONY) should fire their board and create a Slashdot forum to run the company. We could hardly do a worse job!

On the bright side Intel are turning out nice stuff these days and have said they intend to get into the 3D market again. Declining PC sales will hopefully keep their prices down. Even if AMD go down the tubes, we'll be ok... I hope.

Re:

[gosand]

AMD was founded by Jerry Sanders, a high-flying salesman originally from Intel who never quite fitted in. In Andy's Grove's Bio of Intel, he describes Sanders as fast and loose and the AMD corporate culture akin to a Las Vegas Casino: Very extravagant and over the top. Nevertheless, AMD did produce some killer products which at the time made life hard for Intel.

My best friend works at Intel as an engineering manager, and he's been there for 9 years. He has told me many stories about how people at Intel t

Re:

[bky1701]

"Maybe they (and SONY) should fire their board and create a Slashdot forum to run the company. We could hardly do a worse job!"

I'm not sure about that, I'd have to see the specs on the Cowboyneal 64 4800+ first.

Re:AMD: Try listening to your customers

[BillGatesLoveChild]

> I'm not sure about that, I'd have to see the specs on the Cowboyneal 64 4800+ first.

Software specs could be sorted out quickly. The "What Operating System shall we use?" thread will have one post in it: "I say Linux, anyone disagree?"

Re:

[Infe]

> Software specs could be sorted out quickly. The "What Operating System shall we use?"
> thread will have one post in it: "I say Linux, anyone disagree?"

Replies 2-346: What distro?

Re:

[Junks Jerzey]

AMD successfully played the market well, offering very fast CPUs for cheaper than Intel could muster. But recently they dropped the ball. Not only have they not come up with an answer to Intel's Core Duo...

How does this have anything to do with listening to customers or not? Of *course* AMD wants to build a faster, cooler, cheaper CPU. That's a big "duh." But obviously it's not so simple of they'd have done it by now. There's no magic bullet that makes each generation of processors faster.

Conspiracy Theory # 90...565

[postmortem]

AMD is throwing itself and ATi in the pit, so nVIDIA can buy them both, as originally planned.

Slashdot is a little biased reporting this

[Myria]

Slashdot has an advertising section disguised as "Opinion Center" paid for by Intel. Slashdot is now worthless for hearing AMD news.

While I tend to agree about the choice of the...

[msimm]

Opinion Center, I'd like to point out that for a long time we (collectively, Slashdot) complained that Intel spent so much money on marketing with second-rate chips. As a systems admin performance on the server side can really count. With the introduction of the 5160 Intel is once again a legitimate competitor. At least for the time being, at the top of the x86 market.

There hasn't been a lot of exciting news regarding our old favorite, AMD. I'm sure that will change again. But for now, when I purchase new

New tech needed.

[zymano]

Amd has to try something new. They have to be different.

A better advertising campaign would help.

There is tons of confusion on processor types and speeds.

Re:

[Aladrin]

AMD does indeed need to invest in some advertising. The last campaign I remember of theirs was when they started advertising Athlons, I think. I remember that their advertising actually said 2 mutually exclusive things on the same ad sheet, but I don't remember exactly what it said. Something about 133 cycles vs 100 being better, and then they actually said the opposite in the paragraph next to it. (I think they were TRYING to said that Mhz was not an accurate measurement anymore, because of the 133 cyc

AMD/Intel is about controlling the hardware future

[dtjohnson]

The AMD/Intel dogfight is about way more than x86 market share...it's about the future of the hardware platform. Intel has always been restrained by competitors who will offer us a user-friendly alternative to whatever Intel and Microsoft are dreaming up. When Intel and Microsoft were pushing the CPUID, AMD refused to go along and Microsoft had to make do with a hardware profile they whip up from the onboard devices and serial numbers. If it was not for AMD, every web site you visit today would be able to read your cpu serial number and log your machine in as a unique visitor. Instead of the RIAA grabbing IP addresses and attempting to identify the user with some cumbersome legal process, they would just log your cpuid and subpoena the corresponding machine. Microsoft is still working to that end with whatever tools they can and they know that they need amd and intel completely and irrevocably in bed with them which they know cannot happen when amd and intel are still bitter competitors. So Microsoft has never done anything to help AMD and hopes that AMD is finally sinking for good.

Re:

[dr.badass]

When Intel and Microsoft were pushing the CPUID

CPUID is not the same as the Pentium III's Processor Serial Number. Get your terms straight if you want to be taken seriously. Bear in mind also that the PSN was disabled by default and was ditched entirely a year after introduction because nobody was using it. Even Microsoft never used it as part of it's product activation. AMD had nothing to do with it. You are a paranoid fool.

