Is the end imminent for AMD?

[humbug]

Here are AMD's vital statistics. Here are NVidia and Intel for comparisson. Pay particular attention to the profit and margin and yoy growth columns to see why AMD are doomed.

They have been in worse places and turned it around.

2012 has been a bad year for them, they only had CPU's and GPU's on the market where people are not buying such things like they used to

They have spent the last few years paying down a $5bn debt, it's now down to $2bn

In 2013 they will have high density cloud servers, Tablet APU's, Nintendo Wii U GPU providers, probably xBox 720 and PS4 on the books to add to new CPU's and GPU's.

On paper 2013 looks promising.

However, they are now going to move away from the PC market, Steamroller will probably be AMD's last Desktop chip.

AMD finally wakes up to grim reality I think there revenue spending will take a dramatic shift towards Tablet's, as far they are concerned the PC market is all but dead.

Intel will be the only Desktop chip designer by the end of 2013, IMHO, But i think even Intel are increasingly loosing interest in the PC market, they have also sold a lot less than they expected.

 

[CAT-THE-FIFTH]

They have been in worse places and turned it around.

2012 has been a bad year for them, they only had CPU's and GPU's on the market where people are not buying such things like they used to

They have spent the last few years paying down a $5bn debt, it's now down to $2bn

In 2013 they will have high density cloud servers, Tablet APU's, Nintendo Wii U GPU providers, probably xBox 720 and PS4 on the books to add to new CPU's and GPU's.

On paper 2013 looks promising.

However, they are now going to move away from the PC market, Steamroller will probably be AMD's last Desktop chip.

AMD finally wakes up to grim reality I think there revenue spending will take a dramatic shift towards Tablet's, as far they are concerned the PC market is all but dead.

Intel will be the only Desktop chip designer by the end of 2013, IMHO

He also does not realise that things in the US work somewhat differently. Quite a few well known names today actually entered various chapters of "bankruptcy" to emerge much stronger.

Even companies like Apple who were on the verge of bankruptcy,re-organised themselves to great success. Sony did not even bother to invest in Apple at that point, to their detriment, as they thought it was dead loss. Look at the losses giants like Sony,Nokia and Sharp are enduring?? Nokia within a year went from profitable to making billions in losses. Loads of companies are in trouble,and even companies doing well now,might not be doing that well even next year. That is how volatile the world economy is.

The more important part is the desktop market is getting smaller and discrete card sales are going down year by year. Consoles,phones and tablets are becoming the bigger focus of gaming,and people revelling in the demise of AMD,are only shooting themselves in the foot if they are PC gamers. AMD will probably become smaller, and focus more on IP licensing and providing custom SOCs to OEMs as I detailed in my previous post in this thread.

 

[Martini1991]

If AMD want to head for tablets, they made forge some contracts and get that power consumption below Intel.

Which I hope they can, their APU offerings in tablets could be brilliant. What's lacking from the 26th launch is cheap X86 tablets with Windows 8.

 

[humbug]

^^^ right, it's not so much a demise of a company, Last year and Q1 / Q2 AMD turned in healthy revenue, it would have been a healthy profit if it wasn't for Paying $500m off that debt, its the last 6 months where CPU and GPU sales have taken a kamikaze nose drive, not just with AMD, But Intel and Nvidia to, not to mention Apple Workstations, Dell, Toshiba, HP, WD, Seagate. Microsoft...... all taking a battering this last quarter.

We are a dying breed, those companies catering for us are starting to realise they need to restructure to enter the markets that are growing at a phenomenal rate.

Tablets, that's why Intel, Nvidia and AMD are all coming out with Tablet Hardware.

All of them will continue to provide PC hardware that has already been designed for as long as its profitable, but it needs to be cheap as those willing to spend £100's on it are rare and fast becoming extinct.
As for plowing revenue into new stuff, not a chance.

 

[SkodaMart]

tablet PCs and games consoles

 

[CAT-THE-FIFTH]

tablet PCs and games consoles

Even Valve is making a games console!!

 

[humbug]

tablet PCs and games consoles

Thats the future, bleak isn't it?

 

[V F]

Thats the future, bleak isn't it?

More like depressing.

 

[Rroff]

They will almost certainly survive in some form but looking at the details it doesn't look good (hadn't actually noticed how bad it has got for them) - unless they can do something to stimulate sales in the short term to tide them over they are gonna get hit hard in the early part of next year and would be pretty much finished regardless of what future potential the company may or may not have unless someone buys into that future potential.

Certainly with hindsight but even at the time, the ATI purchase was questionable. Not only was the price far too high, the amount of debt AMD took on meant that they didn't have enough money to invest into R&D or fab capacity.

Now, they were complacent before Conroe and waited before investing in 65nm but the debt probably was the reason why APUs took so long to come out (five to six years during which time Intel beat them to integrating a GPU on die).

If AMD go under, they'll probably take what was ATI with them. Also, another major mistake was selling Imageon to Qualcomm for a pittance. Doubt AMD's management would have been so quick if Imageon had not been an ATI division. Now AMD has nothing to offer the phone / SOC market.

