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Will AMD go bankrupt?

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Will AMD go bankrupt?

Total: 93 votes (12 blank votes)

  • Yes
  • 5 %
  • No
  • 55 %
  • Maybe
  • 9 %
  • I don't know
  • 12 %
  • Can you repeat the question?
  • 0 %
  • They will be bought out by someone
  • 19 %
  • Intel FTW!!!
  • 3 %
a b à CPUs
November 19, 2012 7:44:38 PM

AMD has hit hard times. They are set to remain unprofitable until late 2013. They are in a tight spot. Do you think AMD will go bankrupt? Though there have been buy out rumors, there have been no serious talks.

More about : amd bankrupt

November 19, 2012 10:00:07 PM

Umm you are clearly misinformed, there's obviously serious talks going on. The average consumer doesn't know about it doesn't mean there isn't serious talks.

JPM doesn't get involved if there's no chance for an investment bank to make money. They are involved because there is a pretty good percentage of moving AMD either a portion of its assets or maybe the entire company.
a b à CPUs
November 19, 2012 10:06:13 PM

AMD hired them to explore options. I meant talks with Qualcomm and such. My reason for concern is that AMD owns ATI. And if AMD goes down so will ATI. The cards may still physically work, but what about the drivers? CPUs aren't dependent on drivers like GPUs are.
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a b À AMD
November 19, 2012 10:31:35 PM

montosaurous said:
AMD has hit hard times. They are set to remain unprofitable until late 2013. They are in a tight spot. Do you think AMD will go bankrupt? Though there have been buy out rumors, there have been no serious talks.


Not likely. AMD is experiencing exactly what every maturing tech sector in the past 50 years has experienced, convergence. Tech companies experience hugely positive returns to scale which means that as the gap between two companies widens, it will widen exponentially until one is forced out of the market. The same thing happened to Commodore and Apple in the 90s when they got stomped by Microsoft, and the same thing happened to mainframes in the 70s and 80s when IBM beat out Univac, General Electric, NCR, RCA, Burroughs, and CDC to own the market. The same thing happened to hard disks, enterprise networking, SDRAM, and graphics cards. Many of these companies are still around, they're just no longer serving in those markets. The ones that survive are the ones that know when to cut and run, or manage to reposition their products to open up new markets which is what AMD is doing with their APU lineup.

Competition is great for fledgling markets but any market that focuses heavily on IP and R&D will eventually be dominated by a few key players.
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a c 118 À AMD
November 19, 2012 10:49:38 PM

While AMD is in a precarious financial position, I do not believe they will go bankrupt. However, I do think they need a major restructuring which is likely why JPM is involved. I have not kept up with what AMD's products are, but the sensible thing to do is to sell off some assets that have low profit margins or are loss leaders. For example, I believe they are in the DRAM business, and that is probably something they should get out of. They do not sell DRAM directly to customers. Instead they use it for their own products. Could they sell DRAM in the retail market? Sure but profit margins are thin. They should just sell the DRAM business and simply buy DRAM chips for their products.

I really cannot see Qualcomm wanting to buy AMD. Then again, I don't really follow Qualcomm so while I am not sure how such an acquisition would benefit Qualcomm, I do know that it would be very unlikely Qualcomm would be interested. I would say a private equity firm may decide to acquire AMD and privatize it so that AMD would become a profitable company again in the long run. But, with a market cap of about $1.4 billion, it would be rather risky. If the market cap dipped below $1 billion, then it would pose less of a financial risk. However, the private equity firm would need to a some analysis 1st to determine just what is necessary to be done to make a profit on their investment. PE firms to not buyout firms about to go bankrupt for charity.
a b à CPUs
November 19, 2012 11:32:23 PM

AMD is in some markets they shouldn't be in (DRAM), just like Intel is (SSDs). My biggest concern is that the company will collapse, no longer continue to make products, and all support for their current products will be lost. Like I said CPUs wouldn't matter, but if that expensive GPU no longer works right due to lack of driver support there will be some major concerns.
a b à CPUs
November 19, 2012 11:37:48 PM

Right now I'm even scared to buy an ATI GPU because of this :/ 
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a b À AMD
November 19, 2012 11:54:26 PM

AMD will stabilize soon if they aren't retarded. Which could be the case according to some people but I still think they have enough sense in them.
a b à CPUs
November 20, 2012 12:06:57 AM

MODS close this Intel fanboy thread please!
a b à CPUs
November 20, 2012 12:44:07 AM

I hope they stabilize. I think Piledriver is a good start. The FX 8350 may be lacking in some areas compared to the i5, but it completely destroys it in others. ATI is better than Nvidia at the same price until you hit the 7970 vs GTX 670 and GTX 680. The Radeon 7990 fares well against the GTX 690 though. Also, I am not an intel fanboy, nor do I think most of the answers are.
a b à CPUs
November 20, 2012 1:03:57 AM

montosaurous said:
I hope they stabilize. I think Piledriver is a good start. The FX 8350 may be lacking in some areas compared to the i5, but it completely destroys it in others. ATI is better than Nvidia at the same price until you hit the 7970 vs GTX 670 and GTX 680. The Radeon 7990 fares well against the GTX 690 though. Also, I am not an intel fanboy, nor do I think most of the answers are.