Re:

[BigDumbAnimal]

Why do you think it was disabled by default and later ditched? Intel was forced to make the changes because of public outcry due to some ugly PR.

Ubuntu

[wytcld]

Ubuntu comes built for two platforms, i386 and AMD 64.

If Ubuntu sticks with that, and manages to become the breakthrough "Linux for Everybody," AMD ends up the benefactor - a distro compiled for i386 costs majorly in speed, in ways that show up in normal desktop use.

Consider that Michael Dell is personally testing Ubuntu, and that Dell itself has hit a rough patch of late, and is looking for new ways to differentiate itself. Canonical is also working closely with Sun to make Ubuntu the superior Linux platfo

Manufacturing is totally saturated

[nido]

You know that chemistry experiment with sugar and water? You dissolve a little sugar into a glass of water. While stirring, slowly add more sugar. All the sugar will dissolve, up to a certain point. Then you'll get solid sugar crystals at the bottom of your glass, and every additional sugar molecule will collect on the bottom.

The market for chips is analogous. After years of expansion, the world has the capacity for all the chips it can possibly use. Instead of pulling back, Intel and AMD have been pour

Cyrix Boom VIA boom Transmeta Boom

[gelfling]

They all go boom. They always do. Why? Because at the end of the day they're all Intel COMPATIBLE not the other way around. Intel will occasionally falter and their architecture may run out of gas like the P4 but at best all any of the other companies can be is faster or cheaper following the compatibility lead of Intel. Dual or Quad core is a technical workaround for heat and power problems that brought the P4 to a screeching melting halt. AMD can only be a faster cheaper version of that. The other compani

If AMD *EVER* wants to get ahead again...

[Khyber]

They better take a SERIOUS fucking look at their L2 cache sizes.

I see Core 2 Duos with 2 megs per fucking core.

I see Turion 64 X2's with a paltry 256K.

That's just the LAPTOP end.

Hey, AMD, wonder why you're not going any fucking where, even though you've had a superior bus?

Remember the Pentium D (Basically a hyped up pentium 3 with 2 megs of L2 cache) that smoked many higher-end Pentium 4s in gaming?

Pay attention! My 640K AMD64 3000+ could be smoking many other machines if it just had a DECENT CACHE ON-DIE!

Re:

[TeknoHog]

Remember the Pentium D (Basically a hyped up pentium 3 with 2 megs of L2 cache) that smoked many higher-end Pentium 4s in gaming?

I think you mean Pentium M, not D. IIRC Pentium D was a dual P4, but Pentium M matches your description perfectly.

Re:

[wild_berry]

I think that you're overlooking other architectural and production reasons for there being comparably less cache on the Athlon64 dies. My (single-core) Turion64 has 1024 KiB of L2 cache, and came out shorly before AMD shrunk their cache sizes and moved to DDR2 memory.

The issue has two potential causes: one is smaller silicon die space allows AMD to sell more chips to Dell, low-end whitebox builders and enthusiasts, which must also come with the admission that the K8 architecture was never going to hold on

Re:If AMD *EVER* wants to get ahead again...

[evilviper]

I see Core 2 Duos with 2 megs per fucking core.

I see Turion 64 X2's with a paltry 256K.

And I see Core 2 Duos with 1MB L2 cache, compared with Turions with 512K per core... You're just taking the worst-case example, and complaining about it as if it's typical.

Not to mention that Turion X2s have 128K L1 cache, while Core 2 Duos have a paltry 64K of L1. L1 is much more significant than L2.

What's more, L2 cache isn't magic, anyhow. According to benchmarks, the difference between 2MB L2 cache, and 4MB L2 cache, makes AT VERY BEST less than 10% of a performance improvement. http://www.bit-tech.net/hardware/2006/07/14/intel_ core_2_duo_processors/5.html [bit-tech.net]

That's just the LAPTOP end.

Actually, it isn't. Core 2 CPUs are Intel's desktop CPUs as well. AMD, OTOH, has a different line of CPUs for their desktops, with, among other things, typically 1MB of cache (in your words) "per fucking core."

Remember the Pentium D (Basically a hyped up pentium 3 with 2 megs of L2 cache) that smoked many higher-end Pentium 4s in gaming?

No, I don't remember that at all. the Pentium D is the euphemism for a Pentium 4, that they've used just in the past few months now.

