While Intel managed to generate a record amount of revenue in Q3 2014, it appears that things over at AMD aren't going as well. Over the past quarter, the company generated a total of $1.43 billion in revenue, which might sound like a lot, but the relevant number is net income, which was $17 million, or two cents per share. This is up from the previous quarter, when AMD suffered a net loss of $36 million, but still notably less than the $48 million net income that the company generated over Q3 last year.
"AMD's third quarter financial performance reflects progress in diversifying our business," said Dr. Lisa Su, AMD president and CEO. "Our Enterprise, Embedded and Semi-Custom segment results were strong; however, performance in our Computing and Graphics segment was mixed based on challenging market conditions that require us to take further steps to evolve and strengthen the financial performance of this business. Our top priority is to deliver leadership technologies and products as we continue to transform AMD." Lisa Su is the company's first female CEO, who took over at the beginning of this month, following the departure Rory Read.
Over the next quarter, AMD will be restructuring in order to achieve higher future profits and enable better long-term growth. In doing so, the company will lay off 7 percent of its workforce.
AMD's Enterprise, Embedded and Semi-Custom segment reeled in 6 percent more revenue compared to the previous quarter, generating an operating income of $108 million, up from $97 million in Q2 2014 and $92 million in Q3 2013. This rise is likely thanks to AMD's role in the Xbox One and PlayStation 4.
Unfortunately, the Computing and Graphics segment didn't do so well, as its revenue decreased by 6 percent over the past quarter and 16 percent compared to Q3 2013, running at an operating loss of $17 million. Considering how aggressively Nvidia has priced the GTX 970, we also don't expect this to change anytime soon.
For Q4 2014, AMD expects revenue to fall by 13 percent, give or take 3 percent.
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What really makes it complex is that AM3+ is so outdated compared to Z97 and X99 it makes it really hard for me and others to recommend the FX line-up. Even though it is antiquated, right now AM3+ is a competitive value especially versus Z97.
That doesn't account for the fact that many are afraid that AMD is moving on from AM3+ soon and just working on APUs. They really have dug a hole for themselves. I hope after all the restructuring and stuff is done they make their products more cut and dry.
I think more development of their SOC to offer gaming level graphics performance with reasonable battery life will make them a sales success. They are almost their in terms of graphics performance, but they need to make serious progress in thermals and power consumption. The 20nM process might help them out a bit.
AMD needs a scalable architecture that is powerful and power efficient on both the desktop and laptop sector that can satisfy both the mainstream and enthusiast audience that they cater to.
AMD admitted that bulldozer architecture was a failure and is working in a new architecture with the code name Zen (I assume they have given up the idea of "more cores" and they are going to more performance per core).
I really hope they will create a CPU that will come closer to Sandybridge in perfomance per core per GHz. This will allow AMD to be competitive again like they were with thuban (AMD's best performance per core per GHz so far).
I am just waiting to see the results...
But AMDs segment right now is getting devoured from the bottom up. Chromebooks are all running ARM or Intel chips. They effectively invalidate AMDs market position given their price point. I do not think there is much of a market left for growth in desktop computers - Intel is trouncing them in NUCs, which are the end game of general purpose desktops. And more and more people are forsaking their aging laptops and desktops to just use their phone for everything.
I would not be surprised if AMD has to kill their CPU business and start shipping ARM SoCs with radeon graphics. But that would be awful for consumers because so much software is Intel locked and will never be recompiled for ARM, and as such Intel would runaway with a fortune on their ISA which they do not license to anyone else. But from AMD's perspective using ARMs CPU cores and fighting Nvidia in the premium SoC market might be their only option.