I think you meant "AMD is better than nvidia at a lower price across the board, especially when you hit the 7970 vs GTX 670 and GTX 680"
a b à CPUs
November 20, 2012 1:38:33 AM

unksol said:
I think you meant "AMD is better than nvidia at a lower price across the board, especially when you hit the 7970 vs GTX 670 and GTX 680"


The GTX 680 and GTX 670 beat the Radeon 7970. They are at about equal pricing. However, everything under $400 is owned by ATI.
a c 169 à CPUs
a b À AMD
November 20, 2012 1:47:41 AM

redeemer said:
MODS close this Intel fanboy thread please!


Seems pretty civil so far imo
a c 146 à CPUs
a b À AMD
November 20, 2012 1:55:43 AM

montosaurous said:
The GTX 680 and GTX 670 beat the Radeon 7970. They are at about equal pricing. However, everything under $400 is owned by ATI.


Since when? The 7000 chips are AMDs design why would ATI get any money. Plus hen you look at the chip it says AMD not ATI. I was under the impression that when they got bought out by AMD the company was closed and moved to AMD's headquaters.
a c 169 à CPUs
a b À AMD
November 20, 2012 1:57:22 AM

rds1220 said:
Since when? The 7000 chips are AMDs design why would ATI get any money. Plus hen you look at the chip it says AMD not ATI. I was under the impression that when they got bought out by AMD the company was closed and moved to AMD's headquaters.


You are correct. ATI was acquired in its entirety, AMD has just been slow to completely retire the name.
a b à CPUs
November 20, 2012 2:16:31 AM

ATI is owned by AMD. My point is if AMD crashes, we lose the video cards too, and the drivers.
a c 169 à CPUs
a b À AMD
November 20, 2012 3:04:37 AM

montosaurous said:
ATI is owned by AMD. My point is if AMD crashes, we lose the video cards too, and the drivers.


AMD had half a billion dollars in net income last year. That's a small fraction of what Intel raked in but it's far from the "doom and gloom" that some people seem to be theorizing about.
a b à CPUs
November 20, 2012 3:29:24 AM

With a set unprofitable 2013.
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a b À AMD
November 20, 2012 3:35:51 AM

Well i hope not.I mean they must not be doing to bad.If they can offer as cheap prices as they do.Plus offer free games lol.I think everything is alright.Nothing to worry about but maybe i am wrong.
November 20, 2012 3:54:40 AM

montosaurous said:
The GTX 680 and GTX 670 beat the Radeon 7970. They are at about equal pricing. However, everything under $400 is owned by ATI.


You should get your facts right, as of Catalyst 12.11 show: http://www.techpowerup.com/reviews/AMD/Catalyst_12.11_P... the Radeon 7970 Ghz Ed. beats the 680 from Nvidia, both do exchange blows in a lot of games but at the end of the day the 7970 is better. Now, some people are saying out there that the latest Nvidia drivers have increase performance to throw things in their favor once again, but the only thing i have seen so far from that claim is a picture Nvidia posted, i haven't seen any test what so ever in any reputable web site. In case this is true this only shows that the best cards from both company are very close to each other in gaming performance and that "who is better" is debatable and could change at any time.

As of your main question my answer is No, they wont go under (at least not for now), they are betting big in their APUs, time will tell if this was the right decision, i think it was.

You also have to understand that AMD was hurt big time after Intel anti-competitive practices, if you dont remember about this, they were found guilty http://www.techpowerup.com/94123/EU-Fines-Intel-a-Recor... and later Intel and AMD came into an out-of-court settlement of 1.25 Billions http://www.bit-tech.net/news/hardware/2009/11/12/intel-... AMD took what ever Intel would gave them at that point but the damage was done, Intel made way more than those 1.25 billions in the time it took for the legal system to actually do something about it.

To be honest at this point i don't get why some people would refuse to buy anything from AMD and then say "they can't compete" of course they have a hard time competing some people just refuse to buy AMD products even when some of them are clearly superior to the competition on their respective price point. For what reason? i don't know, but they expect them to compete with a monster of a company like Intel on every single market without actually giving them money to do so.


Sorry about my English, is not my first language.
November 20, 2012 4:47:32 AM

montosaurous said:
Not on Anandtech

GTX 670 vs Radeon 7970
http://www.anandtech.com/bench/Product/508?vs=598
They trade blows, though the GTX 670 has a slight edge

GTX 680 vs Radeon 7970
http://www.anandtech.com/bench/Product/508?vs=598
Same as the GTX 670, though a little better. Show that the GTX 680 is not worth it's price.

For gaming, ATI cards are the best. But for other things Nvidia wins.


