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Duh.. AMD is really getting in trouble

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Anonymous
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October 3, 2002 6:17:32 AM

<A HREF="http://www.marketwatch.com/news/yhoo/story.asp?source=b...{FA2E492B-DFCD-4DC7-9600-24FB68F295E9}" target="_new"> Shares of Advanced Micro Devices plunged more than 20 percent after the chipmaker issued a revenue warning that dealt technology stocks a blow in Wednesday's after-hours session. </A>

Time for a gamble, and buy some AMD stock; though for the first time ever, Im really getting scared we may never see Hammer, and we'll be paying $1200+ for cpu's again next year.


= The views stated herein are my personal views, and not necessarily the views of my wife. =

More about : duh amd trouble

October 3, 2002 6:29:33 AM

Have we hit bottom yet. I picked a great time to quit drinking. Oh well. 20% doesn't seem that much when you've almost become a penny stock.

Complicated proofs are proofs of confusion.
Anonymous
a b à CPUs
October 3, 2002 7:00:26 AM

>Have we hit bottom yet

Who knows ? Its a casino. If investors lose faith in AMD, it could turn into a downwards spiral that ends with AMD closing down. If enough investors think: AMD is worth more than their current stockprice, it may spiral up again one day. Im betting on the second option, and if I'm right, it should earn me enough money for a few nice Hammer systems this time next year. If I'm wrong, we may not be seeing any Hammers ever, so its no too bad I lost that money ;-p

>20% doesn't seem that much when you've almost become a
>penny stock.

Very true.. if you don't own stock ! If you do, 20% is 20% of whatever money you put in there.


= The views stated herein are my personal views, and not necessarily the views of my wife. =
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October 3, 2002 7:07:55 AM

My average purchase price is 15.87 and I can remember when they hit 30, thump thump thump is that my head hitting the wall, so I'm in for the long hull.

Complicated proofs are proofs of confusion.
October 3, 2002 7:31:57 AM

This is a long ass post about my thoughts on AMD and a little reading between the lines.

First off..I love AMD. I have always been impressed with its ability to compete with such a larger competitor. But something a lot more than a cyclical downturn is going on here.

That webcast on Tuesday was supposed to be a positive PR move. But these chips arent even going to be available in volume for two or three months!! And this is supposed to be the good news. Athlon XP 2600 isnt even listed on pricewatch. If these 'paper' launches are the best bone AMD can throw us, it really worries me about what might be going on with barton and hammer.

I dont like how the guy from AMD freaked out on the webcast when he got asked what the clock speeds were. Thats how you act when youre desperate and your back is to the wall. Its a perfectly reasonable question even if clock speed is overrated as a measure of performance.

And then there was the whole 'Its not SOI thats the problem', 'Wait it is SOI thats the problem'. How can you trust them.

Why does no one want to associate themselves with Hammer?? Ok Dell said they are seriously considering Hammer which should be great news..but analysts are saying its just to get bargaining power with Intel. In April, Microsoft said it was gonna make a windows xp for x86-64. But we havent heard anything else since, its almost like people are distancing themselves from AMD because they fear that AMD will not be able to execute with Hammer. I mean after all the horrible things we've heard about Itanium and Itanium2 and all the great things we hear about Hammer, shouldnt we have a lot more Hammer partners by now?? I don't get it.

Look at the stock chart for AMD. Its lost 50% of its value in less than TWO MONTHS!! The damn thing is in free fall. Nortel, Lucent and even Enron had a bounce or two on the way down. Its like the stock market is telling us that AMD is going under far quicker than anyone expected.

How the hell is AMD gonna make money if Intel keeps putting pressure on prices and keeps increasing its performance lead and AMD delays barton and hammer.

Last, this may be a personal thing but I REALLY wish Jerry hadnt left. He was the visionary of this company, he was inspirational when he spoke and now he is gone. Hector did not sound competent on the last conference call, I dont know if he has what it takes to go head to head with Intel.

Again, I hope I'm wrong and just overreacting but things really don't look good now. In my opinion there are two scenarios: 1) AMD is able to deliver hammer with absolutely NO further delays and in volume - AMD survives, 2) AMD delays hammer or encounters further production problems - AMD is gone by this time next year and maybe sooner. I would hate to see this happen. An Intel dominated world benefits no one but Intel.

I've heard people compare 3dfx to AMD. I dont really remember much about 3dfx but supposedly they had some 'hot' product coming out too that was supposed to save them, rampage or whatever. Is this the same road that AMD is headed down? Someone please prove me wrong.

Sorry about the excessively long rant, this has me freaked out.
October 3, 2002 2:32:29 PM

I would be very interested if someone could do a comparison of 3dfx and AMD. While I didn't keep up with the downfall of 3dfx, I have been keeping up with current AMD events. Are there any striking similarities?

-zigzag
October 3, 2002 2:36:55 PM

Ouch, AMD's trading at less than $4 right now.
October 3, 2002 3:27:59 PM

3DFX was getting completely outclassed by nVidia chips. Geforce256 DDR was faster than the unreleased Voodoo 6000 and I think Geforce2 was just the last straw for 3DFX who may also have been overextended financially at the time. Seem to recall they had just purchased STB so that 3DFX could begin manufacturing their own boards.



<b>I have so many cookies I now have a FAT problem!</b>
October 3, 2002 3:34:45 PM

I'd almost forgotten the days when intel ruled the CPU market - please dont let it happen again!!

