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"AMD Must Double Processor Market Share to Survive"

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May 6, 2008 9:33:28 PM

Quote:
Advanced Micro Devices needs to more than double its share of the microprocessor market to survive, according to a brief filed by the company's lawyers in its antitrust lawsuit against Intel.

At the end of 2007, AMD had 13 percent of the processor market, "less than half of what it requires to operate long-term as a sustainable business," the brief said, explaining that Intel's alleged efforts to shut the company out of the processor business had largely succeeded.

"Measured on a revenue share basis, AMD made little progress growing its slice of the pie," it said.

The argument that Intel's alleged anti-competitive behavior has so hurt AMD that its future is in jeopardy is crucial to the company's claims for relief, including damages. But the claims could further spook corporate customers already wary of the company's financial troubles....

AMD Must Double Processor Market Share to Survive
© 1998-2007, PC World Communications, Inc.
May 6, 2008 9:49:17 PM

Once upon a time, AMD didn't exist, and the world somehow managed. Should AMD pass from the scene, life will go on, leaving room for a more competently run company to compete with Intel.
May 6, 2008 9:55:50 PM

Too bad ATI will go down if they do, ATI made good products.
Related resources
May 6, 2008 10:08:52 PM

For all the fanboys that are about to come out and say the ship isn't sinking, the quote came from AMD employees.
a b à CPUs
May 6, 2008 10:12:25 PM

:ouch:  That hurts.
a b à CPUs
May 6, 2008 10:40:01 PM

for consumer's sake I hope that doesn't happen.... We need the competition to keep prices down
May 6, 2008 10:57:25 PM

AMD's not going anywhere! Companies this large and with this amount and kind of resources/technology dont just disapear...They suck at making CPU's that compete with Intel's high end but where is most of the market at?

Hell if they ever did go under i would just order a new intel rig and have it in 3 day's with no regret's.
May 6, 2008 11:07:18 PM

TechnologyCoordinator said:
For all the fanboys that are about to come out and say the ship isn't sinking, the quote came from AMD employees.


The quote came from AMD's lawyers who are trying to get an antitrust judgement against Intel. That's a big difference from a statement made by a normal employee.

The caveat here is that AMD needs to double market share if they are to sustain their current business model without restructuring. However, AMD has already begun altering their business model and there is rampant speculation that they will start outsourcing some of their manufacturing.

May 6, 2008 11:09:52 PM

what a joke

first off, ati can survive on ati alone, amd could fire all amd staff and close all offices and just run as ati!

i love things "like must double" no 80% or 63.78% is no enough only 100% increase in sales will work - what a joke.

LET ME MAKE THIS CLEAR read my posts on stocks prices on intel they are dead on - intel is raising prices and amd will survive since intel will let them.

as predicted the q9300 does not oc as much better then the q6600 - most will say who cares that is less then 1% of the market - but it makes all the difference. As intel moves the 1600fsb the prices are going up, to beat a q6600 now you need a $500 q9550 cpu you can not even get. Why sell q9550 when you can sell qx9650's?

AMD stock is going up on this bad news, typical, what does this all mean? It means AMD stock did bottom, look for my posts months ago.

ATI, finally has its act together and the new 700 series is out in few weeks.

AMD will do what intel did, copy intel, amd is already doing it with 12 core cpu - yes the the old intel 840 technology lives!

2 crappy tri cores (broken quads in package) = 6 core cpu to fight intel's quad.

the $69 question is will software come to amd's rescue with a new mega thread add on needed to make 12 core or 16 core cpus work.

you said 16 cores? lets see 2 quads with hyper threading is a 16 core cpu!

why would intel make a 16 core cpu? they most know that a multithreading software change is coming that will allow all programs to work.

ok enough rambling bs - when there blood in steet its time to get in and AMD is bleeding bad. even if i am wrong ibm will pay $5 with ben bernanke's help like bear stern
May 7, 2008 2:08:25 AM

As long as ATI remains competitive, I don't foresee their demise.
May 7, 2008 2:11:19 AM

xx12amanxx said:
AMD's not going anywhere! Companies this large and with this amount and kind of resources/technology dont just disapear...They suck at making CPU's that compete with Intel's high end but where is most of the market at?