Ok, first of all that is old data, pre Catalyst 12.11, second that's a 7970 and not a 7970 Ghz Ed., third on that data look at the none gaming data there:

SmallLuxGPU 2.0d4
Classroom HDR + Vol - Thousands Of Rays Per Second (Higher Is Better)

23600
7000

DirectX11 Compute Shader Fluid Simulation - Nearest Neighbor
Frames per Second - Higher is Better

115.5
90.2

AESEncryptDecrypt
8K x 8K Image Encrypt - Time in Milliseconds (Lower is Better)

285
304

Don't get me wrong Nvidia has good products and they know how to exploit their strong point, specially using things like CUDA, Physix or Surround 3D gaming but the problem this time around is that they took a huge step in the name of power consumption for their gaming cards and took out most of the power their GPUs had for non-gaming jobs and they took that to their professional/business line.

November 20, 2012 5:00:24 AM

montosaurous said:
Not on Anandtech

GTX 670 vs Radeon 7970
http://www.anandtech.com/bench/Product/508?vs=598
They trade blows, though the GTX 670 has a slight edge

GTX 680 vs Radeon 7970
http://www.anandtech.com/bench/Product/508?vs=598
Same as the GTX 670, though a little better. Show that the GTX 680 is not worth it's price.

For gaming, ATI cards are the best. But for other things Nvidia wins.


Sometimes, for a business, it can be a good thing to go bankrupt. A business like AMD rarely goes bankrupt and liquidates, it would more likely be a restructuring under bankruptcy protection. This basically means that they can renegotiate contracts and restructure their debt. I believe this would be the path AMD would take if they declared bankruptcy.

As for the GPUs, Nvidia has their strengths and AMD theirs, that's why when getting a GPU it really depends on the customers needs and demands.

I don't see AMD folding up anytime soon, they are starting to catch up and are diversifying. Intel diversified and it has gone really well for them. The difference is that Intel had a larger margin for error.

I truly think that if AMD wants to gain a lot of ground, they need to do like Intel did and make themselves a household name. Many of my clients have no idea what AMD is and some that do know think the are a bottom of the barrel, off-brand. They really need to do some advertising in the markets they want to be strongest in. Who hasn't seen an Intel ad or commercial, but who has seen an AMD one other than for GPUs?

I believe AMD will catch up, maybe a die shrink will be needed, who knows. But some advertising would likely go a long way.
a b à CPUs
November 20, 2012 5:10:21 AM

montosaurous said:
ATI is owned by AMD. My point is if AMD crashes, we lose the video cards too, and the drivers.

AMD's formerly-known-as-ATI graphics division is profitable. What that means is that even in a worse-case scenario where AMD goes bankrupt, the company will be broken up into pieces and sold. "ATI" is worth and will continue to be worth a LOT to a lot of investors. What that means is that you won't see AMD's GPUs disappear anytime soon. GCN is working great and it is plenty competitive for Kepler. The reality right now is that AMD as a company is reorganizing their different businesses. They have a variety of divisions in various markets and when things don't go well, you have to streamline and cut costs or risk eventual insolvency. Seriously, no need to get scared about your GPU not getting a driver update! :lol: 
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a b À AMD
November 20, 2012 5:11:46 AM

What is everybody going on about? AMD is dominating in the GPU game.All nvidia has going for them is 660 and 670 the rest of the cards at the prices are a lost cause.
a b à CPUs
November 20, 2012 12:21:14 PM

^ Well performance doesn't equate to profitability, unfortunately. According to IDC, AMD lost something like 10% discrete GPU marketshare to NV last quarter, so NV has something like 65% or more of the total market.

OTOH, AMD's APUs like Trinity have been selling well so I think they have sorta cannibalized their own low-end discrete GPUs.
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a b À AMD
November 20, 2012 12:32:34 PM

^ That sucks!I think NV is slowly but surely losing customers by being so stuck up.Especially with the voltage locking on cards.It will be interesting to see how long they can keep power tripping before enough customers say enough is enough.
a b à CPUs
November 20, 2012 12:47:17 PM

Nope they aren't gonna go bankrupt. The GPUs will keep them afloat and slowly more people have started leaning towards piledriver.
a b à CPUs
November 20, 2012 2:41:08 PM

I like AMD, I really do. I'd probably be happier with an FX 8350 than i5 3750k, since I don't do much gaming. I will probably upgrade to an FX 8350 sometime soon. I'd rather get an ATI card rather than Nvidia, but the whole drivers thing frightened me. I am glad to see that the majority thinks AMD will survive.
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a b À AMD
November 20, 2012 2:47:27 PM

montosaurous said:
I like AMD, I really do. I'd probably be happier with an FX 8350 than i5 3750k, since I don't do much gaming. I will probably upgrade to an FX 8350 sometime soon. I'd rather get an ATI card rather than Nvidia, but the whole drivers thing frightened me. I am glad to see that the majority thinks AMD will survive.
What driver thing ?I think your living in the past drivers are not a nightmare like before it's not been that way for two years now.
a b à CPUs
November 20, 2012 6:04:02 PM

I meant that I would lose support for my card. No drivers, at all.
a c 169 à CPUs
a b À AMD
November 20, 2012 6:44:15 PM

montosaurous said:
I meant that I would lose support for my card. No drivers, at all.


