Can we give The_Abyss his own forum where only threads which meet his stringent guidelines can be posted?
Seriously man lighten up. Let the mods decide if a thread is appropriate or not. Some of us happen to be watching the AMD financial situation with great interest.
It is quite disturbing that AMD now owes more than ten times the profits it has generated in 30+ years of business.
Yes it is and the point is people seem to think that AMD can go on doing this forever. The chipmaking industry is in a different state in 2007 than where it was before. Much consolidation happening as companies cannot justify investments on their owns in high end fabs. Even Texas Instruments who is a bigger company than AMD is ceasing development in process R&D post 45 nm node for their Logic technologies and relying on foundries. AMD simply cannot go on with their current business model as it is back to losing money. I suspect we will here something about AMD's new strategy within the next 60 days. They promised at Q1 2007 earnings conference call in April as they kicked an executive task force into gear to address their broken business model.
It is quite disturbing that AMD now owes more than ten times the profits it has generated in 30+ years of business.
Yes it is and the point is people seem to think that AMD can go on doing this forever. The chipmaking industry is in a different state in 2007 than where it was before. Much consolidation happening as companies cannot justify investments on their owns in high end fabs. Even Texas Instruments who is a bigger company than AMD is ceasing development in process R&D post 45 nm node for their Logic technologies and relying on foundries. AMD simply cannot go on with their current business model as it is back to losing money. I suspect we will here something about AMD's new strategy within the next 60 days. They promised at Q1 2007 earnings conference call in April as they kicked an executive task force into gear to address their broken business model.
Yes, their business model is broken. The article was poorly written and doesn't contain anything that wasn't already known, but it does bring to the fore how badly AMD's financial position has deteriorated. With the senior note offering, AMD agreed to 6% interest on $2.2B for $1.4B that it can actually use.
It has been apparent for some time now that the money will be needed just to cover losses in 2007. Debt servicing is and will continue to be a drag on the balance sheet, with long term liabilities pushing towards $9.0B. AMD itself has stated that it expects revenues to be flat to slightly up in 2Q07. Considing how dismal their performance was in 1Q07, we can see that Merrill Lynch's projection that AMD would burn through approximately $1.0B thru 3Q07 is not terribly far off the mark. Merrill Lynch assumed that K10 would be widely available sometime in 3Q. But supposing, as now seems likely, Barcy doesn't enter the server market in volume till 4Q07 at earliest. Well, there's your $1.4B right there.
Meanwhile, AMD still has to transition to 45nm, and it's anyone guess how they are likely to finance that when they are basically tapped out. This, I guess, is why the rumours of outsourced manufacture are flying about. In order to remain competitive they need to raise money, but in order to raise money they need a competitive product. It's a doublebind.
It is quite disturbing that AMD now owes more than ten times the profits it has generated in 30+ years of business.
Yes it is and the point is people seem to think that AMD can go on doing this forever. The chipmaking industry is in a different state in 2007 than where it was before. Much consolidation happening as companies cannot justify investments on their owns in high end fabs. Even Texas Instruments who is a bigger company than AMD is ceasing development in process R&D post 45 nm node for their Logic technologies and relying on foundries. AMD simply cannot go on with their current business model as it is back to losing money. I suspect we will here something about AMD's new strategy within the next 60 days. They promised at Q1 2007 earnings conference call in April as they kicked an executive task force into gear to address their broken business model.
I said they should stop lowering prices, but Intel wouldn't let up. Now Intel is planning to make quad core the norm (Q6600 for $266). That will be the worst thing for the whole industry and more so for AMD. Though AMD may be buoyed by ATi sales in the coming quarters, they will still have a margin problem until 90nm is gone from Fab 30 and all GPUs are at least 65nm, with 55nm being the sweet spot for the volume business.
Intel is said to not want to put AMD out but their pricing is saying something else. As the company with the REAL ability to set prices, they flirt dangerously close to illegality by making it nearly impossible for AMD to turn a real profit.
