Anyone proficient with public relation strategies would be familiar with the concept of “controlled leaks” and “damage control. AMD’s filing of new charges against Intel and the rumour of an imminent restructuring announcement is just too much of a coincidence. Reading bits and pieces of the lawsuit reveals just how badly AMD’s business has become that anyone can only conclude that insolvency is inevitable. Conveniently, the asset-lite rumour started floating around giving just the needed amount of hope to anyone planning to continue to do business with AMD. The last thing AMD wishes is for its customers to think it is a risky option for future design platforms.
There are several ways of looking into the two AMD related events today. One that everyone should be familiar by now is the direct correlation between AMD’s cries of monopoly and its poor financial performance. Invariably, disastrous news from AMD always seem to follow everytime they talk about Intel's alleged illegal business practices. Anyone following AMD devotedly needs to hold on tight because this complaint is the biggest one yet. If AMD wasn't lying all along and indeed have an asset-lite strategy and were to announce it soon, based on the proximity with the new lawsuit, I can only conclude it’s going to be bad for AMD. Whatever the deal is, it must be something so awful that AMD needed to a file a lawsuit/excuse/scapegoat to justify their decision on asset-lite.
(thanks to enumae for the pdf link)
5.06.2008
AMD's Asset-Lite could be something really awful
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227 comments:
«Oldest ‹Older 201 – 227 of 227Governments are like that. When you are the guys who are responsible for writing and enforcing the law, you start to think that you're above it (and I guess in most non-democratic countries it is true). So I am not sure that any government official sees the hypocrisy when they are enforcing laws against one entity while bending or ignoring the law themselves.
I feel as if any action by the EU against Intel will be very bittersweet for AMD. And it will be heavy on the "bitter" part of that. Say that Intel has been taking part in anti-competitive practices and completely stops now, thus leveling the playing field from that standpoint. Now what? AMD is in a very poor position from which to attempt to take advantage of an opportunity like that, even assuming it was to develop. Intel can weather a heavy fine and added regulation, especially if AMD is unable to get back to a position similar to what they had when they were the performance leader.
So we may be watching a market where the market leader is restrained just when there is no competition to take advantage of it. I think AMD understood this absurd situation when they told a judge that their problem is that they're woefully short of the revenue share they need in order to survive. It's as if they were finally admitting that the problem isn't that Intel is making too much money or selling too many CPUs... it's that AMD isn't making enough money. Fining Intel isn't going to fix that. Throwing more investment dollars at AMD may not fix it, and giving them enormous breaks on building new fabs may not fix it. Or at least, may not fix it in time to keep AMD from becoming irrelevant.
There are actually claims denying the fine from EU (yet?).
http://uk.reuters.com/article/internetNews/idUKL2891987820080529
These links are pretty much appear same page with the contradicting news. Nevertheless, those wishful thinking AMD fanbois like the one that running amdzone somehow can miss that easily.
If there was actually no such decision yet, the damage has been done to intel's image anyway as some would not be verifying the report.
Some of you may find the following article on Ruiz's time at Motorola to be quiet fascinating:
http://www.thestreet.com/story/10418988/1/amd-ceos-shoddy-record-taints-turnaround.html
I found it an enjoyable read.
Giant-
Remember when you asked a few weeks back what will my graphic choice will be with the QX9770/P5E3/DDR-3 1800 setup? Well, I waited quite a while for the main structure to be built, and it seems the wait for the furnishing are going to pay off in spades during the next month.
NVDA’s share price is depressed and AMD/ATI are fighting for their lives. There is quite a bit of speculation that a major graphics battle is brewing. We all knew this was coming, but frankly, I didn’t think it was going to be this big.
INTC’s products are a lock. However, much remains to be seen with the X4870 X2 vs. GTX 280 setups.
In any case, what ever happens, I’ll be pulling the trigger on this next generation graphics solution(s). We shall see.
http://www.tomshardware.com/news/amd-ati-radeon,5514.html
and………….
http://www.dvhardware.net/article27597.html
All said, this will be good, no doubt.
SPARKS
How are you doing Sparks? The graphics wars certainly seem to be heating up! Just over two weeks to go and we’ll find out who the victor is this time around. I can’t wait to see the performance graphs from our friends at Hexus, Anandtech, [H]ardOCP etc.
I’m prepared for either contingency; my P5B Deluxe (P965) board supports Crossfire, while the 790i board supports SLI. The only thing I’m not too sure about is Crossfire performance on the 965 board, since its second PCI-E slot is limited to 4X unlike the 790i board which delivers the full 16X to each slot.
Whoever offers the faster solution gets my money. I’ll likely start with a single 4870 X2 or 280 GTX and add another after a while when the prices go down a little. A pair of either should offer a tremendous boost over my current 8800 GT SLI solution.