AMD's graphics division is profitable, and they have a large IP library which is quite valuable. Even if AMD goes into restructuring they will keep the graphics division alive and that includes driver support.
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a b À AMD
November 20, 2012 6:59:28 PM

montosaurous said:
I meant that I would lose support for my card. No drivers, at all.
Oh o.k. sorry i misunderstood.
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a c 118 À AMD
November 20, 2012 11:17:20 PM

Pinhedd said:
AMD had half a billion dollars in net income last year. That's a small fraction of what Intel raked in but it's far from the "doom and gloom" that some people seem to be theorizing about.


Actually, what's more important right now for AMD is cashflow. They need to receive money that is owed to them and also pay their expenses in a timely fashion. Without proper cashflow, AMD may still be selling products, but not have cash in hand to pay the bills. Bad cashflow can lower credit ratings which means it is both harder to borrow money and more expensive because of higher interest rates.
a b à CPUs
November 20, 2012 11:37:36 PM

2694058,30,1374406 said:
I like AMD, I really do. I'd probably be happier with an FX 8350 than i5 3750k, since I don't do much gaming. I will probably upgrade to an FX 8350 sometime soon. I'd rather get an ATI card rather than Nvidia, but the whole drivers thing frightened me. I am glad to see that the majority thinks AMD will survive.[/quotemsg

]I'm with you , for my purposes AMD is fine , a good vid card and good to go , I use it for more than gaming , the 8350 should cut my times working on the computer down , the intel will give me almost no advantage for the price .
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a b À AMD
November 21, 2012 12:02:29 AM

The thing i like about AMD is that they give the customer the option to increase voltage on some of the cards. NV instead plays coy and doesn't give it to customers straight.They bully their customers and board partners, which i don't understand why other companies let them.MSI,EVGA,XFX and others should say look you want us to sell your product no problem.Here is how it's going to be we will do it how we please.If not go find someone else to sell your product.
a b à CPUs
November 21, 2012 1:19:07 AM

I think you guys are forgetting that the majority of profits comes from OEMs and others not guys like us... This is where AMD is not doing so great.
Examples include:
Medium+ end PCs (owned by Intel)
higher end laptops (owned by Intel)
tablets/phones (owned by ARM with Intel intruding)
lower end PCs and laptops (AMD has a sizeable share)
servers... (dominated by Intel)
High Performance Compute (AMD has a sizeable share)

And last but not least marketing. AMD needs to do some advertising to get it's image out there for the average Joe. I mean the last time I personally saw an AMD commercial was for the Athlon XP... This is just so important largely because nobody (average consumer) knows who AMD really is but they know Intel and that's not good for AMD.

Just my thoughts, take 'em or leave 'em.
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a b À AMD
November 21, 2012 3:05:57 AM

the OEMs aren't buying AMD cause AMD doesn't feed them money. Intel pretty much blocked AMD out of ultrabooks because of the reimbursement they offer. The OEMs are also can't sell AMD well because intel's marketing is 100x better than AMD's.

Even when the athlon xp was kicking intel's ass, OEMs shipped more intel machines.
a b à CPUs
November 21, 2012 3:27:34 AM

esrever said:
the OEMs aren't buying AMD cause AMD doesn't feed them money. Intel pretty much blocked AMD out of ultrabooks because of the reimbursement they offer. The OEMs are also can't sell AMD well because intel's marketing is 100x better than AMD's.

Even when the athlon xp was kicking intel's ass, OEMs shipped more intel machines.


Intel has always had the majority when it came to OEMs. However, there were more a few years ago then there are now. Intel would be in the position AMD is in if it didn't have a stranglehold over the market and have anti competitive pricing.
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a b À AMD
November 21, 2012 3:57:15 AM

I am pretty sure AMD said they were not going to try and compete with intel anymore as far as desktop cpu goes they pretty much gave up.Feel free to correct me if i am wrong.
a b à CPUs
November 21, 2012 5:07:32 AM

They said they will focus more on value than performance.
a b à CPUs
November 21, 2012 1:45:17 PM

I posted this in the Steamroller thread earlier, but thought it useful enough to post again here: http://seekingalpha.com/article/1022121-amd-cannot-surv...

Quote:
Advanced Micro Devices (AMD) is in serious trouble. In the most recent quarter, the firm swung to an operating loss in its core CPU/APU division to the tune of $114M. This was due to a combination of inventory write-downs on stale inventory, a drop in market share from 18.8% to 16.1%, and lower average selling prices across the board. Intel (INTC) has proven that it is the clear leader here, and given the broad industry shift to more efficient designs in everything from notebooks to big-iron servers, it would take a significant misstep on the chip giant's part for AMD to even come close to building a comparable solution, let alone a better one.