I have also said many times that the industry will buoy AMD as much as possible not because then Intel would have a monopoly but because of the channel infrastructure devoted to AMD products. 20% of a few hundred million PC sales is no small thing.
The article also made the good point of mentioning that respins are a lot cheaper than initial build, so at least Barcelona will eb cheaper to get a new rev, which some report is about to break cover. I guess AMD is smart for going @2P/4P first as the volumes are lower but margins are much higher.
I am of the opinion that they should really try to get the desktop quads out but it may not be financially feasible. From the senior notes it says they got actually $1.2B in addition to the $1B they had and the few hundred million from the restructuring. XMas is the "near drop dead date" for desktop though in some form. Getting a high clocked Kuma out along with lower clocked Agenas would serve them well going into Q108.
The next challenge is taping out Shanghai by Aug. Since it's a shrink it shouldn't take as long to finalize it. Montreal will be a little more as it will require an additional crossbar or DC link.
But in the end, almost everything is riding on a Barcelona September.
The journalist was able to reflect the atmosphere on the street about AMD's current opperation. Though, the article is full of questionable statements, seems like the Andrey Kuzin has only seen and has understanding of Russian bussiness, where bussiness deals are made through corruption.
The other sad thing, is that his understanding of economics is also basic, and even knoledge in computers is stange, (quote- "GeForce 8500/8600 - a superb product"..). As I said, this article "the word on a street", not woth much. The forecast about AMD's bussiness from seriuos finance firm would be much more welcome.
I said they should stop lowering prices, but Intel wouldn't let up. Now Intel is planning to make quad core the norm (Q6600 for $266). That will be the worst thing for the whole industry and more so for AMD.
Why is this the worst thing for the industry? you're saying competition is bad for the consumer and the industry? providing better performance for your $$ is worse for us? :?
Intel is said to not want to put AMD out but their pricing is saying something else. As the company with the REAL ability to set prices, they flirt dangerously close to illegality by making it nearly impossible for AMD to turn a real profit
Please reference the law to which Intel is 'flirting dangerously' close to by lowering their prices
Quote :
I have also said many times that the industry will buoy AMD as much as possible not because then Intel would have a monopoly but because of the channel infrastructure devoted to AMD products. 20% of a few hundred million PC sales is no small thing.
they flirt dangerously close to illegality by making it nearly impossible for AMD to turn a real profit.
Please indicate the law you refer to.
If this law exists, I have a number of executives at GM, Ford, & Chrysler who would be delighted to talk to regarding their corncerns with Toyota and Honda.
Oh wait.. Toyota and Honda build betters cars than the "Old Three" automakers, and hence people buy them.......
The Courts have essentially ruled that predatory pricing is when you sell below cost. Given the multi-billions a year Intel makes in net profit, the "below cost argument" is a heck of a stretch.
Intel is said to not want to put AMD out but their pricing is saying something else. As the company with the REAL ability to set prices, they flirt dangerously close to illegality by making it nearly impossible for AMD to turn a real profit.
Though I often disagree with your assessment of various topics, I usually just ignore it a move on. However, I really need to point this out so others are not confused by your incorrect statements.
There is absolutely nothing illegal about Intel pricing their products such that AMD cannot "turn a profit". Nothing at all. It is not Intel's job to make sure AMD can make money. Even if Intel was a monopoly, which they are not, it would still be legal to price their products however they see fit as long as THEY (Intel) are still making a profit on them.
The only illegal situation would be if Intel priced their products so low such that they themselves lost money on them. But since Intel still has a 40+% gross margin, they are nowhere near that area of pricing.
AMD's inability to compete and run a business properly is not Intel's problem.
AMD initiated the price war because they could not compete on a technology leadership basis because they dropped the ball and couldn't get their own products out, so they continued to drop prices.