<font color=purple> "After great thought, things are always bought from the lowest bider"</font color=purple>
October 3, 2002 3:37:47 PM

hmmm, I don't see AMD getting completely outclassed by intel...though, as an earlier comment mentioned, if they cannot deliver on time they may be in trouble...and that may be signs of, as of yet, undisclosed financial problems.

-zigzag
October 3, 2002 3:44:05 PM

the reason why is because of cheap processors and bad marketing. Not to mention VIA!

Once AMD dumps VIA and chooses Nvidia or SiS and improve on their cpu quality you will see AMD once again at the top.

Thats the main reasons why no one is buying AMD products anymore. VIA and/or poor quality of their cpu's. Then you have bad marketing.

They should flat out fire their marketing department if they even have one i should say. Then fire VIA as their chipset supplier. Make engineering work overtime to fix the problem of heat issues. Perhaps patent their own method of thermal throtteling.

Of course the economy is a big problem. However, fixing the above i mentioned would help a lot. Once they fix those issues perhaps one day i'll buy AMD again.

Life is irrelivent and irrational.

<A HREF="http://www.anandtech.com/mysystemrig.html?id=9933" target="_new"> My Rig </A>
Anonymous
a b à CPUs
October 3, 2002 4:04:11 PM

>Once AMD dumps VIA and chooses Nvidia or SiS

You have the choice, don't you ? There are plenty of decent SiS or nForce motherboards out there. Besides, current VIA chipsets are nowhere near as bas as in the KT133 days. Not up to the level of Intel, but I would dare to say decent nevertheless.

>They should flat out fire their marketing department if
>they even have one i should say.

Probably. Though the "XP" name, and the PR rating did bare their fruits. That where some clever PR moves. The problem may not be the department, but rather their budgets. Chicken and egg problem.

>Make engineering work overtime to fix the problem of heat
>issues. Perhaps patent their own method of thermal
>throtteling.

Thats whats Powernow+ is all about. Now just convince the chipsetsuppliers to support this ! Its also what SOI is all about. Now lets hope they get it to work. Its not like AMD is not aware of the problem, nor that they arent working on it.

>Then fire VIA as their chipset supplier.

VIA isnt AMDs chipset provider. It makes chipsets for Intel as well, as do many other companies. Besides, Hammer systems won't rely nearly as much on the chipset, since its all on-die.




= The views stated herein are my personal views, and not necessarily the views of my wife. =
October 3, 2002 6:04:22 PM

In the long run... who knows?

Back in the k6-2/Pentium/Pentium II days AMD CPUs were far behind Intel in performance but during the Athlon (classic) 500 mhz -1000 mhz days AMD more than caught up. I don't see the Athlon XP/Thoroughbred as far behind as the K6-2 was in its day. Maybe AMD can do it again.

I am encouraged by Athlon XP 2800+ performance, at least with preliminary nForce2 mobo's.

Frankly, I don't know how well AMD is doing with other ventures, like flash memory. This might be hurting them too.

[Edited for typos]
<b>I have so many cookies I now have a FAT problem!</b><P ID="edit"><FONT SIZE=-1><EM>Edited by phsstpok on 10/03/02 02:12 PM.</EM></FONT></P>
October 3, 2002 6:11:20 PM

Oh dear spuddy lost money oh dear oh dear. Frikin it wasnt supposed to go that low. God damn people buy some CPU's.

-Jeremy (fairly annoyed right now)

<font color=blue>Just some advice from your friendly neighborhood blue man </font color=blue> :smile:
October 3, 2002 6:48:11 PM

I don't remember when but in past 6-10 month there was a time when AMD actually traded higher then Intel for couple of days and all the AMD fans cheered. I wonder how they feel now.

KG



"Artificial intelligence is no match for natural stupidity." - Sarah Chambers
October 3, 2002 8:27:49 PM

Quote:
Last, this may be a personal thing but I REALLY wish Jerry hadnt left. He was the visionary of this company, he was inspirational when he spoke and now he is gone. Hector did not sound competent on the last conference call, I dont know if he has what it takes to go head to head with Intel.

I never looked at it this way, but I am starting to believe, that perhaps you are right. Jerry, despite his blind conviction of bringing Intel down and often lack of knowledge in speeches, had the shark attitude, and pushed his company. Does anybody think such would NOT have happened if he was still here?
I miss Jerry now!

--
What made you choose your THG Community username/nickname? <A HREF="http://forumz.tomshardware.com/community/modules.php?na..." target="_new">Tell here!</A>
a b à CPUs
October 3, 2002 8:35:56 PM

I've seen profitable companies shut down by their investors/creditors because their stock prices dropped too low.

<font color=blue>You're posting in a forum with class. It may be third class, but it's still class!</font color=blue>
October 3, 2002 8:47:14 PM

AMD is currently losing around $3m a day. That's $90m a month, or $270m a quarter (or $1.1b a year). AMD will be in serious trouble by the new year unless they (#1) Start producing competitive chips at reasonable yeilds, and (#2) create a demand for the above chips so that they not only sell in quantity, BUT FOR A REASONABLE (to AMD) PRICE. Although I love the idea of paying $150 for an XP2600, that isn't helping AMD any. AMD needs to be able to ask $400 to $500 for their high end processors while still managing sell in volume (as intel does for the P4 2.6 & 2.8 chips).

And intel isn't sleeping either. The new C1 stepping will start at 1.8Ghz, which will reportedly will work it's way down below $60 ($40 according to some sites). <$60 for a chip that will easily o/c to 2.7Ghz? And do 3Ghz without too much effort? Sign me up for two, please.