I wouldn't say it was questionable - what they didn't do so well was making the best of what they'd aquired as you mentioned with Imageon - very potent chipset (my Xpera X1 had one tho it was integrated into the Qualcomm chipset by that time) capable of being a real contender to ARM's Mali, etc. and potentially a real earner if you look at the shape of the smartphone and tablet markets.

 

[humbug]

^^^ a buyout? nice idea, unlikely to happen.

Intel have a lawsuit against AMD on the cards,- RE: x86 license, Which to Intel's credit they are not pursuing.

Intel and AMD have cross Intellectual property rights agreements, not just Intel-x86 to AMD-x64 but a few other things to, very complicated but it seems AMD did something with the x86 agreement that was a little naughty.

A potential buyer for AMD would need to add a potential and long legal battle with Intel into their equations.

AMD's saviour, should they need one could come from some shake in Dubai with a mountain of money who already has a 20% stake in AMD, not so much a buyout but his overall interest in the company may prompt him to inject some capital into it.

 

[V F]

They had layoff's before this, did they not? only this one is a bigger chunk.

http://semiaccurate.com/2012/10/12/amds-layoffs-target-engineering/

 

[Rroff]

^^^ a buyout? nice idea, unlikely to happen.

Intel have a lawsuit against AMD on the cards,- RE: x86 license, Which to Intel's credit they are not pursuing.

Intel and AMD have cross Intellectual property rights agreements, not just Intel-x86 to AMD-x64 but a few other things to, very complicated but it seems AMD did something with the x86 agreement that was a little naughty.

A potential buyer for AMD would need to add a potential and long legal battle with Intel into their equations.

AMD's saviour, should they need one could come from some shake in Dubai with a mountain of money who already has a 20% stake in AMD, not so much a buyout but his overall interest in the company may prompt him to inject some capital into it.

Wasn't really suggesting someone aquire the company wholesale - afaik they wouldn't get the rights to the x86 license anyhow and inherited legal liabilities would be a minefield with US law being what it is. There are other ways for people to buy into AMD's future tho without exposing themselves directly to potential legal action.

 

[humbug]

AMD's Q3 discussion transcript is here if anyone dares to enter the minds of AMD's management.

Copyright agreement to seeking alpha,-

You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

 

[Rroff]

^^ Its not pretty - the generic "we need to diversify to surive but we have no idea how we are going to do that" - tho they aren't entirely short for potential cash injections, fair amount tied up in accounts receivable, etc. that may help to balance things out til they can turn things around. Most of its the same tired old crap about reducing operational wastage, tightening the belt and hoping for the best (focus on decreasing losses rather than increasing revenues) - no clear vision for how to move/drive the company forward and make it increasingly more profitable. I don't really have much experience of this with tech companies but in retail this is usually what happens in the months before the company either goes under or is bought out - very few survive as is.

 

[setter]

The last decent cpu's amd produced were the s939 based chips, (my first pc was an a64 4000). Core 2d came on the scene and amd have suffered since. Bulldozer had great expectations, but failed to deliver.

 

[eddyr]

Here are AMD's vital statistics. Here are NVidia and Intel for comparisson. Pay particular attention to the profit and margin and yoy growth columns to see why AMD are doomed.

You're right, looking at the figures it doesn't look good. Loss of 600m (net inc avl to common - strange label) and the only reason they have positive operating cash flow is because from the looks of it they have delayed repayments to creditors of ~570m (from the cash flow sheet, changed liabilities, march) if im understanding it right. [edit: maybe an agreement due to cash needed for silicon prod for trinity/vishera?] Doomed may be an apt word if the status quo remains for an extended period.
Time to nurse my headache, I've always hated balance sheets.

 

[Rroff]

Yeah, the changes they are making to save some cash and squeezing things like accounts receivable (tho they are usually accounts receivable for a reason) may help them in the short term but at a real risk of sabotaging the long term in doing so. Maybe they can defer some obligations til they can turn things around who knows. TBH theres a lot of potential still there in the company tho, they just need to give the current management a bit of a boot up the rear I think.

 

[V F]

The last decent cpu's amd produced were the s939 based chips, (my first pc was an a64 4000). Core 2d came on the scene and amd have suffered since. Bulldozer had great expectations, but failed to deliver.

How late on was the X2's to that? I bought the 4600+ Christmas 06. I had a long blank spot after that due to mainly on consoles. Then a Phenom II 1090t December 2010.

 

[Freddie1980]

The problem for both AMD and Intel is that ARM, Qualcomm and Samsung have the smartphone and tablet makets sewn up. Even Intel with it's almost unlimited development budget cannot get a toe in the door.

True and its one of the reasons why they replaced thier ceo the other year but the trouble with that market ia margins are razor thin theres not a lot of money to be made. ARM only gets about 10 cents for every chip that uses is ip, AMD's major problem is that its costs are to high.

 

[Boomstick777]

AMD have just launched Trinity APU's and soon more desktop chips, alongside there very popular dedicated GPU's. AMD are also supplying the GPU part for the Wii U, and rumoured upcoming Xbox 720. Remember how well the original Wii sold, well this Wii U deal is another big contract for AMD.

People keep spouting this doom and gloom stuff don't really understand that AMD are doing well in a shrinking PC market. They need to lay people off to make a more streamlined efficient company, doesn't mean there about to go under, that's what business's do...