You'll also notice that every time Intel drop's prices, they introduce new better products at the higher prices SKUs. Again, it is not Intel's problem that AMD can't seem to keep up. It appears that it is business as normal at Intel, they introduce new products and decrease the prices of the older ones. It looks "predatory" to you simply because of AMDs inadequate products, they are simply not competitive any more.
So sure, there will be a $266 Q6600 in July/September, but there will also be better ones at the $400, $550, and $999 price SKUs. AMD just keeps being pushed further down the totem pole because of their own issues with lack of good, competitive products.
By your logic above, I could start a horribly mismanaged, inefficient company that sells build-it-yourself furniture. All of a sudden IKEA is "illegal" because my company sucks and I can't compete.
Why is this the worst thing for the industry? you're saying competition is bad for the consumer and the industry? providing better performance for your $$ is worse for us? :?
Of course it's worse for us. Intel is literally cutting the legs out from under AMD. If AMD goes under there will be no competition for intel which will slow down the innovation in future CPU's. It would also drastically increase the price of processors since there is no one to compete with. If AMD goes under..We will be seeing highly priced processors as well as the same technology being pushed for years without much advancement. For those that keep saying they love the prices and bash on AMD....Just wait and see what happens if they go under..You won't be happy anymore.
It's currently a really bad situation for AMD..I'm getting a new rig in a few months and was waiting for the x38 and penryn...I'mma wait for barcelona also and pray that AMD can take the performance crown although it seems unlikely. I'd much rather buy an AMD product to sustain the company and keep the Duopoly alive ...lol...
Although I'd like to say I'm no fanboy of either company..I have AMD rigs and intel..Whoever has the top performer gets my cash..I'm just hoping Barcelona can have a little leap over penryn if at all to help keep the company alive >_<.
Intel is said to not want to put AMD out but their pricing is saying something else. As the company with the REAL ability to set prices, they flirt dangerously close to illegality by making it nearly impossible for AMD to turn a real profit.
Though I often disagree with your assessment of various topics, I usually just ignore it a move on. However, I really need to point this out so others are not confused by your incorrect statements.
There is absolutely nothing illegal about Intel pricing their products such that AMD cannot "turn a profit". Nothing at all. It is not Intel's job to make sure AMD can make money. Even if Intel was a monopoly, which they are not, it would still be legal to price their products however they see fit as long as THEY (Intel) are still making a profit on them.
The only illegal situation would be if Intel priced their products so low such that they themselves lost money on them. But since Intel still has a 40+% gross margin, they are nowhere near that area of pricing.
AMD's inability to compete and run a business properly is not Intel's problem.
AMD initiated the price war because they could not compete on a technology leadership basis because they dropped the ball and couldn't get their own products out, so they continued to drop prices.
You'll also notice that every time Intel drop's prices, they introduce new better products at the higher prices SKUs. Again, it is not Intel's problem that AMD can't seem to keep up. It appears that it is business as normal at Intel, they introduce new products and decrease the prices of the older ones. It looks "predatory" to you simply because of AMDs inadequate products, they are simply not competitive any more.
So sure, there will be a $266 Q6600 in July/September, but there will also be better ones at the $400, $550, and $999 price SKUs. AMD just keeps being pushed further down the totem pole because of their own issues with lack of good, competitive products.
By your logic above, I could start a horribly mismanaged, inefficient company that sells build-it-yourself furniture. All of a sudden IKEA is "illegal" because my company sucks and I can't compete.
That what was said about Netscape. Intel has already been found to be "using their monopoly illegally." AMD has already successfully litigated against them to the tune of $1B.
Barriers to entry aren't per se illegal but Centrino can almost be compared to IE.
Maybe you should read this and send it to Hector and Paul.
Why is this the worst thing for the industry? you're saying competition is bad for the consumer and the industry? providing better performance for your $$ is worse for us? :?
Of course it's worse for us. Intel is literally cutting the legs out from under AMD. If AMD goes under there will be no competition for intel which will slow down the innovation in future CPU's. It would also drastically increase the price of processors since there is no one to compete with. If AMD goes under..We will be seeing highly priced processors as well as the same technology being pushed for years without much advancement. For those that keep saying they love the prices and bash on AMD....Just wait and see what happens if they go under..You won't be happy anymore.