Yes, AMD makes decent mid-range desktop stuff. However, what they don't make is a profit; something they desperately need to stay in business. They have lost investor confidence and need to build it back up by showing a quarter that is at least even CLOSE to being in the black.
May 7, 2008 8:53:15 AM

Aintry said:
Once upon a time, AMD didn't exist, and the world somehow managed. Should AMD pass from the scene, life will go on, leaving room for a more competently run company to compete with Intel.

Yah right!
Before AMD, there was no silicon gate, Intel was a $100K startup, and noone had an IC.
Quote:
Should AMD pass from the scene, life will go on, leaving room for a more competently run company to compete with Intel
Sure, all it will take is an x86 licence, the best minds on the planet in chip design, an army of coders and a couple of $10B fabs. Go for it.
May 7, 2008 12:56:57 PM

Just_An_Engineer said:
The quote came from AMD's lawyers [...]

Quote:
... according to a brief filed by the company's lawyers in its antitrust lawsuit against Intel.

I grant you that lawyers may not be entirely truthful when representing their clients. The brief no doubt is heavily biased toward the AMD point of view, but with the brief filed in court, speaking about a publicly traded company, they won't want to speak out carelessly.

May 7, 2008 1:01:41 PM

Speaking of AMD, anyone who bought their stocks at $5 just made out yesterday. I thought about doing it but it turns out I missed out on a 1K profit in one day.
May 7, 2008 1:09:25 PM

First off i seriously doubt AMD have that low market share. In a total view.
Maybe in Enthusiast market, well, that probably. But not generally.

Ill give this example. I work in a Customer support multinacional. More than half our PCs are AMD. Just for one reason. For the work we do, we dont need no Q6600. Hell, we wont even notice much if we had. Some work in Linux, some in Windows. This is a small "workplace". We have more than 300 "terminals".

AMD cpus, make the PCs, cheaper, ussually use less Electricity, and for the work we do, suits us perfectly.
This Doomsday post seem to be a bit off the news rolling around and ignoring the war between ATi/AMD , Intel and Nvidia.
That is on the enthusiast market.

As for my "workstation" its a AMD 4000+ X2 with a Radeon X1300. More than enough for the work i do.
I do costumer support FOR companies. Most computers are AMD to reduce to TCO (Total Cost of Ownership). I dont have the global view, but i can say i do have a nice sample.
May 7, 2008 1:09:35 PM

dragonsprayer said:
ATI, finally has its act together [...]

Comment retracted... dragonsprayer was talking about ATI, not AMD. (I should wait until I'm awake before posting)
dragonsprayer said:
2 crappy tri cores (broken quads in package) = 6 core cpu to fight intel's quad.
After all their talk about having "native" quads you think they'll go with a glued 6 core? The backlash will be thunderous.

dragonsprayer said:
lets see 2 quads with hyper threading is a 16 core cpu!
Actually, it's not.
May 7, 2008 2:03:12 PM

Quote:
Problem: profits just don't come from market share, for the price AMD's best are going their gonna lose...... I mean like you can still sell orange below cost to undercut your rivals and you'll have a nice market share, but are you gonna sink?


If you only sell 1 product, you will.
AMD have.

CPUs divided in two main categories.
- Enterprise
- Home

VPUs
- Enterprise
- Home

And the still have more smaller bussines from chipsets to TV Cards.
If one of the bussiness is giving low profit, or none at all, there isnt much of a problem.
You will win less money but have MORE market share. I read in daily tech (if recall correctly), AMD sold the CPUs( Barcelona Core) for a TOP 100 cluster/server for less the a dollar each to the chinese government. But of course we are talking about a Top100 cluster/server. It will be in 7 or 8 place world wide. Something like that, cant recall correctly.

Dunno if you see it like this, but i think its a fine way to enter the chinese market. Its a really "small" market, and its a really "bad" move to have one of the most powerful machines in that country.

My 2 cents.
a b à CPUs
May 7, 2008 3:04:24 PM

I'm going to take a big swig of AMD koolaid and ...

pray

"Dearly beloved, we are gathered here today ... oops sorry ...

start again ...

"As I walk through the silicon valley of the shadow of Intel I shall fear no further share drops for thou (AMD Koolaid drinkers) art with me ...