However, AMD -- thanks to its $5.4B acquisition of ATI Technologies -- has traditionally had a strong hand in the discrete graphics business. Discrete graphics chips are used in gaming computers, professional workstations, and even in supercomputers (albeit slightly modified to be floating point co-processors rather than graphics cards). In this space, there's only one competitor: Nvidia (NVDA). Generally speaking, Nvidia has traditionally been the market share leader but the gap between them was generally not too wide (usually a 40-45% share for AMD and 55-60% for Nvidia).

However, the recent market share reports confirm that the balance of power is worsening for AMD.

Q3 2012 - Things Are Looking Lopsided

In Q3 2012, according to the latest data, AMD's share in desktop computers dropped to 35.7% from 40.7%, and in notebooks, it saw share plummet from 44.8% to 34.2%. Of course, as there are only two players in the industry -- it shouldn't be too hard to figure out where those missing percentage points went.

In the quarter, net revenue for graphics was $342M, with net income a startlingly low $18M. In contrast, Nvidia's gaming graphics division saw sales of $739M and an operating income of $193M. Nvidia's professional solutions division -- which is broken out separately for Nvidia but lumped in with graphics for AMD -- turned in a solid $220M in sales and operating income of $100M.

The balance of market share and profits in the graphics business is starting to look eerily like that between Intel and AMD in the CPU space. This has very serious implications.

So, What Does This Mean?

In a nutshell, this means that Nvidia simply has a lot more money to reinvest in its core business. That means stronger R&D, which leads to dramatically better products, better marketing of said products, and a much healthier competitive landscape from the perspective of Nvidia.

An example of this was actually seen with the latest generation of graphics cards. AMD put out its biggest, baddest Radeon 7970 with a 365mm^2 die size and for the first quarter of 2012, managed to take the performance and performance/watt lead with its products. However, Nvidia was able to successfully compete on performance and performance per watt with a chip that only weighed in at 294mm^2. With a 19% smaller die size (this means cheaper to produce), Nvidia was able to sell cards at the same price point as its rival. This meant better margins and higher operating profits than its peer.

Explaining AMD's Market Share Decline

Many will say, "well, AMD's products perform similarly to the Nvidia products in the same price point." Surprisingly enough, they would be correct. On paper and in most gaming benchmarks, AMD's products are extremely competitive across the board. The gap in terms of performance that we see on the PC processor side is simply not there. So what's going on?

Well, it really comes down to a number of things on the consumer side:

Brand equity - Additional "perks" that are not available from AMD cards (3D Vision, PhysX, etc.)
On the brand equity side of things, Nvidia simply takes the cake. Why? Nvidia, first off, has a number of programs and promotions that help customers feel like they are part of a legitimate ecosystem. For example:

GeForce.com - This is a site that Nvidia keeps up that has blogs, game demos, driver updates, promotions for the latest games, contests to win prizes, and community support forums. AMD's Radeon support site offers nowhere near the level of user experience and support. It's also not called "Radeon.com" or anything like that.

The Way It's Meant To Be Played - Nvidia's marketing campaign -- The Way It's Meant To Be Played -- which essentially acts as a "seal of approval" from the game publisher, acts as a powerful "reminder" to gamers that in order to get the full experience of the game, one needs Nvidia hardware.
On the latter point, Nvidia's strong developer relations and software teams do actually enable a few fundamental features critical to the user experience that AMD does not offer. For example:

PhysX - This enables GPU-accelerated physics effects in games that are programmed to support them. Nvidia's software team works with game developers to smoothly and seamlessly get these things integrated. Gamers who want the best generally don't want to have to keep checkbox features unchecked, which is why the scales often tip in favor of Nvidia.

3D Vision - This allows for stereoscopic 3D in PC games, provided that one owns a 3D Vision Kit (a pair of 3D glasses) and the right monitor. A niche market, but something gamers will consider when plunking down hundreds of dollars for their next generation graphics cards. Nvidia works with the game developers to make sure this is implemented in many of the major titles.

Okay, What About In HPC/Professional?

In the professional space, Nvidia is eating AMD's lunch because it simply builds the better mousetrap with much better software/driver support. In a recent review of AMD's latest FirePro professional workstation cards, the verdict -- especially compared to Nvidia's products -- was not favorable:

To be perfectly candid, we found the W8000 and W9000's performance disappointing, and their proposed price/performance ratio isn't so hot either. If AMD had kept to its previous price structure, the W9000 would've slipped in nicely at $2500 and the W8000 at $1149. At $4000 and $1600 against the Quadro 6000 (also $4000) and the Quadro 5000 ($1849) though, AMD's prospects at this time aren't very good. The situation may change with future driver revisions if AMD is able to wring more performance from the GCN architecture in professional applications, but the current state of the software is what it is and the W8000 and W9000's performance didn't scale as expected.

Professionals using these cards to make serious money will not mess around with second best. And, unfortunately for AMD, that's precisely the position that it is in.

But The Next Generation Of Products Can Fix This, Right?

This brings us to the next question: can the next generation of products tip the scales? Well, it's absolutely not too late to try to change course and really buckle down and focus on the graphics space. All of the puzzle pieces are there. The problem, though, is that AMD is spreading itself too thin to be truly effective at anything that it attempts. It doesn't have enough time or money to try to sow a million seeds and hope something starts sprouting.

