back to article AMD's chip-supply reassessment leads to big quarterly losses

AMD has released its financial results for the fourth quarter of 2012, and as expected, the numbers aren't pretty. In early December, AMD slashed its Wafer Supply Agreement with its chip-baking partner, Globalfoundries, and warned investors that it was going to take a sharp hit due to that action. They were right. If that …

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Anonymous Coward

Expert Analysis

I'm not a financial analyst or industry expert - however:

1) PC (particularly desktop) sales are falling dramatically

2) Intel command significantly greater market share in the laptop market due to low power and high performance offerings

3) AMD don't have a product range that is being widely adopted by tablet makers

4) AMD still make very powerful and market leading graphics chips / cards

5) AMD used to command a lead in large server farms with their Opteron chips offering good performance/power

So - what's the future outlook for AMD ? It seems bleak unless there is high demand for graphics cards and AMD command a lead on the large server market. Is this broadly right and if so, what's the future for them ?

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Silver badge

Re: Expert Analysis

I don't know, if the rumblings that AMD are making the graphics and CPU for the PS4 are true then that should be a step in the right direction. If they're doing either for the 720 then that's also a big plus.

Likewise AMD have been working on those new ARM server chips for a while, that could lead to a break in the low power tablet market also, if they can start making arm chips with ATI graphics onbourd.

Desktop wise though they're still boned, I'm pretty certain my next PC will be AMD though, just because I like supporting the underdog, but that next PC isn't coming for another couple years.

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Anonymous Coward

Re: Expert Analysis - Hardly

AC- I think you're a little confused or behind the times perhaps?

1. PC desktop sales are NOT falling dramatically, but laptop sales and portables are increasing.

2. Actually Intel can't "command" anything but they currently enjoy greater laptop sales than AMD - not because they have a better product, but because they use bribe money, aka marketing money to entice OEMs. AMD's laptop APUs are actually better in performance for most consumers and almost equal in power consumption to Intel's best laptop APUs.

3. Actually AMD does have a product line (as you will see soon) that is widely adopted by tablet makers and all other makers of portable devices. This is what Rory Read was hied to implement and he has done so. If you listened to AMD's financial phone conference you'd know they are about to announce many new portable OEM products shipping in Q1.

4. In addition to AMD's powerful and class leading GPUs, they make class leading APUs and very powerful desktop/laptop CPUs/APUs. While Intel may hold the performance crown at the moment in CPUs but not in desktop or laptop APUs, AMD is selling a ton of FX processors because they deliver better performance per dollar than Intel's i3, i5, i7 line and the FX processors far exceed any Intel CPU in multi-taking ops. The only thing Intel has going is bragging rights for the faster IPC, at the moment and that is only part of what PC performance is all about - as AMD has proven and consumers have substantiated.

5. AMD did lose a lot of enterprise server share because they castrated their server division. Rory Read understands that this is a key market where AMD has good products to offer and they bought SeaMicro to accelerate AMD's ability to recover the loss server market share - which is quite likely as micro servers are in high demand and AMD has the best hardware for that segment - right now. They will need to continue their development in server tech, which is what Bulldozer was originally intended for. Piledriver will improve things considerably and OEMs are already building wonderful low power, heigh efficiency servers with Trinity APUs - which were never intended for servers, but that work amazingly well for servers.

The future for AMD is almost limitless in reality. APUs are what 98% of PCs and portables will be using in a few years. There will still be a niche market for discrete CPU/APU applications for those willing to pay excessive prices for same. With AMD being far ahead of intel on APU development, they are in the driver's seat for a few years though Intel is making progress quickly. As noted above AMD already is in numerous portables and will be in a lot more.

Reportedly 1 in 3 laptops sold in Q4 of '12 had an AMD CPU/APU in it, which is impressive considering the size of AMD compared to intel. Intel has realized that portables are the growth future several years after AMD determined this. Now Intel is closing their desktop mobo division and trying to get portable sales to help their bottom line which is dwindling.

As far as AMD's financial situation they did far better than I expected them to do with the horrible economy and their massive restructuring. I would not be surprised at all to see several more quarters of red ink while they re-organise and purchase assets such as SeaMicro and other complimentary entities to grow their market share in many new as well as existing market segments. It's not easy for anyone in the PC industry right now be it Intel, Apple, Microsucks, et al but at least AMD is now adjusting to the market dynamics and finding new revenue streams as they continue to advance development across all of their product lines.

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Gold badge

Re: Expert Analysis - Hardly

You forget the other thing going on at AMD, they recently shelled out for an ARM license to design and build a 64-bit ARM processor for servers.

That's the one that may be giving Intel a few sleepless nights. I wouldn't be at all surprised to see that also crop up as an APU with decent Graphics / GPU compute support, as AMD are going that way with everything else. What you'd be looking at there would be something like a 64-bit Tegra3 on steroids, which could be a bit of a game changer in some very obvious markets.

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Anonymous Coward

Re: Expert Analysis - Hardly

ARM is another potention revenue stream and that is good for AMD. AMD already has SoC's and many low voltage designs that are in high demand. The key with AMD's limited resources is to pick and chose the best areas to generate the highest profits with some stability in an ever changing marketplace. Intel is only one competitor that they must deal with, there are many in the ARM segment.

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