Pay attention! My 640K AMD64 3000+ could be smoking many other machines if it just had a DECENT CACHE ON-DIE!

People are supposed to accept your theory, because you've shown how you know absolutely nothing about processors? I'll pass. AMD can figure out how to make fast CPUs without your "help." They've just been caught napping, and need time to catch up.

Re:

[owlstead]

"Dude, go to anger management counselling."

Maybe he did. Maybe the psychiatrist said something like: "You'd better find another outlet for that anger. Otherwise you will be beat up by someone in no-time." Well, here we are.

Better get buying AMD for your own good

[bl8n8r]

If Intel turns into the 800 gorilla in the CPU market, you can kiss your $200 core 2 duo chips goodbye.

Sun uses/will use either chips...

[Fallen Kell]

For a while there Sun was only using AMD chips in there X86_64 architecture based systems. Very soon they will have Intel based systems available.

Re:

[misleb]

Sun still uses SPARC, but for the x86 systems they are using AMD last I checked. But that's not a huge part of the market. I mean, that's mostly servers. Desktops are where it is at.

-matthew

Re:

[eneville]

I wonder if AMD will loose the competition to Intel all together.
Do we risk going back to having only one big CPU producer?

I seem to recall that Solaris is now also based on Intel chips (or was that AMD chips).

I have always been buying Intel CPU's until now, but still I am rather fond of AMD as they have forced Intel to get their act together.

Solaris is the OS, Sparc is the traditional CPU in their boxes. I forget the true name of the box, but Sun Fire can support AMD CPUs.

Re:Will this lead to Inte monopoly again?

[Anonymous Coward]

>I wonder if AMD will loose the competition to Intel all together.
They already have: They talked to the competition and said "Fly, be free!"

Re:

[Bassman59]

>I wonder if AMD will loose the competition to Intel all together.
They already have: They talked to the competition and said "Fly, be free!"

Mod Coward Up!

Re:Will this lead to Inte monopoly again?

[Tablizer]

I wonder if AMD will loose the competition to Intel all together.
Do we risk going back to having only one big CPU producer?

Not if investers are smart. Duopolies are the next best thing to having a monopoly, meaning it has fat profit margins. However, if it is truely a business that requires economies of scale, then if AMD shrinks down past a certain size, it could risk being left out in the cold. I think this is just a temporary blurp. No need to worry yet. Tech is cyclical, including chips.
             

Re:Will this lead to Inte; monopoly again?

[WillAffleckUW]

Not if investers are smart. Duopolies are the next best thing to having a monopoly, meaning it has fat profit margins.

We call that an oligopoly, actually. A duopoly is just a form of it. The market can exist with one monopoly, an oligopoly with competitors who do not compete (either thru blatant signals, established contracts, territorial agreements, or price fixing), an oligopoly with minor competition (what has existed for many years with Wintel and AMD since the fall of Motorola's dominance), a mixed m

Re:

[TheLink]

You call the competition between Intel and AMD minor competition?

So what's major competition? When your products are _expected_ to (and actually) get better, faster and cheaper every week instead of just every few months? Show me examples, I'm curious now.

Coca Cola vs Pepsi = minor competition. McD vs others = minor competition.

Smart investors should avoid investing in IT companies - much easier to accidentally get it right in other areas ;).

Re:

[zerocool^]

Well, it is cyclical, but it wasn't too smart in my opinion to buy a some-what floundering video card company right before the cycle beat the crap out of them with the core 2 duo.

I mean, I'm a huge fan of AMD chips, but if I were in the market right now, Intel is the only game in town. Let's hope it swings back before they run out of cash.

Re:

[afidel]

So so wrong. Because it uses lower power ram and is competitive in MIPS/Watt the Opteron is still a better bet for efficient servers vs the Core based Xeon's. Add to that better bus bandiwidth and in four socket and larger systems the Opteron is still very competitive. I can't wait for the quad core Opteron's, a DL585 G2 with four quad cores and 32GB of ram will be a real workhorse, not that the current generation are slackers =)

Re:

[zerocool^]

Um, dude, not everyone is in the market for "competitive MIPS/Watt" quad core servers. Most of us just want a fast desktop so we can play counterstrike.

Re:Will this lead to Intel monopoly again?

[Original Replica]

I couldn't quickly find numbers for Intel for all of 2006, but they seem to be doing much better than AMD. Still the chip business is slow right now.