AMD is in the process of axing its staff as we speak in an attempt to cut costs. While it lays off engineers (and I'm sure the very best and brightest that remain are giving Intel, Qualcomm (QCOM), Nvidia, Samsung (SSNLF.PK), and others a call looking for new jobs), it is simultaneously trying to develop two distinct lines of X86 processor cores, an ARM (ARMH) based system-on-chip for servers, X86 SoCs based on the two aforementioned lines of cores for everything from entry level PCs to servers, and next generation graphics. All while running either money-losing or barely profitable businesses!

Simply put, AMD is trying to do too much with too little, and it needs to buckle down and focus on something. Unfortunately, discrete graphics and HPC accelerators don't seem to be what management -- or Wall Street -- wants. Even if it's the one place where AMD could truly bring the fight to Nvidia.

Nvidia is quickly about to become the Intel of discrete graphics in every sense of the word, and I suspect that the firm will continue to bleed AMD's market share dry until that $18M operating profit swings to an operating loss. And when the discrete graphics part of AMD stops innovating because it has simply run out of money, then this will not only have serious repercussions for its competitive position in the GPU space, but in the integrated graphics space, where Intel is doubling graphics performance with each new processor. There will be no low end for AMD to retreat to since it faces competition from Intel and its own APU products down there.

Things do not look good for AMD in the discrete graphics space. It lost the X86 CPU space by falling too far behind, and it is now about to lose the graphics war for good if it does not continue to innovate where it counts by developing products that carry high margins and sell well. Shifting focus to ARM-servers with SeaMicro fabric all sound great... until you realize that this will likely be a super cutthroat, low-margin business that will be swallowed whole with Intel's upcoming "Avoton" server SoC. Built with Intels' very own, license-fee-free, 22nm cores.

At least Nvidia doesn't have a manufacturing process lead.
a b à CPUs
November 21, 2012 4:18:30 PM

Nvidia won't be the Intel of the discrete GPU space for a long time. They may have a bigger share when it comes to OEM machines, but performance wise ATI is better until you get into the extremely expensive range. A few small perks of owning an Nvidia card do not warrant the loss of performance.
November 21, 2012 4:21:09 PM

fazers_on_stun said:
I posted this in the Steamroller thread earlier, but thought it useful enough to post again here: http://seekingalpha.com/article/1022121-amd-cannot-surv...

Quote:
Advanced Micro Devices (AMD) is in serious trouble. In the most recent quarter, the firm swung to an operating loss in its core CPU/APU division to the tune of $114M. This was due to a combination of inventory write-downs on stale inventory, a drop in market share from 18.8% to 16.1%, and lower average selling prices across the board. Intel (INTC) has proven that it is the clear leader here, and given the broad industry shift to more efficient designs in everything from notebooks to big-iron servers, it would take a significant misstep on the chip giant's part for AMD to even come close to building a comparable solution, let alone a better one.

However, AMD -- thanks to its $5.4B acquisition of ATI Technologies -- has traditionally had a strong hand in the discrete graphics business. Discrete graphics chips are used in gaming computers, professional workstations, and even in supercomputers (albeit slightly modified to be floating point co-processors rather than graphics cards). In this space, there's only one competitor: Nvidia (NVDA). Generally speaking, Nvidia has traditionally been the market share leader but the gap between them was generally not too wide (usually a 40-45% share for AMD and 55-60% for Nvidia).

However, the recent market share reports confirm that the balance of power is worsening for AMD.

Q3 2012 - Things Are Looking Lopsided

In Q3 2012, according to the latest data, AMD's share in desktop computers dropped to 35.7% from 40.7%, and in notebooks, it saw share plummet from 44.8% to 34.2%. Of course, as there are only two players in the industry -- it shouldn't be too hard to figure out where those missing percentage points went.

In the quarter, net revenue for graphics was $342M, with net income a startlingly low $18M. In contrast, Nvidia's gaming graphics division saw sales of $739M and an operating income of $193M. Nvidia's professional solutions division -- which is broken out separately for Nvidia but lumped in with graphics for AMD -- turned in a solid $220M in sales and operating income of $100M.

The balance of market share and profits in the graphics business is starting to look eerily like that between Intel and AMD in the CPU space. This has very serious implications.

So, What Does This Mean?

In a nutshell, this means that Nvidia simply has a lot more money to reinvest in its core business. That means stronger R&D, which leads to dramatically better products, better marketing of said products, and a much healthier competitive landscape from the perspective of Nvidia.

An example of this was actually seen with the latest generation of graphics cards. AMD put out its biggest, baddest Radeon 7970 with a 365mm^2 die size and for the first quarter of 2012, managed to take the performance and performance/watt lead with its products. However, Nvidia was able to successfully compete on performance and performance per watt with a chip that only weighed in at 294mm^2. With a 19% smaller die size (this means cheaper to produce), Nvidia was able to sell cards at the same price point as its rival. This meant better margins and higher operating profits than its peer.