For those who really want to help out AMD, put your money where your mouth is and start buying MP 2200 chips ($220) instead of XP 2200s ($150).

- JW
October 3, 2002 10:14:31 PM

Quote:
Last, this may be a personal thing but I REALLY wish Jerry hadnt left. He was the visionary of this company, he was inspirational when he spoke and now he is gone. Hector did not sound competent on the last conference call, I dont know if he has what it takes to go head to head with Intel.

Or did he left because he knew what is AMD heading towards. He just wanted to leave before he would be proven wrong about "Real Man Owns FABs" etc.

Actually Jerry, hasn't left AMD at all. He is still working for AMD. He just doesn't come out in public like before. So even with Jerry AMD is screwing up.

KG

"Artificial intelligence is no match for natural stupidity." - Sarah Chambers
October 3, 2002 11:58:54 PM

Although the stock price is low, it's worth noting the percents that we're talking about.

AMD $3.63, 82.37% below 52 week high
INTC $13.84, 62.37% below 52 week high

Granted, AMD doesn't have the capital that Intel does, but nonetheless, both stocks are getting killed. Look at csco, down below $10. A lot of stocks are at least 50% below their 52 week high. They aren't shutting anyone down. The WHOLE market is a big mess. I'm just going to write my losses off my my taxes for the next couple years.

The real problem, beyond AMD doing paper releases, is the investors that are putting their money in the market. They aren't investors, they're gamblers with no idea of what they're doing. When investing in a company in the short term, as so many did, everyone loses. Unfortionately, at the time, most of us didn't think so. The only people who make money are those in it for the long term. Unfortionately, a bunch of gamblers stick their money in all kinds of stocks, good or bad, and then sell them when they aren't making 50% on their money. Besides that how is any stock supposed to rise in value when everyone is still suffering from those losses? I haven't invested a dollar since the market took it's first nose dive. I can't.

All in all, the market just needs time to recover. People need to have money to spend, and all those people who were just logging onto Etrade and gambling need to get a grip on themselves. Then stock prices will rise again.

If you aren't investing for the long term gain of AMD's, or any company for that matter, future then you're doing it all wrong. I think the stock market is still trying to filter all the short term investors out.

I at least knew I was gambling, so the loss doesn't bother me that much. I invested in the most aggressive stocks possible and was willing to take the chance. It still sucks, but I'm young and will move on.

My two cents.

<font color=red>I'd like to dedicate this post to all my friends, family, and fans. Without them this post would never have been possible. Thank you!</font color=red>
October 4, 2002 12:55:07 AM

3.63 now

Now what to do??
October 4, 2002 11:43:00 AM

Wait for the price to stabilize or go up for 2 days in a row, then load up on it, of course.

My DCA on AMD is right around $8, excluding the sales around $30. Taking that into account, I am still nearly even with AMD, compared with my 50%+ loss in Intel. So, it sorta depends on luck and planning. Right now I've done much better in AMD stock than in Intel stock. Others may have different results.

Mark-

<font color=blue>When all else fails, throw your computer out the window!!!</font color=blue>
October 4, 2002 3:06:39 PM

maybe amd has something going for them by raising prices closer to intel, it reminds me of what some linux off shoot did, they started charging for the software just to get it out there for some recognition, the idea is good. big buisness bosses tend to think of cheaper products as lower quality so when they are offered somthing for free they are more likely to turn it down. they think to themselves, free huh, whats wrong with it? something good cant be free, or cheap.

how do you shoot the devil in the back? what happens if you miss? -verbal
October 6, 2002 6:50:26 PM

Well, well, AMD's really gotten themselves in a pickle this time. I forsaw ( a few months ago) that this would happen to AMD. I bet all of you AMD chiptroopers just love the low prices of Athlons. I mean, why else do you buy Athlons? AMD has made a BIG mistake in selling Athlons at such low prices. The consequence is that AMD isn't making any profits, even if they sell a ton of Athlons. For example, on pricewatch, an XP1600+ is $52. Do you seriously think AMD actually makes a profit on that CPU at that price? I sure don't. According to many analysts and web sites, in terms of raw manufacturing costs, to make an Athlon or P4, it costs about $23 US. Now, this is purely the manufacturing cost. Add in the price of an HSF, say another $10. Now, that's $33. Add in the packaging, say another $5. That $38. This is of course, a rough estimate. I'm taking into account the lowest possible prices for these. Now, lets not forget each CPU has to be tested, and that costs money. For example, lets say it for AMD, about $10 is onto the price of every CPU for testing. That brings us to $48 for a CPU that's ready to be shipped. If you include the shipping charges, then each CPU is about $60. Now, you still need a higher price in order to make a profit. So, if AMD sells it XP1600+ at $52, I don't see there's any way in which they're actually making a profit. Intel on the other hand, makes a nice profit, and I believe right now it actually costs Intel <b>less</b> to manufacture each CPU, compared to AMD, since Intel is now on 300mm wafers. AMD has to change their business plan, and also change it's prices, or they are going to collapse.

Now, lets get on to other stupid mistakes AMD has made which resulted in this mess. In August, they paper launched the XP2400+, and XP2600+, and so far I have yet to see them in any stores. Also, AMD started its $28 Million "AMD Me" AD campaign, which so far, I have only seen on techie sites, like THG. So, in other words, AMD threw $28M out the window by targetting the same fanboys with ADs, that already know about AMD. To add insult to injury, AMD has recently paper launched the XP2700+ and XP2800+. They 2400, and 2600's aren't even available yet, and still, AMD paper launches the 2700, and 2800. To make things worse, the XP2800+, combined with an nForce2 and DDR 333 memory, STILL cannot take the performance crown, even though it now has a 333mhz FSB. So, the 2800 which isn't supposed to come out for another 3 months, cannot outperform the 2.8P4 (even with the amazing performance of the nForce 2), which has been out for over a month. AMD has now done 2 paper launches back to back, and wasted money on that add campaign. In it's 30 year history, Intel has never done anything as stupid and humiliating as this. AMD' stock price is rock bottom.