Following layoffs and executive shuffles, Intel Corp. reported a third quarter profit Tuesday of US$1.3 billion, beating analysts' estimates, but still falling far short of its results last year. The company reported revenue of $8.7 billion, thanks in large part to the sale of 6 million of its new Core Microarchitecture chips for notebook PCs and servers. That

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[TheGreatHegemon]

What about Intel's revenue? Granted, there's a massive size difference between Intel and AMD, but still.

Re:Will this lead to Intel monopoly again?

[eonlabs]

I have another company in mind that I think may start competing directly with Intel in the CPU market.

I welcome anyone to venture a guess into what I'm thinking.

Lets just say that to compete in that industry, you would probably have to launch yourself outside that box and think spatially...

This comment doesn't say much intentionally and is based on gut feeling entirely, but it should get some of you thinking.

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[servognome]

Lets just say that to compete in that industry, you would probably have to launch yourself outside that box and think spatially...

Outside of the box... so the processor is in a box right now. Think spacially... space is empty. So it would be a company selling the processor taken out of an empty box
Phantom Entertainment [phantom.net] will release the CPU from their Phantom Console!!

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[eonlabs]

Fair enough.
Judging from the looks of it, I would say it's a safe bet NVidia is going to be moving in that direction in the near future.

My cards are on the table.

Lets see if I guessed it well.

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[RazzleDazzle]

One of the things that helps Intel sales (at least in my experience/opinion) is that Intel additionally sells other server components such as RAID cards, motherboards, server chassis, etc. And it's not just that they make these other things, but that they are also very reliable and well performing and they all work well together.

On a personal level, I love AMD CPUs and will continue to buy AMD but I don't use very high end products generally speaking for personal things. I don't use Opterons for my personal

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[drsmithy]

Do we risk going back to having only one big CPU producer?

When would that have been ? AMD have been selling alternatives to (more accurately, up until the mid 90s, licensed copies of) Intel CPUs since, well, basically forever (as far as the PC world counts).

Re:Will this lead to Inte monopoly again?

[sumdumass]

I don't think this is going to be an issue. There are several problems with AMD's outlook that was mere arrogance or wishful thinking on AMD's part.

AMD has a pretty good product but Intel has been setting the stage for quite a while. You might say that people look at them as the De facto standard. Even When AMD leads in all the products that are comparable to Intel's prducts, Intel still sets the stage.

AMD took for granted that they were leading the pack when they were producing the better performing product. This led AMD to think they could charge a premium for their product and they did. But AMD's has always been a value based seller. Their primary product has been the most performance for the buck spent. This runs counter to the assumption that they were in a position to charge more for their product. It caused sales to slip and made Intel's less performing but more reasonably priced products look better.

Now there are two approaches to setting a price point. One is charging as much as the market will pay and the other is charging less but encouraging more sales to make up for it. Kind of like making $100 per sale in profit and selling two items per year($200) verses making $10 profit and selling 200 per year($2000). AMD went from the second to the first and then recently switched back. There are probably more reasons then just price but it is a key.

The problem with selling cheaper then the competition is that you are seen as second best. A substitute for the good stuff if you will. But Intel has always been the Good Stuff and AMDs reign at the top wasn't long enough in standing to switch this opinion/impression. The tech guys going though the AMD processor problems with the K6-2 and K6-3s are the managers making the buying decisions today. They will always think Intel is the top dog. Everything is rated with "Intel compatible" or "P4 compatible processor" on the sys requirements. Until this actually switches to "AMD compatible AthlonXP 2100 or better" for processor speeds, it will always remain this way.

Once AMD goes back to being the best bang for the buck and Intel needs to have a $999 processor to compete, they will be back to making money and gaining market share. But even if they get the same performance and AMD saves you $200 for the same performance, they will have sales and market shares like history has shown. AMD should be in a lot better shape this time next year. And depending on how they finance their debt this year, they might be back in the black too.

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[level_headed_midwest]

Yes, I'll buy every processor Apple makes.

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[MerlynEmrys67]

Let see - INTC is probably the low cost silicon manufacturer.
INTC has maintained margins around 50% AMD reported 28%
AMD is much more fab capacity and process strained than INTC
INTC made as much in Profit as AMD made in Revenue

How do you expect AMD to be able to sell chipss cheaper/better than Intel. Specifically, if AMD doubled the transister count of their CPUs (by doubling the core count) their yield plummets, significantly raising the cost of the CPUs. At the same time, you are expecting AMD to pla

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[misleb]

Don't laugh. I'm typing this on a machine built around a pirated AMD chip. I downloaded blueprints (or whatever they're called for chips) and programmed my FPGA! It is the future. Everything will come down to intellectual property... in the future. Even the FPGA's will come from a replicator that materializes an item based on someone else's intellectual property. Before you know it, we'll be licensing food blueprints... and people will pirate them!