I also have to admit to spending more money on this rather expensive hobby of ours! I was reading some of your conversations with Scientia when I came across the part involving a 4GHz QX9770 when I finally made the decision to buy one of my own! As luck would have it a friend of mine recently purchased a QX9650 on a tremendous sale at Fry’s Electronics and decided he didn’t need it after all. He asked if I wanted it. I snapped it up for $700 and slapped it in the 790i board! 1800 FSB with matching DD3 speeds, 9x multiplier and 1.38V for a rather nice 4.05GHz! Never passes 57C on air, with a TRUE 120 and a 120mm S-flex fan. This thing wipes the floor with my old E8400 or Q6600 in video encoding and rendering in Houdini. I transferred the E8400 back to the P5B Deluxe and as such I’ve got a spare Q6600 sitting around. I’ll probably end up selling that, I don’t need any more computers around here!
-GIANT
“This thing wipes the floor with my old E8400 or Q6600.”
“I was reading some of your conversations with Scientia when I came across the part involving a 4GHz QX9770..”
I strongly urge any of the ‘regulars’ on this site read that thread between Scientia and me. It will give you an insight on the outstanding performance of the QX9770/X48 combo, even with the staunchest skeptic hammering away at my data. In fact, at one point, he even suggested I was bragging. I wasn’t. I spent a lot of money on the fastest most powerful chip on the planet; I got what I paid for. Even he, peppered with denial, finally acquiesced with some arguable comment concerning socket power limitations. I felt the point was made. To his credit, however, he did post it verbatim.
Giant, as far as your applications are concerned, you couldn’t have made a wiser choice. That’s what we’re here for, top performance. Now both you and I have machines that can handle anything they throw at them, no compromises, no bullshit excuses; just the way I like ‘em.
Hardware must stay ahead of the software curve, always. INTC has done it spades. I’m glad to see you go extreme because nothin even comes close, enjoy.
Here’s to the top bin, Cheers!
BTW as a side note, NVDA is on the rebound, INTC is on the move, and AMD has dropped a buck in four days. Something’s ugly, and it ain’t getting better for the ‘Scrappy Little Company’. The Street will hold no quarter for 2Q earnings, or lack of. This is gospel.
SPARKS
"The Street will hold no quarter for 2Q earnings, or lack of. This is gospel."
I beg to differ on this - the expectations are so low for AMD at this point that it will be hard for AMD to under-deliver (from a Wall St perspective). All Ruiz has to do is give something positive in the outlook - another veiled allusion to asset smart/light/[new name here], another we 'plan to break even', 'profitability is a top priority' (my personal favorite Ruiz-ism) and we sold 400K (replace with new # here) Barcelonas (as people will think wow that's a lot of chips, and then realize it is less than three days of total production when someone puts it into perspective. Sprinkle in another marketing study on the effects of the evil Intel monopoly and AMD will get yet another temporary bounce - until sanity comes back in, and some analyst asks... how? or could you provide some detail? or why will asset smart help again?
The same thing happened around Q1 earnings... it ran up a little the 2 days heading into earnings, only to drift back down after analysts realized all they did was hit the lowered #'s they warned on.
Barring a catastrophe, I think AMD has far less risk of disappointing Wall St then surprising them positively (not that you should go buy the stock). Given the recent issues and games AMD has played with the recent earnings forecasts, you need to consider that simply meeting the lowered expectations this time around will likely be considered a positive surprise by many analysts. The current average EPS estimate is -$0.52 (last quarter actual was -0.51, so analysts are expecting a slightly worse Q2 quarter than what was a really poor Q1)
“Barring a catastrophe,………………..”
Hmmm, I don’t about you, but I think they’re already there. If they’re not there yet, they’re sure are on they’re way. The whole shebang gives a new meaning to AC/DC’s, “Highway To Hell”! About the only idiots that are holding on to this dog are the institutions, roughly 84%, and the ‘pie in the sky’ morons who bought this mess in the low thirties back 1Q and 2Q 2006. Hold, for seven quarters!?!? GMAFB
“(not that you should go buy the stock)” Now that is a sound financial piece of advice!
Here’s my point, considering the relentless blows by INTC and NVDA product lineups, AMD’s corporate musical chairs, fusion fissile (read: Issac, ATOM, Tegra), serious cuts in R+D, dwindling cash, and finally, AMD partner reluctance to move forward on future technologies, I think ‘Attila The Anon’s’, “Tic Toc, Tic Toc, BK!, BK!”, may come to fruition.
AMD’s flirtations with 7 dollars a share is over. They can put pounds of lipstick on the pig, yet someone’s going to wake up and smell the coffee.
I think 2Q is a turning point before INTC pounds home more scheduled price cuts and Nehalem performance numbers. Additionally, NVDA’s new GTX 200 and 280’s are looking at a gain of 2X performance.
A half a million Barcelona’s ain’t gonna cut it, not with this earnings report, and certainly not after cutting 10% of their work force with no appreciable improvement in margins.