With all this in mind, there are still a few rabid fanobys out there that have the nerve to say Intel is in a similar position. HELLO! AMD has downgraded revenue to $500 million, and they are expected to have an operating loss this quarter. On top of that, AMD only has about 1 billion US in cash left, which wil only last AMD for another few months. AMD's stock is at like 3.63, while Intel's is at about 13.84. Intel, last quarter, had a revenue of <b>25 billion US</b> which is enormous comapred to AMD's revenue. Intel can survive this kind of recession, AMD cannot. Simple as that. Also, if my estimate is correct, then AMD will paper launch the clawhammer right before christmas, desperately trying to get support and pre-orders for the clawhammer. That would really make alot of people angry. People would be sick and tired of paper launches, and if AMD actually did that, it's stock would probably plummet below $1. Intel is only going to make thing harder for AMD. In Q1 of next year, Intel has a whole whack of new CPU's being released. Not to mention the fact that they could do an early release of Prescott, since all of Intel's roadmaps and releases seem to be accelerating. The clawhammer won't be out in volume until Q2 of next year, according to AMD. Personally, I'm doubtful of whether AMD can last that long.

In short, if AMD does one more stupid move, they're done for.

- - -
<font color=green>All good things must come to an end … so they can be replaced by better things! :wink: </font color=green>
October 6, 2002 7:51:17 PM

I agree with many of your points, but:

First Intel's revenues are ~25B not in a quarter, but in a year. That's down a bit from near 35B a couple years ago.

If AMD gets hit with some SEC investigation of something, I'd be likely to think that it's the end for them.

...And all the King's horses and all the King's men couldn't put my computer back together again...
October 6, 2002 7:56:56 PM

I know, but I meant that as of last quarter, the latest updated revenue was $25 billion. I know it's per year. The revenue was at it's peak in 2000, when it was at $34 billion.

As I said, AMD is hanging on by a thread. SO, if anything bad were to happen to AMD, it would probably be the end for them.

- - -
<font color=green>All good things must come to an end … so they can be replaced by better things! :wink: </font color=green>
October 6, 2002 8:29:51 PM

Yup totally agree.

...And all the King's horses and all the King's men couldn't put my computer back together again...
October 6, 2002 8:32:48 PM

That's a very dark view of things. As far as I'm concerned all they need to do is get chips to the market and they'll be ok. That's the biggest problem they have right now. They don't have to have the fastest chip out on the market to do ok. I also wonder if the 1600+ for example is so cheap since vendors have too much stock and are trying to get rid of them.

<font color=red>I'd like to dedicate this post to all my friends, family, and fans. Without them this post would never have been possible. Thank you!</font color=red><P ID="edit"><FONT SIZE=-1><EM>Edited by dhlucke on 10/06/02 01:37 PM.</EM></FONT></P>
October 6, 2002 9:58:41 PM

It's not that easy as simply getting the chips out on the market. AMD's often had delays, and/or problems getting chips out on time. AMD has been selling CPU's at cheap prices for over a decade now. This business plan though isn't getting them anywhere. AMD must change, or collapse. I don't care if it seems like a very dark view of things, because it's the truth.

Maybe I should put up my old sig... which is "the truth is that people can't handle the truth"

Many of my points are based on fact, and Chuck232 seems to agree. If you can't accept my view, fine.

- - -
<font color=green>All good things must come to an end … so they can be replaced by better things! :wink: </font color=green>
October 6, 2002 10:33:10 PM

Quote:
To make things worse, the XP2800+, combined with an nForce2 and DDR 333 memory, STILL cannot take the performance crown, even though it now has a 333mhz FSB. So, the 2800 which isn't supposed to come out for another 3 months, cannot outperform the 2.8P4 (even with the amazing performance of the nForce 2), which has been out for over a month

While your dark view is indeed right, I'd like to debate THAT statement above, which sounded quite blind to me.
You're wrong in assuming it has not taken the performance crown. In my eyes, the XP2800 has the performance crown. Lest this be fanboyism, I see the XP2800 as the clearer winner. I simply see it that way. I would not say the signicant performance crown, more like a margin better than the P4 2.8B, but not significant, nor at the margin of error. This is PERFORMANCE-WISE and not the chip itself, its availability and such, simply discussing from a pure performance POV, I see AMD as retaking the crown, by a slight lead. In some tests it seemed to truly shine, no SSE2 included especially. If THG ruled out Q3, it'd definitly win more, since Q3's day-to-day use is NOT a factor to be included if you want to test day-to-day usage. In 3d Apps, it wins quite fairly, in MP3, well the first test which it usually does. Had SSE2 been included, it would definitly rape the 2.8GHZ. Bandwidth-wise, only Clawhammer can possibly counter the P4 in bandwidth intensive apps like the second MP3 test and XMPEG 4, since its extremely lower latency from the on-die mem, and the DDR333 interface, (or heck, why not use Opteron's Dual Channel) could definitly compete and outperform PC1066, simply due to latency. Of course who is to say that AMD has not decided to perhaps shift to DDR400 in Hammer? They did want to make revisions, other than SOI, I'd be hard pressed not to see them attempting higher bandwidth solutions, next to more core improvements.
So in conclusion, you are wrong in stating it has not taken the performance crown, but I also would be wrong and hypocritical to say it is the CLEAR winner, more like the slight lead which is enough to sell, had it come out now, competing the 2.8GHZ's price, and performance for stock use.