Explaining AMD's Market Share Decline

Many will say, "well, AMD's products perform similarly to the Nvidia products in the same price point." Surprisingly enough, they would be correct. On paper and in most gaming benchmarks, AMD's products are extremely competitive across the board. The gap in terms of performance that we see on the PC processor side is simply not there. So what's going on?

Well, it really comes down to a number of things on the consumer side:

Brand equity - Additional "perks" that are not available from AMD cards (3D Vision, PhysX, etc.)
On the brand equity side of things, Nvidia simply takes the cake. Why? Nvidia, first off, has a number of programs and promotions that help customers feel like they are part of a legitimate ecosystem. For example:

GeForce.com - This is a site that Nvidia keeps up that has blogs, game demos, driver updates, promotions for the latest games, contests to win prizes, and community support forums. AMD's Radeon support site offers nowhere near the level of user experience and support. It's also not called "Radeon.com" or anything like that.

The Way It's Meant To Be Played - Nvidia's marketing campaign -- The Way It's Meant To Be Played -- which essentially acts as a "seal of approval" from the game publisher, acts as a powerful "reminder" to gamers that in order to get the full experience of the game, one needs Nvidia hardware.
On the latter point, Nvidia's strong developer relations and software teams do actually enable a few fundamental features critical to the user experience that AMD does not offer. For example:

PhysX - This enables GPU-accelerated physics effects in games that are programmed to support them. Nvidia's software team works with game developers to smoothly and seamlessly get these things integrated. Gamers who want the best generally don't want to have to keep checkbox features unchecked, which is why the scales often tip in favor of Nvidia.

3D Vision - This allows for stereoscopic 3D in PC games, provided that one owns a 3D Vision Kit (a pair of 3D glasses) and the right monitor. A niche market, but something gamers will consider when plunking down hundreds of dollars for their next generation graphics cards. Nvidia works with the game developers to make sure this is implemented in many of the major titles.

Okay, What About In HPC/Professional?

In the professional space, Nvidia is eating AMD's lunch because it simply builds the better mousetrap with much better software/driver support. In a recent review of AMD's latest FirePro professional workstation cards, the verdict -- especially compared to Nvidia's products -- was not favorable:

To be perfectly candid, we found the W8000 and W9000's performance disappointing, and their proposed price/performance ratio isn't so hot either. If AMD had kept to its previous price structure, the W9000 would've slipped in nicely at $2500 and the W8000 at $1149. At $4000 and $1600 against the Quadro 6000 (also $4000) and the Quadro 5000 ($1849) though, AMD's prospects at this time aren't very good. The situation may change with future driver revisions if AMD is able to wring more performance from the GCN architecture in professional applications, but the current state of the software is what it is and the W8000 and W9000's performance didn't scale as expected.

Professionals using these cards to make serious money will not mess around with second best. And, unfortunately for AMD, that's precisely the position that it is in.

But The Next Generation Of Products Can Fix This, Right?

This brings us to the next question: can the next generation of products tip the scales? Well, it's absolutely not too late to try to change course and really buckle down and focus on the graphics space. All of the puzzle pieces are there. The problem, though, is that AMD is spreading itself too thin to be truly effective at anything that it attempts. It doesn't have enough time or money to try to sow a million seeds and hope something starts sprouting.

AMD is in the process of axing its staff as we speak in an attempt to cut costs. While it lays off engineers (and I'm sure the very best and brightest that remain are giving Intel, Qualcomm (QCOM), Nvidia, Samsung (SSNLF.PK), and others a call looking for new jobs), it is simultaneously trying to develop two distinct lines of X86 processor cores, an ARM (ARMH) based system-on-chip for servers, X86 SoCs based on the two aforementioned lines of cores for everything from entry level PCs to servers, and next generation graphics. All while running either money-losing or barely profitable businesses!

Simply put, AMD is trying to do too much with too little, and it needs to buckle down and focus on something. Unfortunately, discrete graphics and HPC accelerators don't seem to be what management -- or Wall Street -- wants. Even if it's the one place where AMD could truly bring the fight to Nvidia.

Nvidia is quickly about to become the Intel of discrete graphics in every sense of the word, and I suspect that the firm will continue to bleed AMD's market share dry until that $18M operating profit swings to an operating loss. And when the discrete graphics part of AMD stops innovating because it has simply run out of money, then this will not only have serious repercussions for its competitive position in the GPU space, but in the integrated graphics space, where Intel is doubling graphics performance with each new processor. There will be no low end for AMD to retreat to since it faces competition from Intel and its own APU products down there.

Things do not look good for AMD in the discrete graphics space. It lost the X86 CPU space by falling too far behind, and it is now about to lose the graphics war for good if it does not continue to innovate where it counts by developing products that carry high margins and sell well. Shifting focus to ARM-servers with SeaMicro fabric all sound great... until you realize that this will likely be a super cutthroat, low-margin business that will be swallowed whole with Intel's upcoming "Avoton" server SoC. Built with Intels' very own, license-fee-free, 22nm cores.

At least Nvidia doesn't have a manufacturing process lead.