Shall I go on??

May 7, 2008 3:45:19 PM

Reynod said:
I'm going to take a big swig of AMD koolaid and ...

pray

"Dearly beloved, we are gathered here today ... oops sorry ...

start again ...

"As I walk through the silicon valley of the shadow of Intel I shall fear no further share drops for thou (AMD Koolaid drinkers) art with me ...

Shall I go on??


Your post was enlighted, you shared a imense know how and it a was a foward step to the enrichement of this forums.
If ever move abroad and go work to Intel, i bet both average IQs (from your country and Intel Crew) would go up.

NEXT !!!
May 7, 2008 4:56:05 PM

spongebob said:
I grant you that lawyers may not be entirely truthful when representing their clients.


Entirely truthful? :D 

May 7, 2008 5:26:08 PM

Just_An_Engineer said:
The quote came from AMD's lawyers who are trying to get an antitrust judgement against Intel. That's a big difference from a statement made by a normal employee.

The caveat here is that AMD needs to double market share if they are to sustain their current business model without restructuring. However, AMD has already begun altering their business model and there is rampant speculation that they will start outsourcing some of their manufacturing.



AMD wouldn't lie or exaggerate! They're holy, remember!


I do see your point, they may be exaggerating the truth a little bit to try to make a case against Intel.
May 8, 2008 5:05:04 AM

AMD has a big announcement today. Grab the KY ATI....
May 8, 2008 5:54:23 AM

Quote:
Its not really that bad is it? AMD's coming up with newer processors and the SB750 southbridge looks pretty good.

AMD is selling more chips now than they ever had before.
I'm not sure that thier present financial situation isn't contrived.
Historicly, AMD has used low share points to buy back shares. They have used the profit from reselling those shares, to build fabs etc. It doesn't hurt thier case in the courts either. A lot of the hurt will go away, once the cost of the Ati aquisition is covered.
Hector has always maintained that AMD needs a 30% marketshare to be profitable. They put several quarters of reasonable profits together, with far less % than that. What they really need the 30% for is to break the Intel monopoly.
My last build was an x2 5600. Cost wise, it was that or an E4500.
I know the Intel fanbois will scream, but that was no chioce at all.
For a lot of apps, the triple cores are looking good as well. Many apps can use more than two cores, but dont seem to get much from 4.
AMD will cry and scream that they are being raped, but if the world doesn't go too deep into a recession, AMD will probably see it's first profitable quarter (at least in a while) at the end of the year.
May 8, 2008 6:38:28 AM

Q3 apparently is the one to watch.
May 8, 2008 3:03:58 PM

Quote:
^ Currently pretty much all low-end builds are AMD. Low end is the biggest market share by far!


It's also the lowest profit margin. From what I remember when I was working for a chip manufacturing company, our high-end chips had around 20x the profit margin of the mid-range chips, and closer to 100x the profit of the low end; so a single sale of a high-end chip made as much profit as selling nearly 100 low-end chips.

That said, if you can keep your costs under control, owning the low-end market isn't a bad place to be. But it takes a lot of discipline to do that effectively; shaving a few cents off the cost of a chip can save a million dollars or more.
May 8, 2008 4:12:16 PM

MarkG said:
It's also the lowest profit margin. From what I remember when I was working for a chip manufacturing company, our high-end chips had around 20x the profit margin of the mid-range chips, and closer to 100x the profit of the low end; so a single sale of a high-end chip made as much profit as selling nearly 100 low-end chips.

That said, if you can keep your costs under control, owning the low-end market isn't a bad place to be. But it takes a lot of discipline to do that effectively; shaving a few cents off the cost of a chip can save a million dollars or more.


And AMD is slated to release 45nm phenom's with improved speed and up to 6mb on cache!! That's going to save precious cash and generate a tab bit more revenue.

Ati's planned release of the 4k series coming in the next week or two "seems" to be a big hit...Time will tell but one things for SURE! AMD is doing better now than what they where doing 4 mo ago.
May 8, 2008 9:27:29 PM

xx12amanxx said:
...but one things for SURE! AMD is doing better now than what they where doing 4 mo ago.
Oh yes! These recent announcements run my applications much faster than their old announcements. And they're more profitable, too.
May 8, 2008 10:10:07 PM

Quote:
"In fact Reynod, will you forum-marry me?"