--
What made you choose your THG Community username/nickname? <A HREF="http://forumz.tomshardware.com/community/modules.php?na..." target="_new">Tell here!</A><P ID="edit"><FONT SIZE=-1><EM>Edited by Eden on 10/06/02 06:34 PM.</EM></FONT></P>
October 6, 2002 11:50:37 PM

I've gotta say, the XP2600+ isn't even shipping, the XP2800+ retail price is supposed to be $497USD, which is barely less than the P4 2.8B's price <b>now</b>. And who knows when XP2800+ will ship.

I've usually agreed with many of your opinions/comments, but I really can't agree with you on this one.

The 2.8B and the XP2800+ share the lead. The XP2800+ being better in very CPU intensive apps. SSE2 is legit since it's an ability of the P4 just like the CPU strength of AthlonXPs. And too bad for the AXP that it doesn't have SSE2. So that should factor in.

Anyways, it's unfair for AMD to say they've released these chips, while they won't be out for several quarters. It's like Intel sending out chips to reviewers at 3.2GHz and saying they've launched them now. So even if you think the XP2800+ has the performance crown (which I disagree) it means diddly if no one can get one. By the time the XP2800+ is actually selling, we'll probably have 3.2GHz P4s with HT.

I would also like to add. When Hammer comes out, I'm sure we'll see Prescott soon after with DC DDR333, which could compete vs. the on-die mem controller of the Hammer, albeit not as well, but sufficient. Intel's tech isn't gonna stop while AMD's continues.

So in conlcusion, I'd say the 2 CPUs are neck and neck, if the XP2800+ were available now. Since it's not, then too bad and the P4 has the advantage. Who knows what Intel'll have when XP2800+ does actually ship.

...And all the King's horses and all the King's men couldn't put my computer back together again...
October 7, 2002 1:08:25 AM

It's not so much that I'm disagreeing with you at all. I'm just looking at the cup as half full.

It's a wait and see type situation. I think we both want AMD to suceed so that chip prices don't sky rocket.

<font color=red>I'd like to dedicate this post to all my friends, family, and fans. Without them this post would never have been possible. Thank you!</font color=red>
October 7, 2002 1:13:00 AM

Intel doesnt want AMD to fail either! :wink:
Otherwise they might be accused of being a monopoly.
Not to mention what would happen to component prices.

<b> :cool: I :smile: think :frown: I'm :redface: addicted :wink: to :eek:  these :mad:  ever :eek:  so :tongue: cute :cool: smiley :lol:  faces! :wink: </b>
October 7, 2002 5:19:45 AM

AMD is definitely in trouble now. Will they go out of business... NO they won't! Worse case scenario for them is to be acquired by a larger tech company a la Cyrix. Anyone remember Cyrix? Bought by National Semiconductor and then sold off to VIA. I see the same thing happening to AMD.

Here is some food for thought. Chip fabs get more expensive with every generation of chip technology. Currently around 2 Billion dollars per fab. So expensive, in fact that AMD had to partner with UMC to have the ability to keep pace with production. This has to result in AMD's cost going up a bit just to cover UMC's cut. If AMD would only realize that they should not have been giving their chips away to the "fanboys" at prices 25% cheaper than a comparable yet inferior Intel chip, they might have a considerably stronger balance sheet these days. Who knows, they could have even dumped the extra money into marketing to broaden their customer base.

Bottom line: AMD's business plan was flawed, and now they are paying the price. They should have been charging at the least, a 5% discount to Intel. The "fanboys" would have happily paid that for the then superior Athlon. As far as AMD's marketing department, Can anyone recall ever seeing an AMD commercial on TV?

Not a fanboy.... I hate everyone equally.
October 7, 2002 5:48:12 AM

Watch AMD's stock price... If it continues falling after the warning they just put out, then the stock is telling us what people with inside information know. That things are gonna get worse. As of Friday's close, AMD had a market cap of $1.2 billion. If it falls much lower, say $1 - $2 from the current $3.51, look for someone to acquire it. at $2 per share it could be had for around $680 Million. Consolidation like this is necessary to eliminate the weaker players in a severe downturn like the one in which we currently reside. AMD with a parent company.... May not be such a bad thing.

Not a fanboy.... I hate everyone equally.
October 7, 2002 5:58:45 AM

Just imagine......a world where AMD is actualyl owned and operated by Intel......YUCK....No mroe freedom of choice in price etc.....hmmm.....i think AMD Should buy nVidia and let there Marketing department take over.....

<A HREF="http://www.anandtech.com/mysystemrig.html?id=13597" target="_new">-MeTaL RoCkEr</A>
Anonymous
a b à CPUs
October 7, 2002 6:59:33 AM

Maybe you should start your own semiconductor company, it seems you have it all figured out, no ?

>I bet all of you AMD chiptroopers just love the low
>prices of Athlons. I mean, why else do you buy Athlons?

Cause they perform well, are stable, and costs are low. WHy else buy a cpu ?

>has made a BIG mistake in selling Athlons at such low
>prices.

This is where you're wrong. Yes, they are cheap, but simply because AMD *has* to price them this low in order to sell any quantities. You really think its as easy as saying: well, we'll just charge 20% more for our cpu's, and be we'll be fine ?

