CPU/Mobo AMD hit by the 'Perfect Storm'..

P

Private Ryan

Skilled
Thursday, April 19, 2007

Sunnyvale (CA) – AMD has wrapped up an extremely rocky quarter and the company used strong vocabulary to tell analysts that the firm's Q1 was a “meltdown” and “not just a miss.” However, the company intends to fix its damaged ship and sail straight through the remaining portion of what the firm calls a "perfect storm."
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Many semiconductor companies mention in their disclaimer in quarter conference calls that the “semiconductor industry is generally volatile.” This phrase especially applies to AMD, which was flying high in 14 consecutive quarters, but was brought down to brutal reality in just two quarters - due in part to challenges the company isn’t used to dealing with and in part to competitors that have been gaining lots of traction.

President Dirk Meyer explained that the company experienced a “perfect storm” of challenges in Q1 that resulted in declining shipment numbers and a decrease in average selling prices. The company is still trying to recover from delivery issues in the channel, where many retailers switched to Intel, as AMD neglected smaller customers in Q4 and provided preferred treatment to new and larger customers such as Dell and Lenovo. Pricing pressure remained intense, as Intel “did everything in its power to protect its monopoly,” Meyer said. Delayed products, especially in the GPU segment, declines in the consumer electronics market, as well as a much more complex product portfolio than the company has had in past years added to an already difficult business environment.

AMD did not release any numbers on how dramatic the impact may have been on the basis of its microprocessor market share, other than generally admitting that it has suffered market share losses and that its microprocessor/chipset department lost $321 million during Q1.

However, market research firm iSuppli did a quick analysis of market data and came up with numbers that indicate that AMD’s battle against Intel has been thrown back to Q3 2005. In the overall microprocessor market (including all microprocessors and not just x86 units), AMD’s share is estimated to have dropped to 11.1%, down 4.6 percentage points from 15.7% in the fourth quarter. Rival Intel has gained 4.5 points in the same time frame and is estimated to hold about 80.2% of the market. “We knew Intel had gained share compared to AMD in the first quarter, but the sales gap between the companies widened to a much greater degree than we had expected,” said Dale Ford, vice president, market intelligence services for iSuppli. “The microprocessor market-share disparity between the companies expanded to 69.1 points in the first quarter, up from 60 points in the fourth quarter of 2006.”

Q1 was catastrophic for AMD. The firm had to swallow a net loss of $611 million, with a $300 million hit on its cash reserves. The company has $1.2 billion left in the bank and considers a level of $600 million as “acceptable minimal level.” There is no doubt that AMD cannot sustain many of these quarters without having to look for external cash. During the Q1 conference call, the company acknowledged the disappointing period and referred to the quarter as “lousy”, “unacceptable”, “a strong setback”, “more than a miss”, “a terrible start into the year”, “a meltdown” and “a collapse”.
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Source : TG Daily - How AMD plans to sail through the "perfect storm"

April 19, 2007

Sunnyvale (CA) – Declining microprocessor sales as well as dropping average selling prices for its microprocessors have pushed AMD deeper into the red. The company reported a net loss of $611 million on revenues of $1.233 billion, which is more than 20% below the guidance the company expected at the end of Q4 2006.
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Source : TGDaily - AMD reports $611 million loss
 
Too bad, i always loved the athlon 64. but this time, they are really going low down under. With a massive loss of $ 611 million, hope they dont get bankrupt in future. :(
 
Thats a real cause of worry, not only has it been hit by losses but has lost 5% of mkt share it had gained previously too. Understand this the microprosseor market has huge barriers to entry, and its only a sheer co-incidence that AMD and VIA have the X-86 patent sharing from Intel. If AMD goes, only VIA remains which makes Intel pretty much do anything it wants not only will they stop developing so quickly but also processors will be insanely priced.

So just hope for our sake that Barcelona turns out to be a saviour...
 
These fellows deserve it. How about the fact that none of the good socket 939 single core processors were made available in India. I had to get my processor off eBay. Fortunately, it was a good experience.

