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AMD Businesses The Almighty Buck Hardware

AMD Reports $611 Million Loss 230

Posted by Zonk from the just-a-little-bit-of-money dept.
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.'"
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AMD Reports $611 Million Loss More

AMD Reports $611 Million Loss

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  • Big AMD Fan here (Score:5, Interesting)

    by rolfwind ( 528248 ) on Friday April 20, 2007 @05:49PM (#18818447)
    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 (Score:5, Insightful)

      by supabeast! ( 84658 ) on Friday April 20, 2007 @06:03PM (#18818635)

      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: (Score:2, Interesting)

        by seaturnip ( 1068078 )
        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 (Score:4, Interesting)

          by snuf23 ( 182335 ) on Friday April 20, 2007 @09:51PM (#18820501)
          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: (Score:2)

        by dave420 ( 699308 )
        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 (Score:5, Informative)

      by Timesprout ( 579035 ) on Friday April 20, 2007 @06:15PM (#18818779)
      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 (Score:5, Insightful)

        by TheRaven64 ( 641858 ) on Friday April 20, 2007 @06:39PM (#18818993) Journal
        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: (Score:2)

          by Kjella ( 173770 )
          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:Big AMD Fan here (Score:4, Insightful)

        by cheezedawg ( 413482 ) on Saturday April 21, 2007 @02:43PM (#18825801) Journal
        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: (Score:3, Insightful)

      by gr8_phk ( 621180 )

      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 (Score:4, Insightful)

      by mollymoo ( 202721 ) on Friday April 20, 2007 @09:09PM (#18820143) Journal

      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.

      • But Intel came back strongly, improving the P4
        If by "improving" you mean "throwing away and working on the P3 based Pentium M"...

      • 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: (Score:2, Insightful)

          by DohnJoe ( 900898 )
          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: (Score:2)

      by renoX ( 11677 )
      >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 (Score:5, Insightful)

    by thanatos_x ( 1086171 ) on Friday April 20, 2007 @05:50PM (#18818473)
    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: (Score:2)

      by fm6 ( 162816 )

      ...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: (Score:2)

      by shawnce ( 146129 )

      ATI is only worth $113m?


      Huh?
    • 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: (Score:3, Informative)

      by Bored Huge Krill ( 687363 )
      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
      • Judging by the ATI tech support I've been getting lately, they're worth considerably less than $113m. In my book, at least.
  • 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.

    • 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)
    • "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?
      • 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.
        • "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.
  • It just will take time

  • However, stock in AMD is rising (Score:4, Informative)

    by WillAffleckUW ( 858324 ) on Friday April 20, 2007 @06:09PM (#18818695) Homepage Journal
    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.
    • 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 (Score:5, Interesting)

    by BillGatesLoveChild ( 1046184 ) on Friday April 20, 2007 @06:18PM (#18818801) Journal
    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: (Score:3, Insightful)

      by gosand ( 234100 )
      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: (Score:2)

      by bky1701 ( 979071 )
      "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.
    • 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 (Score:3, Interesting)

    by postmortem ( 906676 ) on Friday April 20, 2007 @06:31PM (#18818931) Journal
    AMD is throwing itself and ATi in the pit, so nVIDIA can buy them both, as originally planned.
  • Slashdot has an advertising section disguised as "Opinion Center" paid for by Intel. Slashdot is now worthless for hearing AMD news.
    • 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
  • 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: (Score:2)

      by Aladrin ( 926209 )
      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 (Score:5, Insightful)

    by dtjohnson ( 102237 ) on Friday April 20, 2007 @07:29PM (#18819451)
    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.
    • 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.
      • 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 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
  • 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
  • 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
  • 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!

    • 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: (Score:3, Informative)

      by wild_berry ( 448019 )
      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... (Score:4, Insightful)

      by evilviper ( 135110 ) on Saturday April 21, 2007 @07:42AM (#18823027) Journal

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

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