>According to many analysts and web sites, in terms of raw
>manufacturing costs, to make an Athlon or P4, it costs
>about $23 US

I'd be surprised if a P4 and an Athlon would cost about the same, given the difference in die size... but lets say $23

>Add in the price of an HSF, say another $10.

You're joking. You can buy HSF in a shop for $10. That means AMD can buy them for $3 MAX. They must be buying hundres of thousands, thats just not comparable to end user prices.

>Add in the packaging, say another $5.

What do you mean by "packaging" ? The plastic box ?
$1-$2 MAX, and thats just for those very few that ever get packaged. most go to OEMS in trays. You can buy plastic packaged toys for less than $5, and that price includes shipping, the toy itself, profits for the manufacturer, for the shop and taxes.

>For example, lets say it for AMD, about $10 is onto the
>price of every CPU for testing

The testing and binsplitting is surely taken into account in the raw manufacturing cost, as this is part of the process. Even if it werent, its nowhere near $10/cpu. ANY chip has to be validated, not just cpu's. Many chips (not cpu's) sell for far less than $10 in quantities, so testing couldnt be that expensive. Lets say $5, Im being generous.. cause testing complex cpu is likely more expensive than some simple IC.

>48 for a CPU that's ready to be shipped. If you include
>he shipping charges, then each CPU is about $60.

I'm at $33. Shipping is not likely to cost $12 a cpu either, now is it ? They are not sending them one by one you know. If you ship a box of 1.000 cpu's, its not likely to cost more than $100, even overseas and insured. Thats $0.1 per cpu.

>So, if AMD sells it XP1600+ at $52, I don't see there's
>any way in which they're actually making a profit.

AMD isnt even allowed to sell them below manufacturing cost AFAIK. They have a margin, although small. But there is something you overlook that is far more important. You're looking at end user prices vs manufacturing cost. Thats not the real issue, its OEM prices versus R&D and writing off investments. There is the key to profitability. Even AMD sells maybe 80% of its cpu's to OEMs. They just cant charge what they like, they have to sell, even if the margins are bottom low. Increasing your prices by as little as 15% may result in 50% less sales. You do the math.

Talking about OEMs, there is a second thing I'd like to say here; OEMs don't care too much about AMD vs Intel. They get competitive prices from intel as well, rest assured. I don't think they will pay more than a 10% premium for Intel over AMD. The thing is, in the current depressed market, manufactureres are looking to cut costs. HAving less product lines to develop/support/market means cost savings. So many OEMs will hapily pay a small price premium and just have to deal with one supplier. Prererably on big one that is not likely to have delivery problems, one that has a product range from top till bottom, and one that is known to sell. So many will just stick to Intel, regardless if AMD performs better per dollar.

>Now, lets get on to other stupid mistakes AMD has made
>which resulted in this messIn August, they paper launched
>the XP2400+, and XP2600+, and so far I have yet to see
>them in any stores.

They have been shipping to OEMs for quite some time now. Though I agree it is still a paper launch, I dont see this harming their financial results.

>To make things worse, the XP2800+, combined with an
>nForce2 and DDR 333 memory, STILL cannot take the
>performance crown,

Im not sure it didnt take the (virtual) performance crown, but thats besides the point. The money is not in the high end chips, they only represent a fraction of revenue for both intel and AMD. The real money is in the +-2 Ghz/PR chips that sell in volume. These high end chips represent no more than 5% of total sales. Its only geeks like us that buy these highest end machines. Go to a store near you, and ask what kind of CPU they most frequently sell ? I bet its a XP1800 and P4 2 Ghz or there abouts. Performance crowns are only interesting for the geek community, and for "image".

>AMD has now done 2 paper launches back to back, and
>wasted money on that add campaign. In it's 30 year
>history, Intel has never done anything as stupid and
>humiliating as this.

Short term memory hu ? Forgotten about the 1 Ghz P3 paper launch, the 1.13 fiasco, the i820 disaster, etc, etc..

>With all this in mind, there are still a few rabid
>fanobys out there that have the nerve to say Intel is in
>a similar position. HELLO!

"This" has nothing to do with it, but Intel is in a similar position (while not as bad) when it comes to stock price. But I don't think anyone is worried about Intel surviving this resession however. I am worrying about AMD though.

>People would be sick and tired of paper launches, and if
>AMD actually did that, it's stock would probably plummet
>below $1.

Once more, AMDs (or intels) main customers and shareholders ARENT the tech obsessed geeks like us.

>In short, if AMD does one more stupid move, they're done
>for.

Well, at least one thing we can agree upon. Though I havent seen AMD do many stupid moves so far. They've had a few set backs, yes, but its the market thats killing them, not so much their [-peep-] ups.

= The views stated herein are my personal views, and not necessarily the views of my wife. =
October 7, 2002 6:13:41 PM

Quote:
You're wrong in assuming it has not taken the performance crown. In my eyes, the XP2800 has the performance crown.


To wear a crown don't you think their presence is needed.

<b>Just couldn't resist.</b>

KG

"Artificial intelligence is no match for natural stupidity." - Sarah Chambers
October 7, 2002 7:04:57 PM

Hey it's funny that AMD has a 15% or so profit margin. That's pretty bad. You also do realize that a place like newegg has to make money on the stuff they sell. Say 15%, that'll add some money on your price.

So although both companies have made bad choices (Intel and AMD), Intel had/has a much better chance of surviving.