I feel copied off of....

I will license my line to you, at a good price.
May 9, 2008 7:23:37 AM

Jake_Barnes said:
Quote:
Advanced Micro Devices needs to more than double its share of the microprocessor market to survive, according to a brief filed by the company's lawyers in its antitrust lawsuit against Intel.

At the end of 2007, AMD had 13 percent of the processor market, "less than half of what it requires to operate long-term as a sustainable business," the brief said, explaining that Intel's alleged efforts to shut the company out of the processor business had largely succeeded.

"Measured on a revenue share basis, AMD made little progress growing its slice of the pie," it said.

The argument that Intel's alleged anti-competitive behavior has so hurt AMD that its future is in jeopardy is crucial to the company's claims for relief, including damages. But the claims could further spook corporate customers already wary of the company's financial troubles....




As read between the lines:

Quote:
Advanced Micro Devices needs to more than double its share of the microprocessor market to survive, according to a brief filed by the company's lawyers in its antitrust lawsuit against Intel.

At the end of 2007, AMD had 23 percent of the processor market, but only 13 percent of the market revenue "less than half of the revenue it requires to operate long-term as a sustainable business," the brief said, explaining that AMDs alleged efforts to produce the "ultimate enthusiast platform" and the 40%-faster-than-the-competition-quadcore had largely failed, forcing it to sell its products at garage sale prices, just to minimize market share loss against Intels latest generation of highly successful, proven products.

"Measured on a revenue share basis, AMD threw away any progress it had previously made growing its slice of the pie, when it threw away its performance and value leadership" it said.

The argument that Intel's alleged anti-competitive behavior and not AMDs actual failure to deliver the products it promised has so hurt AMD that its future is in jeopardy is crucial to the company's claims for relief, including damages, since if the court should realize that AMD shot itself in the foot with overhyped underperforming products, AMD wont see a penny of the cash they so desperately need to offest their incompetance. But the claims could further spook corporate customers already wary of the company's recent research, design and manufacturing ineptitude....
May 9, 2008 9:53:19 AM

turpit said:
As read between the lines:

Quote:
Advanced Micro Devices needs to more than double its share of the microprocessor market to survive, according to a brief filed by the company's lawyers in its antitrust lawsuit against Intel.

At the end of 2007, AMD had 23 percent of the processor market, but only 13 percent of the market revenue "less than half of the revenue it requires to operate long-term as a sustainable business," the brief said, explaining that AMDs alleged efforts to produce the "ultimate enthusiast platform" and the 40%-faster-than-the-competition-quadcore had largely failed, forcing it to sell its products at garage sale prices, just to minimize market share loss against Intels latest generation of highly successful, proven products.

"Measured on a revenue share basis, AMD threw away any progress it had previously made growing its slice of the pie, when it threw away its performance and value leadership" it said.

The argument that Intel's alleged anti-competitive behavior and not AMDs actual failure to deliver the products it promised has so hurt AMD that its future is in jeopardy is crucial to the company's claims for relief, including damages, since if the court should realize that AMD shot itself in the foot with overhyped underperforming products, AMD wont see a penny of the cash they so desperately need to offest their incompetance. But the claims could further spook corporate customers already wary of the company's recent research, design and manufacturing ineptitude....


Now can this be the end of Intel being Evil for their alleged practices... Are people saying AMD are just as bad for lying over the last year and breaking many promises to its devoted fans and followers..


And start a phrase of AMD being dum and stupid in the first place....

I bet Thunderman is considering his next upgrade options very carefully.

Baron Matrix - for where art though. Come on down the feelings good here in camp TOMS.

Nahaleem is looking more appetizing that a cool soda with lemon and ice in it...




a b à CPUs
May 9, 2008 9:54:39 AM

Jeez I could get booted off the forums for answering that question.
May 9, 2008 10:16:17 AM

Just both change your profiles to say you are from Louisiana. [/Or just say NO!!!]
a b à CPUs
May 9, 2008 10:53:33 AM

umm ... help me out here.
a b à CPUs
May 9, 2008 2:53:02 PM

http://www.betanews.com/article/Evidence_the_worst_may_...