Before you come to any conclusion from that piece you should really read the comment section and the Author responses to some people, this guy is out to scare people from buying anything AMD now that he sold all his stocks on the company and of course he still has his Nvidia and Intel stocks. There are some valid points in his article though and i wont say everything is wrong but he is actually painting a very doom-like scenario that isn't all that true.
a b à CPUs
November 21, 2012 4:46:33 PM

AMD needs a die shrink to increase power efficiency for their CPUs and GPUs. Nvidia and intel are much better at power efficiency, which may be why OEMs like them. We all know OEMs put awful PSUs in their machines. And AMD also needs to get integrated graphics onto their high end chips. If AMD could get APU graphics onto an FX 8xxx as well as increase power efficiency while keeping the FX 8xxx within striking distance of Intel's similarly priced CPUs performance wise, they have a good chance of getting back into the OEM market as well as getting some enthusiasts back. Haswell promises much better graphics and power efficiency. AMD really needs to do these things to stay in the game. Laying off engineers doesn't help them at all either. And getting some advertising out there certainly wouldn't hurt.
a b à CPUs
November 21, 2012 5:10:40 PM

DarkMantle said:
Before you come to any conclusion from that piece you should really read the comment section and the Author responses to some people, this guy is out to scare people from buying anything AMD now that he sold all his stocks on the company and of course he still has his Nvidia and Intel stocks. There are some valid points in his article though and i wont say everything is wrong but he is actually painting a very doom-like scenario that isn't all that true.


The main points I was making from the article, I underlined for emphasis.

Whether AMD makes a better GPU (which I obviously thought as I bought an HD 7970 for my new rig), is kinda irrelevant if they cannot make money from CPUs and now apparently graphics too. $18M profit is about what the old ATI did back in 2005 just before they got bought out by AMD. If AMD had waited a quarter or two I'm positive they could have bought ATI for half of that $5.4BN they paid.

I agree the rest of the article is some sort of justification for the lousy numbers, and maybe the 'analyst' venting against AMD because he lost money on them, but that $18M graphics profit number is straight from AMD's Q3 earnings report. So that is one reason why AMD appears to be planning another 15% layoff in a couple months..
a b à CPUs
November 21, 2012 5:29:31 PM

montosaurous said:
AMD needs a die shrink to increase power efficiency for their CPUs and GPUs. Nvidia and intel are much better at power efficiency, which may be why OEMs like them. We all know OEMs put awful PSUs in their machines. And AMD also needs to get integrated graphics onto their high end chips. If AMD could get APU graphics onto an FX 8xxx as well as increase power efficiency while keeping the FX 8xxx within striking distance of Intel's similarly priced CPUs performance wise, they have a good chance of getting back into the OEM market as well as getting some enthusiasts back. Haswell promises much better graphics and power efficiency. AMD really needs to do these things to stay in the game. Laying off engineers doesn't help them at all either. And getting some advertising out there certainly wouldn't hurt.


Dunno why AMD would want to stick an iGPU on the top-tier desktop FX CPUs - wouldn't that hurt their discrete GPU business even more? For one thing I'd think the power draw wouldn't fit anywhere near a 125W TDP, for a decent iGPU on an 8-core CPU anyway, even with a die shrink. The resonant clock mesh lowered PD's power draw, but you'd be back right up there with an iGPU drawing a lot of watts under load. Also, unless AMD changes their assymetrical crossfire I think any iGPU would not help a top-end discrete GPU like my HD7970. Not that it can't be done - I run Virtu MVP with my Ivy Bridge HD4K iGPU and it does increase the 7970 FPS by as much as 20 in some games, more like 10 FPS on average.

I agree however that cutting your engineers is just dumb - sorta like slitting your wrists and then bleeding out slowly.

I've wondered what would have happened if AMD had not settled the FTC complaint against Intel for the $1.25BN payoff back in 2009. Sure they needed the cash (used it to pay off some of the senior notes from when they bought ATI), but if they had won Intel might have been split into design and fab companies. Then we might be seeing BD and PD on time and on 22nm by now..
a b à CPUs
November 21, 2012 7:52:58 PM

Intel CPUs are fully APU. Even if the graphics were weak, it would still help them out in the OEM desktop space. It would be a lot cheaper for an FX 8xxx with onboard graphics then getting an FX 8xxx and a weak GPU.
a b à CPUs
a b À AMD
November 21, 2012 7:54:33 PM

most intel systems come with shitty radeon 7450s. Which is still better than the hd4000.
a b à CPUs
a b À AMD
November 21, 2012 8:15:42 PM

The MSI Radeon HD 7870 HAWK is the MSI Lightning's smaller brother. It uses the company's signature Twin Frozr II dual-fan cooler. MSI has also increased the clock speeds of the HD 7870 HAWK to 1100 MHz GPU and 1200 MHz memory.I actually like the 965 BB CPU for mid range gaming.It's great.I did a build few weeks ago for my buddy using that.Hey it's not a beast.I know but my friend cannot afford the best.AMD is very good for people that cannot afford intel.
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