...And all the King's horses and all the King's men couldn't put my computer back together again...
October 7, 2002 8:16:23 PM

As I stated below that, it is only discussing from a PERFORMANCE-WISE and CONTEXT SENSITIVE view. This context, is about testing the performance evaluation. It is almost the SAME thing as testing the 3.6GHZ and saying it has the performance crown, albeit that being a simulation, the XP2800 being a real determined to be released product. But the idea is of testing or performing a benchmark in an article that wants to see the outcome of a chip coming AGAINST the 2.8GHZ P4, should the gods of PR vs MHZ still account. Yes if we were to test the highest end of each, then the 3.06GHZ would be included and then AMD is not a winner anymore, however 2.8GHZ vs XP2800, in my book is that the AMD wins by a slight and very small lead, and seeing as there are so many obsessed 3d Mark people, the AMD would've been to them the seller/winner as well.

Look, it is indeed a matter of the view of things, and I can easily concede that AMD can no longer be the absolute competitive product. Notice how nearly half the tests now use SSE2. If 70% use it, by then, do you honestly imagine AMD possibly making a comeback? I concede it cannot anymore, at least not until SSE 2 is used on AMDs. So I can theorize that Clawhammer+SSE2, matched with its already superior FPU, could easily outperform P4s in SSE2-optimized tests.
Until then, AMD is in no position to reclaim the absolute performance crown, never shall be. (look at Lightwave 7B and Sysmark 2002)

--
What made you choose your THG Community username/nickname? <A HREF="http://forumz.tomshardware.com/community/modules.php?na..." target="_new">Tell here!</A><P ID="edit"><FONT SIZE=-1><EM>Edited by Eden on 10/07/02 04:59 PM.</EM></FONT></P>
October 7, 2002 8:55:23 PM

Quote:
Cause they perform well, are stable, and costs are low. WHy else buy a cpu ?

Because you're thinking about future (though now present) software compatability and want SSE2. Because you want assured data survivability in a warm climate. Because you want good overclockability to optimize your price/performance ratio. Because you work with bandwidth-intensive apps. Because you want absolute maximum performance.

Just mentioning reasons that you didn't list for buying a CPU. ;) 

Quote:
This is where you're wrong. Yes, they are cheap, but simply because AMD *has* to price them this low in order to sell any quantities. You really think its as easy as saying: well, we'll just charge 20% more for our cpu's, and be we'll be fine ?

At present your point is very true. In the past however, AMD had the perfect opportunity to do just that and raise their prices while they held a clear and definite performance crown. AMD didn't take that opportunity. Their production and R&D both started to suffer not long after that. Had they raised their prices when they could have, they would have had the money to make a new FAB, upgrade old FABs, and fix production and R&D problems that <i>still</i> plague them. Instead, they missed that opportunity and are now just barely scraping by.

No, they couldn't raise prices <i>now</i>. However, had they done so in the <i>past</i>, they wouldn't be nearly as down as they are now. <i>That</i> was a big mistake.

Quote:
I'm at $33. Shipping is not likely to cost $12 a cpu either, now is it ? They are not sending them one by one you know. If you ship a box of 1.000 cpu's, its not likely to cost more than $100, even overseas and insured. Thats $0.1 per cpu.

I'm with you on the CPU production and shipping costs. Your estimate sounds much more logical. However, there is also the overhead of employment. I wonder how much that kind of overheard eats into their profits.

Quote:
You're looking at end user prices vs manufacturing cost. Thats not the real issue, its OEM prices versus R&D and writing off investments. There is the key to profitability. Even AMD sells maybe 80% of its cpu's to OEMs. They just cant charge what they like, they have to sell, even if the margins are bottom low. Increasing your prices by as little as 15% may result in 50% less sales. You do the math.

There's only one massive flaw here. AMD's OEM sales are mostly comprised of extreme enthusiast companies. (Like Alienware.) These OEMs are primarily going to buy AMD CPUs no matter what. So if AMD raised their prices by 10%-15%, they might lose at most 7% of their OEM sales, and very probably not even that much. You do the math. :) 

Quote:
Talking about OEMs, there is a second thing I'd like to say here; OEMs don't care too much about AMD vs Intel. They get competitive prices from intel as well, rest assured. I don't think they will pay more than a 10% premium for Intel over AMD. The thing is, in the current depressed market, manufactureres are looking to cut costs. HAving less product lines to develop/support/market means cost savings. So many OEMs will hapily pay a small price premium and just have to deal with one supplier. Prererably on big one that is not likely to have delivery problems, one that has a product range from top till bottom, and one that is known to sell. So many will just stick to Intel, regardless if AMD performs better per dollar.

Exactly. I couldn't have said it better myself. Most OEMs deal with Intel for that reason, and for brand name recognition. Those OEMs that do deal with AMD don't really care about either. Therefore there isn't too much that AMD could do that would lose those OEMs, as AMD's OEMs are already far out of the market norm in behavior. AMD could raise prices a bit and not lose a single OEM sale.

Quote:
. Though I agree it is still a paper launch, I dont see this harming their financial results.

Are you kidding? 75% of the stock trade game is rumor and inuendo. The stock market is not driven by intelligent people who know the products and companies who's stock they trade inside and out. The stock market is driven by money-hungry people usually looking to make a really quick buck on the latest rumor. AMD's paper launches are giving them a bad name, and that bad name is translating to a stock price drop far worse than the real affect ever could have been.

Quote:
The money is not in the high end chips, they only represent a fraction of revenue for both intel and AMD. The real money is in the +-2 Ghz/PR chips that sell in volume. These high end chips represent no more than 5% of total sales.