It's currently a really bad situation for AMD..I'm getting a new rig in a few months and was waiting for the x38 and penryn...I'mma wait for barcelona also and pray that AMD can take the performance crown although it seems unlikely. I'd much rather buy an AMD product to sustain the company and keep the Duopoly alive ...lol...
Although I'd like to say I'm no fanboy of either company..I have AMD rigs and intel..Whoever has the top performer gets my cash..I'm just hoping Barcelona can have a little leap over penryn if at all to help keep the company alive >_<.
Intel is simply executing on its roadmap while AMD is not. AMD has always been a 2nd tier chipmaker and always will be. They had a good run, they're simply falling back to their old habits. Intel dropping prices to make room for newer better products. It is good for the customer to have competition between both suppliers, enough said. AMD going under is not Intel's fault as this is not a charity contest, nor is chipmaking equivalent to making cheese.
Intel is simply executing on its roadmap while AMD is not. AMD has always been a 2nd tier chipmaker and always will be. They had a good run, they're simply falling back to their old habits. Intel dropping prices to make room for newer better products. It is good for the customer to have competition between both suppliers, enough said. AMD going under is not Intel's fault as this is not a charity contest, nor is chipmaking equivalent to making cheese.
Actually it's quite the opposite so I'd have to disagree with you. Intel was and still is one of the largest processor manufacturers and had virtually no competition. They got lazy and their products weren't really pushing innovation. AMD was the company that surprised intel and averted their gaze back to reality from it's prior goal profit...The pentium 3's were nice...The northwoods were also pretty good processors. But AMD's Athlon and X2 series were truly fantastic processors....It's Intel that has come out of their old habits and realized they need to push farther to earn the money they take in from their customers. With their staff and resources it shouldn't be a problem...Which ATM is what they're doing in response to AMD taking the throne for a few years.
AMD in my eyes aims to innovate..They don't slap two single core or two dual cores and slam them together for Dual/Quad core solutions as we saw with the early pentium d and the current quad cores. They engineer their products and make sure every core interacts with efficiency. Although they do tend to take a long while to release their products which is hurting them. They as well don't have the funds or staff intel has which is a big disadvantage as it takes them longer to release their new cpu's.
IMO...AMD is truly a fantastic company in a difficult place. They compete against a bigger and vastly better funded company. Which with those assets it makes it easier to strive forward ahead of the competition..
Just incase...For those that say intel processor perform better, give off less heat, take less power, and all that normal jazz....Obviously..They are on 65nm while there are no AMD 65 nm's out. Don't compare Core 2 duo to the X2's...They are 90 nm...Intel has less heat, voltage, etc., because of that fact. They are also ahead of schedule and about to release 45nm which is another slap in AMD's face. Intel has the funds, staff, and fabs compared to AMD...Easier for them to push to smaller dyes unlike AMD. AMD might be behind intel...But at least they have the drive to create a completely new processor which unites 4 cores in a unique way...Even though they are paying dearly for it atm they drive to Innovate...With intels money and staff...The losses to AMD's Athlon and X2 shouldn't of happened...They got extremely lazy. Now they are paying AMD back 10 fold by slashing their legs out from under them and pushing the envelope full force.
But what I've said doesn't mean I'm against intel...If I had a choice between barcy and penryn I'd choose penryn atm...Whoever has the top crown gets my dollar. But I have to atleast give respect where it's deserved. Is AMD truly a smarter choice?...No...But at least they push themselves...It's true that AMD will in my mind always be behind intel in terms of funds, staff, production....But they have the drive to innovate....They deserve our respect for that as well as respect for making them drive intel to deliver a better product, which they have. Let's just hope it works both ways as each company pushes the envelope for better products for the consumer. But with intel's financial background and staff...It's quite harder for AMD to live up.