Frankly, how friggin’ ugly can you go??
SPARKS
Ahh....here comes the fastball, high and tight.
http://www.theinquirer.net/gb/inquirer/news/2008/06/03/computex-2008-great-wall
SPARKS
Sparks - not disagreeing with your competitive assessment... but Wall St has already factored this (largely) in.
If you figure semis should trade in the 15-20 P/E range (unless you are a high flier like Apple), this would mean a $6-7 stock should have ~$0.30-0.45 in earnings per share. With ~600mil shares this would mean ~180-300Mil type earnings. (I'm rounding liberally)
Now of course AMD is nowhere near this - but 'the street' is factoring in 2 things:
1) They continue to believe Ruiz claim of profitability in H2'08 (right or wrong - I personally think this is wrong)
2) There will be some sort of merger, takeover or spinoff (while I think this is a decent possibility, this should really never be a reason for the average home gamer to invest in a stock).
So I'll say here what I also said to the AMD crowd who said Barcy's coming out, time to buy the stock. Short term, products don't generally turn a stock price until volume sales are seen (except for startups/speculative stocks). So even if Nehalem comes out of the gate strong, you will not see this impact AMD's stock price (or Intel's for that matter) until well into 2009.
The key question for AMD, if Nehalem is strong, is will Intel use this to recover margins and keep prices up in the the enthusiast & server space or will they come in at the Penryn price points, pushing Penryn down the price change which will then push K10 down further. Personally, I think Intel will tend to mainly increase the price as the volume will be low and they will have pricing power in the spaces Nehalem will launch in. As a result it will hit some of AMD's high end server biz, but their main high volume biz at the low end of the desktop and server markets will remain largely unchanged through probably H1'09.
Ooops...off a decimal place the earnings range would be in the $18-30Mil range
errr....ignore last comment, the original math was OK.
If you believe FUD: (K10 dual core postponed?)
http://www.fudzilla.com/index.php?option=com_content&task=view&id=7673&Itemid=1
I speculated a while back that without serious clockspeed increases there would be no point and now that AMD has sabotaged any potential 'high end' dual core market with their ridiculousness with tri-core... this may actually be a good business decision!
Why bother with K10 dual cores unless they are substantially better than K8 duals?
It will be interesting to see what happens on 45nm.... if they shrink K8, this in my view would be acknowledgment that the K10 core is just not much better than the K8 core and is more or less just a server chip with peripheral improvements like HT3.0, L3 cache, independent core clocking, etc.. that really only significantly comes into play in 4P+ type applications.
I guess we we'll have to wait even longer for an actual K8 vs K10 'core for core' comparison
Sparks said "However, what you said about the AMD piss pumpers, is very true. They’ve been smacked down so many times they’re not going to say squat until they see some hard numbers. No doubt, that’s why they’re so quiet."
If the Fuad rumor about Deneb being delayed is true, and the Nehalem 'benchmarks' are true (huge IPC increase over Yorkfield), and is already running at 3.6GHz on air (courtesy XtremeCPUs), then AMD's next few quarters are going to be worse, not better.
If the Fuad rumor about Deneb being delayed is true, and the Nehalem 'benchmarks' are true (huge IPC increase over Yorkfield), and is already running at 3.6GHz on air (courtesy XtremeCPUs), then AMD's next few quarters are going to be worse, not better.
The issue is not Deneb or even Nehalem performance - Intel could release a 5GHz part in Q4 and it wouldn't really impact the economics until H2'09. Intel already has a superior product at the high end, so extending this lead just means Intel can fatten their margins - it's not like AMD is competing in that space right now anyway.
Yes they will start eating a bit into the high end server segment - but despite everyone yelling 'great margins' 'casj cow' in this area, the volume is low and while it helps the bottom line SOME, you are talkin about >10X lower volumes. Plus you will not see the true MP Nehalems server parts until 2009.
So the real question is, how quickly can Intel get more 45nm capacity on line? Nehalem is a bigger part than an MCM Penryn, so at this point outside of the server space, Intel is better off producing Penryn quads as opposed to Nehalems - better yield, smaller die. Only when Intel gets significantly more 45nm capacity online will you see substantial volumes of Nehalem in desktop space, and I suspect that will be closer to mid-2009. So that is when AMD has to have their act toghether by. The timing of Deneb at this point is less critical than the actual performance (so long as AMD gets it out in H1'09)
Now in the quadcore high end server the story is......
from Anandtech.
Tick Tock Tick ....
"So for a few months, AMD might have a slight edge over the Intel Armada, but not for long. Looking at how well the Xeon "Harpertown" 5472 performs, and knowing that the next Xeon MP "Dunnington" is basically three of those "Harpertown" Xeons with a large L3 cache, it is clear Intel is going to assault AMD's last stronghold in the near future"
Tock
Hello Nehalem
Goodby AMD
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