But again, the stock market is driven by rumor and hope. The fact that AMD has been unable to deliver a competetive product and is offering only thinly-veiled hopes has turned many investors sour on the prospects of AMD's future viability. By AMD aiming at the midrange market, they have both saved themselves and killed themselves. As a company delivering a product, it helps them stabilize a lot. As a company traded on the stock market, it has hurt them badly.

Quote:
Short term memory hu ? Forgotten about the 1 Ghz P3 paper launch, the 1.13 fiasco, the i820 disaster, etc, etc..

Yes, but the 1.13 fiasco was covered by a rapid recall and replacement. The i820 disaster wasn't even Intel's fault. It was a really stupid product technologically, but it worked. It was just the motherboard manus that couldn't adhere to a very tight spec, which resulted in many faulty products ... which again were recalled and replaced. Plus Intel had a name for itself to fall back on. Further, they weren't simultanious, they were in succession.

AMD doesn't have a name to fall back on, is doing these all simultaniously, and has nothing to offer as a suitable alternative. It's one heck of a bad move for them to have made. I can understand the paper launches <i>had</i> they been followed by actual products in a week or two. Stock investors would have been pleased by the show. Yet actual release has been very slow in coming and that pleasure has already turned rather sour.

Quote:
Well, at least one thing we can agree upon. Though I havent seen AMD do many stupid moves so far. They've had a few set backs, yes, but its the market thats killing them, not so much their [-peep-] ups.

I partially agree. However, it has been their screw ups and bad decisions which has caused the stock market to sour on them, which in turn is what is killing them. What AMD needs to do to survive is stop being so stupid by trying to play up to the stock market and start running themselves as an intelligent company, because it has been mostly their failed attempts to play up to the stock market which has screwed them up.

<pre><A HREF="http://www.nuklearpower.com/comic/186.htm" target="_new"><font color=red>It's all relative...</font color=red></A></pre><p>
October 9, 2002 12:13:43 PM

Time wil tell i guess >>> and its running out fast :frown:

<font color=purple> "After great thought, things are always bought from the lowest bider"</font color=purple>
October 9, 2002 12:47:54 PM

I wish good luck to all of amd fan.I will laugh so hard if someone like HPQ come and buy 33% of the stock.

Now what to do??
October 9, 2002 1:14:09 PM

Quote:
AMD's OEM sales are mostly comprised of extreme enthusiast companies. (Like Alienware.) These OEMs are primarily going to buy AMD CPUs no matter what. So if AMD raised their prices by 10%-15%, they might lose at most 7% of their OEM sales, and very probably not even that much. You do the math. :) 


Uhm... Slvr...

AMD is a major CPU supplier for HP, E-Machines and Sony's PC division.

In fact, E-Machines has gone from a totally Intel shop to a majority of models running AMD CPUs, gradually over the last year. Out of 5 models they now make, 3 are Athlon models.

While HP/Compaq and Sony have more Intel models, their Athlon models are consistently some of their best sellers. So, to suggest that AMD only has OEMs like Alienware and smaller, specialty shops like them, is misled. Furthermore, an increase in prices of, say, 10% as discussed, COULD indeed seriously adversely afect AMD's total CPUs sold, since the bulk of them are indeed sold through the three major OEMs I mentioned (at least here in North America)

Mark-

<font color=blue>When all else fails, throw your computer out the window!!!</font color=blue>
Anonymous
a b à CPUs
October 9, 2002 1:18:13 PM

>I wish good luck to all of amd fan.I will laugh so hard if
>someone like HPQ come and buy 33% of the stock.

HPQ is not likely to be buying anything, certainly not AMD, but if they would buy 1/3 of AMDs stock, man that would make my day :-)) That would be AWFULL news for AMD, since it almost guarantees much better sales in all markets HPQ is active in. Btw, I already made 10% on my AMD stocks today.. Go AMD, GO GO !!
;) 


= The views stated herein are my personal views, and not necessarily the views of my wife. =
October 9, 2002 1:58:09 PM

no for 1 billion they will secure the way for IA-64 for the next two decade.After that restruture the compagnie only kepping the flash sector sold fab to anyone.Keep the engineur built some thing and also a good thing to keep intel working.The only hick it FTC wont allow it.

Now what to do??
June 12, 2006 10:41:40 PM

Ahh found this old thread. Just want everone that is calling for AMD's demise to look at all the dire views of AMD back in 2002. Look what they went on to accomplish over the next 3 years. Don't count AMD out just yet.
June 12, 2006 11:17:34 PM

Quote:
Oh dear spuddy lost money oh dear oh dear. Frikin it wasnt supposed to go that low. God damn people buy some CPU's.

-Jeremy (fairly annoyed right now)

Just some advice from your friendly neighborhood blue man </font color=blue> :smile:


Too bad you didnt buy mroe when it went that low. Look where they are today :lol: 
June 12, 2006 11:23:40 PM

hehe, grats on the old thread.

It's rather amazing to see the high quality of this thread, especially when you compare it to the current level of "l33tness", flaming and general ranting we have the chance to experience now on Tom's forums...
June 12, 2006 11:26:19 PM

Quote:
Oh dear spuddy lost money oh dear oh dear. Frikin it wasnt supposed to go that low. God damn people buy some CPU's.

-Jeremy (fairly annoyed right now)

Just some advice from your friendly neighborhood blue man </font color=blue> :smile:


Too bad you didnt buy mroe when it went that low. Look where they are today :lol: 

Gar I lost like 1600.00 or so don't remind me.
!