Still ... way down from the 20% high in 2006 ... if that was their best effort?

If someone has a breakdown on the market over time could they please post it so we can take a peek?

Just trying to stay on topic after the last cold shower ...

May 9, 2008 4:34:38 PM

Reynod said:
http://www.betanews.com/article/Evidence_the_worst_may_...

Still ... way down from the 20% high in 2006 ... if that was their best effort?

If someone has a breakdown on the market over time could they please post it so we can take a peek?

Just trying to stay on topic after the last cold shower ...



Yes, and of course that was all Intels fault. Not AMDs fault for failing to deliver the products it said it would.
May 9, 2008 4:54:38 PM

I agree with Tuprit on this one.

Back in the P4 vs Athlon 64 days I was singing AMD's praises.

Phenom seems to be a step backwards for AMD.
May 9, 2008 9:29:54 PM

turpit said:
Yes, and of course that was all Intels fault. Not AMDs fault for failing to deliver the products it said it would.


It seems to me that the argument is more that AMD was prevented from selling more of their processors at higher margins back when they did hold the performance title. Remember, back in 2005/2006 the Athlon 64's and X2's were clearly superior to their Prescott / Pentium D counterparts and yet they never garnered nearly as large a share of the market as they probably should have.

In my opinion at least, AMD's argument is that they lost a lot of potential profit during this period due to Intel's alleged shady tactics. This is money that could have been used to devote more resources to Phenom / Barcelona and perhaps prevent some of the delays and shortcomings that have happened since.

May 9, 2008 10:21:04 PM

Just_An_Engineer said:
It seems to me that the argument is more that AMD was prevented from selling more of their processors at higher margins back when they did hold the performance title. Remember, back in 2005/2006 the Athlon 64's and X2's were clearly superior to their Prescott / Pentium D counterparts and yet they never garnered nearly as large a share of the market as they probably should have.

In my opinion at least, AMD's argument is that they lost a lot of potential profit during this period due to Intel's alleged shady tactics. This is money that could have been used to devote more resources to Phenom / Barcelona and perhaps prevent some of the delays and shortcomings that have happened since.


You got it. But dont forget. This isnt just about OEMs. Intel puts its dirty paws aswell. For example Media Markt in my country DOESNT see ANY AMDs. this all because a cash back deal with intel. This inside informacion costed me a few beers and a good bootle of wine.
a b à CPUs
May 9, 2008 10:43:27 PM

TechnologyCoordinator said:
Back in the P4 vs Athlon 64 days I was singing AMD's praises.



Offkey, no doubt :D 

There's an interesting take on this over at overclockers.com. Basically Ed thinks this is just a ploy by AMD to get another dumb investor to pony up more cash. Maybe it's working - AMD closed up again today, almost $7 a share. Of course, this is about half of what it was going for a year ago.
May 10, 2008 6:16:46 AM

Just_An_Engineer said:
It seems to me that the argument is more that AMD was prevented from selling more of their processors at higher margins back when they did hold the performance title. Remember, back in 2005/2006 the Athlon 64's and X2's were clearly superior to their Prescott / Pentium D counterparts and yet they never garnered nearly as large a share of the market as they probably should have.

In my opinion at least, AMD's argument is that they lost a lot of potential profit during this period due to Intel's alleged shady tactics. This is money that could have been used to devote more resources to Phenom / Barcelona and perhaps prevent some of the delays and shortcomings that have happened since.



You mean back when the 939 X2 3800s were going for over $300USD a pop vs $50 USD a pop today, AMD ran up to capacity on the 90nm process as it went from 16.2% overall market share to 25.3% market share? That 2005-2006? Yes, I remember it well. And the numbers dont support your theory as AMD consumed as much of the market as they were capable of, at high high margins.

This is the same argument that just went on in the "Selling Lawsuits AMD Vs Intel" thread, and the same debate that pops up at least once a quarter: Did anything Intel allegedly do, actually impact AMDs position, or not. If Intel spent money to hold AMD down, then it was wasted as AMD had hefty margins during the 2005-2006 period and was capcity constrained.

