Positive Black Friday Sales Give AMD New Hope

During a conference in Scottsdale, Arizona on Tuesday, AMD Chief Executive Rory Read told investors that the company has seen some positive news stemming from Black Friday sales over the last few days. Currently it's too early to call the 2012 holiday season a big success, but AMD's performance through the Thanksgiving holidays "looked reasonably well".

The news is undoubtedly a glimmer of hope for a company that just announced a restructuring plan that includes a 15-percent reduction of its global workforce in the fourth quarter of 2012. As a result of the restructuring, operational savings – primarily in operating expenses – will be approximately $20 million in the fourth quarter of 2012 and approximately $190 million in 2013.

"Our restructuring efforts are decisive actions that position AMD to compete more effectively and improve our financial results," Read said in October. "Reducing our workforce is a difficult, but necessary, step to take advantage of the eventual market recovery and capitalize on growth opportunities for our products outside of the traditional PC market."

Later in November, AMD reportedly hired on J.P. Morgan Chase & Co., a leading global financial services firm with assets of $2 trillion and operations in more than 60 countries, to explore its options. There was talk of a potential sale, or a liquidation of its portfolio of patents at the very least. But AMD fired back at the rumors, reporting that it's not actively pursuing any kind of sale at this time.

"AMD’s board and management believe that the strategy the company is currently pursuing to drive long-term growth by leveraging AMD’s highly-differentiated technology assets is the right approach to enhance shareholder value," the company said in an official release.

Read said on Tuesday that despite encouraging PC sales over the Thanksgiving weekend, the industry itself is still facing long-term problems as consumers flock to tablets as their primary computing device. Global shipments are expected to decline slightly this year, the first annual drop since 2001, thanks to a struggling economy in the United States and Europe, and slowed economic growth in China.

Because of this, Read said that he does not expect the PC market – which is reportedly around 85-percent of AMD's business – to recover from the slump for several more quarters. What may fuel the eventual recovery is Windows 8 and the various new form factors that try to trump Apple's own iPad.

AMD's sales numbers may have also increased over the Black Friday week due to its involvement with the just-launched Wii U console. The company, which previously provided GPUs for the original Wii and GameCube consoles, currently supplies its DirectX 11-capable Radeon HD GPU for the new Wii U. Nintendo said it has already sold over 400,000 units in North America alone since its debut last week. In contrast, the original Wii saw 600,000 units sold in the first eight days.

 

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27 comments
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    Top Comments
  • If AMD fails, we all loose.
    27
  • It will also be providing GPU's for the next generation Xbox and PS4, good news for AMD :)
    25
  • We only have a few more months until the release of AMD's sea islands 8000 series GPUs, no? I hope that adds to their recovery.
    21
  • Other Comments
  • It will also be providing GPU's for the next generation Xbox and PS4, good news for AMD :)
    25
  • If AMD fails, we all loose.
    27
  • Consumers flock to tablets... Average consumer doesn't know jackshit anyways.
    20