-matthew

FPGA Based Piracy

[nurb432]

Sure, in the future that will be an issue.. but its not today. FPGAs cant compete with mass produced chips for price or speed, yet.

Food blueprint licensing? We do that now with cookbook recipes.

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[Overly Critical Guy]

Why do I always get the impression stuff like this is said by those with an allegiance to AMD? It's not my concern as a "sane customer" whether or not AMD survives. My role as a consumer is to buy what I want--the best-performing chip for its price. That's currently coming from Intel. It's not my concern whether some other company isn't doing as well.

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[vertigoCiel]

Competition is always good for the consumer. When one company dominates, there's no pressure, and that company will only marginally improve their products over their previous iteration.

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[whoever57]

Why do I always get the impression stuff like this is said by those with an allegiance to AMD? It's not my concern as a "sane customer" whether or not AMD survives.

Why do I always get the impression stuff like this is said by those with an allegiance to AMD? It's not my concern as a "short-sighted customer" whether or not AMD survives.

There, corrected that for you!

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[Anonymous Coward]

Unless you know precisely what you're going to be doing with such a system (or are living happily with a comparable one right now), I'd recommend against it. You can instead go with a mobile chip - intended for laptops, so they're more efficient - and underclock it. Changing the processor's core speed is a native feature of modern mobile CPUs, so it's reasonably well supported and you can do it "on the fly" (without rebooting into the BIOS). There's a Windows program, whose name I forget, which lets you

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[zippthorne]

If you have a real bear of a system, that uses every last watt of that massive 350 W PSU you bought, you could be spending as much as $370 [google.com] per year. Not to mention the cooling load if you're located in a hot region.

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[Rakishi]

In which case an epia really isn't right for you now is it? I mean you do realize that it's only going to use 350W if its under load, right?

Re:Only made 2/3rds their costs

[fiendy]

You just made the most incredibly generalized financial analysis I've ever read. 2/3 their costs? Do you have any idea about fixed vs. variable costs?

I can't believe you got modded up, since its clear that you didn't even bother to take a look at their financials. Impressive though, if you can come to any kind of understanding of a business with two lines of information - profit and revenue. I just hope you're only investing your money.

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[mobby_6kl]

>> net loss of $611 million on revenues of $1.233 billion
> So essentially, they needed 50% more revenue to break even.

As you said yourself, these numbers can misleading, partly because of large non-recurring costs, like new fabs. But it is also possible that the variable costs (costs from all additional units of production) are very high, meaning that if they increase the production by 50% to increase the revenues by 50%, they would also significantly increase the costs, say by 40%, keeping their p

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[WalksOnDirt]

... these numbers can misleading, partly because of large non-recurring costs, like new fabs.

The cost of an asset like a fab would be amortized over its useful life for accounting purposes.

Let's say you've spent $100 million on a new fab this year, and its not yet producing any revenue. Will this cause a loss? Probably not, since you have a brand spanking new fab worth $100 million on your books now. The fab will fall in value quickly in the future, and will cost a lot to operate and maintain, so that's

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[Jackie_Chan_Fan]

I love my Intel QX6700 hack job :) Absolutely amazing. I hope AMD is around for a long time because i love seeing Intel backed against a corner in a comepetitive heat, they surely know how to deleiver performance when pushed. AND INTEL NEEDS TO BE PUSHED. We all remember the 200mhz 210mz 220mhz days ;) How fucking long did it take intel to go in 15mhz increments from 200mhz to 1ghz!?@$~!@$!$!@$!@$%!@$

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[ajlitt]

but computers are one industry that isn't run by the jews...

So true, since Michael Dell and Andy Grove are two bit nobodies. Asshat.

[ot] apparent prejudice

[wild_berry]

Sir, I don't understand your comment "computers are one industry that isn't run by the jews". What little I can see in that statement is a differentiation between people based upon race, which may indicate prejudice. It isn't okay to write off your post as over-enthusiastically fanboy-ish, because irrational prejudice is a harmful thing. If you didn't post with prejudice against Jewish people, can you explain what you meant?

(And as for quad-core, I read somewhere of an AMD exec admitting they should have

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[TeknoHog]

I didn't know Dell was in the business of supporting Linux...