Im so sick of this perpertually recuring debate, I think I just may sticky one thread and dump all the debates in it
May 10, 2008 7:08:59 AM

turpit said:
You mean back when the 939 X2 3800s were going for over $300USD a pop vs $50 USD a pop today, AMD ran up to capacity on the 90nm process as it went from 16.2% overall market share to 25.3% market share? That 2005-2006? Yes, I remember it well. And the numbers dont support your theory as AMD consumed as much of the market as they were capable of, at high high margins.

This is the same argument that just went on in the "Selling Lawsuits AMD Vs Intel" thread, and the same debate that pops up at least once a quarter: Did anything Intel allegedly do, actually impact AMDs position, or not. If Intel spent money to hold AMD down, then it was wasted as AMD had hefty margins during the 2005-2006 period and was capcity constrained.

Im so sick of this perpertually recuring debate, I think I just may sticky one thread and dump all the debates in it

Show me!! In 05, fab 30 averaged <12k WSPM. By april of 06 fab 30 was doing 30k WSPM. They might have been considered constrained in april, but that was the month that fab 36 began shipping product for revinue.
http://www.theregister.co.uk/2008/05/05/amd_intel_brief_may_5_2008/
May 10, 2008 7:38:44 AM

In the past few years there have been three major rulings on monopoly plactice. In all three cases, the defendant has been ruled against because the used exclusivity, or practical exclusivity to condition discounts and rebates.
The three cases were Michelin, British Airways, and Intel (JFTC ruling).
Dell's deal with Intel was conditioned upon exclusivity.
Should the U.S. court rule in favour of Intel, they will be in breatch of precident. Since U.S. law is based in British Common Law, that is a slippery slope.
May 10, 2008 8:07:00 AM

Nehalem will have to surpass many more bumps than PHENOM did..they talk about new arch, new chipset, integrated IMC...i bet u that the first results won't be as thriling as u think..but then again...the myght just beat AMD at there own game (wint the IMC and quikpath...bla bla bla)...I'm just wondering at what prices????
a b à CPUs
May 10, 2008 9:40:14 AM

Yeah ... dump all of the facts into the sticky .... just the facts on market share over the last 5 years.

Sticky facts ...

not slippery facts ...

othwise you end up in the wrong hole ...
May 10, 2008 8:32:33 PM

endyen said:
In the past few years there have been three major rulings on monopoly plactice. In all three cases, the defendant has been ruled against because the used exclusivity, or practical exclusivity to condition discounts and rebates.
The three cases were Michelin, British Airways, and Intel (JFTC ruling).
Dell's deal with Intel was conditioned upon exclusivity.
Should the U.S. court rule in favour of Intel, they will be in breatch of precident. Since U.S. law is based in British Common Law, that is a slippery slope.



Precident, in japanese rulings, means nothing. Ever here of a "japanese inspection"? Look it up.
May 10, 2008 8:38:12 PM

endyen said:
Show me!! In 05, fab 30 averaged <12k WSPM. By april of 06 fab 30 was doing 30k WSPM. They might have been considered constrained in april, but that was the month that fab 36 began shipping product for revinue.
http://www.theregister.co.uk/2008/05/05/amd_intel_brief_may_5_2008/



You show me where I said they were at capacity in 2005. I didnt because they werent. They hit capacity in H12006. And, as you very well know, shipping for revenue, and shipping in quantity are 2 vastly different things. To say shipping for revenue can lead to the illusion of shipping in quantity, which they (again, as you well know) were most certainly not doing from fab 36.
May 11, 2008 1:33:32 AM

turpit said:
You show me where I said they were at capacity in 2005. I didnt because they werent. They hit capacity in H12006. And, as you very well know, shipping for revenue, and shipping in quantity are 2 vastly different things. To say shipping for revenue can lead to the illusion of shipping in quantity, which they (again, as you well know) were most certainly not doing from fab 36.

And this is relevent to a suit filed on 05?
Just the same, true, they did ramp fab 36 slowly. At the same time, they were reducing output from fab 30. Aside from having Chartered as an alternate, they could have ramped faster, and kept fab 30 operating above capacity for a little longer.
Since part of the point of having fab 30 overproduce in march and april, they had a small buffer, and no need to produce more chips.
!