And don't get me started on 939 dual core processors.
 
Look what all those price cuts are doing to AMD..they are trying to stay afloat by slashing their prices now and then but in return are loosing so heavily on total profit made because they are not able to get the return for all the input costs..plus not to forget paying those new age einsteins who are always eager to leave in search of better compensations.. obviously nobody likes to stay on a sinking ship..and intel wud be more than happy to lure them with their overflowing coffers...today money rules..those geniuses dont live by ideologies...where the money flows..they flow too..and thts very natural..

last time around when intel was in a compromised position, they still didnt loose much market share..considering they hold 80% of the processor market.. seems like intel is the big ocean which isnt easily unsettled even if a few thousand gallons of water was taken out of it...but look what a small hole in AMD's boat has done to it...sailing intel's rough waves is gonna be very hard from now on...:hap5:
 
or maybe one of our top industrialists might go ahead and take over AMD...and develop processors in india, thereby using the cheap skilled workforce present in abundance in india and putting up a better challenge for Intel (I know that's wishful thinking but the mittals and the tatas have really shown the way....... after all the dollar-rupee conversion is a great advantage for us....the entire BPO business is the perfect example..)
 
Taking over AMD will be a tough job for even Tatas and ambanis..:hap5: Anyways, given the labor condition in india which is plagued by the unions and higher pay package demands nowadays, all these companies prefer China over India because of more disciplined work by the labor force there..

India is basically a service provider...all fabrication work is still the arena of China..:hap5:

OT: Height of Optimism..Reliance takes over Intel...:lol:
 
^^Simply cos going from 90 nm to 65 to 45 is not a cake walk...:p Eventually they will too, but it may take some time..plus given the current loss, they will try to be more cautious on every step..a far cry from the older days when they were known as the rebels..taking risks as they came..;)
 
u mean to say they are extra cautious..hmm hope they are not late this time.....btw according to amds roadmap when is barcelona launching????

also if amd was an indian company i guess they would have released a 128bit processor to fool the public to turn loss into profit...lol this days i more into pj business
 
I feel Motorola, Freescale and AMD should join hands and combine their Technology to counter Intel!! Motorola G4 Processors were hit for Apple Macintosh, now since Apple has join hands with Intel. Motorola should go with AMD, anyway just my personal opinion guys!!
 
Just imagine if there would be a merger between intel & amd what would happen .Any one of you think this can happen in wildest of your dreams?
 
i doubt if that ever happens, but is it does we will get the same processors for years . over priced things .... bad bad idea n bad dream
 
Just imagine if there would be a merger between intel & amd what would happen .Any one of you think this can happen in wildest of your dreams?
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Core 2 duo E6600 - 30k

Core 2 Duo E6300 - 25k

Core 2 Duo E4300 - 20k

Wildest dreams.......yep :S
 
Vishal2005 said:
Just imagine if there would be a merger between intel & amd what would happen .Any one of you think this can happen in wildest of your dreams?
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I thought Reliance taking over Intel was my height of optimism...but well done bro, u have surpassed me...:rofl:

Now this is the Highest height of optimism...:p

Yeah wot next, Pepsi n Coca cola making CocaPep or something together..Microsoft sharing its windows source code with Linux..for free...eh? :p :lol:
 
Private Ryan said:
OT: Height of Optimism..Reliance takes over Intel...:lol:
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Thats not the height of optimism, thats the height of day dreaming. :rofl: :tongue:

and yeah an AMD-Intel merger is the height of optimism (for Intel maybe, not for end users). It will be a bad thing for us end users as such a merger will give rise to a monopoly condition in the desktop processor market and the prices will rise and yet there will be no need for constant innovation.
 
Lord Nemesis said:
thats the height of day dreaming.
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:lol: :lol:

Btw,why dont companies like motorola , samsung get into this highly monopolized business..imho they cud atleast give intel some competition... samsung n moto do make low level procs, why not diversify into full fledge pc proc manufacturing? i think they have the money and infrastructure to support such an ambitious project...
 
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