AMD GPU Division loses 7 Million in Q2

[n0x1ous]

Interesting read.....

http://www.engadget.com/2011/07/21/amd-earnings-continue-to-drop-despite-record-cpu-sales-gpu-busi/

 

[Madcatatlas]

Gonna call bullshit on this article until proven othervise.

 

[jones377]

It's what AMD reported for Q2

 

[SirPauly]

Gonna call bullshit on this article until proven othervise.

Graphics segment revenue was $367 million, down 11% compared to the prior quarter, mainly due to lower discrete mobile unit shipments and seasonality in the desktop discrete graphics at inboard market. Graphics segment operating loss was $7 million, down $26 million from the prior quarter, primarily due to a lower revenue and increased important investments in our next-generation 28-nanometer leadership graphic offerings.

http://seekingalpha.com/article/281...sses-q2-2011-results-earnings-call-transcript

 

[GaiaHunter]

It is simple - APUs are cannibalizing the low end graphics division and are reported as CPU revenues.

 

[96Firebird]

Going off what SirPauly quoted, I am betting they had to put a lot of money into the R&D of 28nm, which will show no profits until later this year/early next year.

 

[Dark Shroud]

Yeah is looks like AMD is dumping tons of money into R&D. Between Bulldozer now and Bobcat based APUs next year AMD will have a strong product line up. That money invested seems to have been well spent.

 

[GaiaHunter]

Interesting how things change.

Sometime ago we would have something like "AMD has yet another quarter in the red" and no mention of the graphics division profits. Now we get "AMD graphics division is in the red" and no mention of a profit for the quarter for AMD.

Full breakdown.

http://www.marketwire.com/press-release/amd-reports-second-quarter-results-nyse-amd-1541082.htm

 

[Red Storm]

Every time we're in a lull between launches, we seem to get posts reminding us that money that goes into R&D and production for future products is not an immediate profit.

 

[n0x1ous]

i only posted about the graphics since this is the GPU forum

 

[blckgrffn]

Sucks if you are in the GPU division and just had your bonus eaten by production classification. Not that I know that happened... but I can imagine it did.

 

[notty22]

33 million Q2 2010 to losing money is the difference with Nvidia having a strong competitor now and shipping Fermi late then.

http://seekingalpha.com/news-article/1482091-amd-reports-second-quarter-results

• Graphics segment revenue decreased 11 percent sequentially and 17 percent year-over-year. The sequential decrease was driven primarily by lower discrete mobile unit shipments and seasonality in the desktop discrete graphics add-in board market. The annual decrease was primarily driven by lower unit shipments.
  • Operating loss was $7 million, compared with operating income of $19 million in Q1 11 and $33 million in Q2 10.
  • GPU ASP was flat sequentially and year-over-year.
  • AMD expanded its offerings for the professional graphics market with the introduction of the AMD FirePro" V5900 and FirePro" V7900 graphics cards which provide enhanced visual capabilities designed to improve workflow and increase productivity for engineers and designers.
  • Dell announced a new, ultra-high performance blade server powered by the AMD FirePro" V7800P professional graphics.
  • The award-winning AMD Radeon" HD 6000 family of graphics expanded with the introduction of two sub-$100 cards offering support for DirectX 11, AMD App acceleration and AMD Eyefinity multi-display technologies.
  • AMD extended its position as the graphics provider of choice for the game console market, where more than 140 million current-generation games consoles are powered by AMD graphics technology. Nintendo announced it selected AMD to provide the graphics technology for its next-generation Wii U" System that will be available next year.

Current Outlook

 

[badb0y]

33 million Q2 2010 to losing money is the difference with Nvidia having a strong competitor now and shipping Fermi late then.

Nah that's not entirely true, the R&D for 28 nm is probably taking it's toll right now along with what GaiaHunter said about Fusion APU cannibalizing low end sales of discrete GPUs. Not to mention the discrete GPU market is shrinking as a whole.

At least they confirmed 2H 2011 launch for Southern Islands . It's already in production, hoping everything goes well.

 

[notty22]

Nah that's not entirely true, the R&D for 28 nm is probably taking it's toll right now along with what GaiaHunter said about Fusion APU cannibalizing low end sales of discrete GPUs. Not to mention the discrete GPU market is shrinking as a whole.

At least they confirmed 2H 2011 launch for Southern Islands . It's already in production, hoping everything goes well.

I do not see mention of r+d costs anywhere, and there are numerous breakdowns of exactly what was reported yesterday.

 

[aghusker]

Good news in that article:

We also passed several critical milestones in the second quarter as we prepare our next-generation 28-nanometer graphics family. We have working silicon in-house and remain on track to deliver the first members of what we expect will be another industry-leading GPU family to market later this year. We expect to be at the forefront of the GPU industry's transition to 28-nanometer.

 

[Nintendesert]

That is good news on the next gen cards, I'm looking to replace my 5870 but can't bring myself to buy anything this gen. I'm hoping for strong showings from both AMD and Nvidia for later this year.

 

[Genx87]

It is simple - APUs are cannibalizing the low end graphics division and are reported as CPU revenues.

Sure they are...Llano came out when?

 

[bryanW1995]

From looking at the last few years, it appears more and more likely to me that AMD/Nvidia are approaching a zero sum endgame that will have no winner and only 1 survivor. They both have a model to spread gpu R & D costs over multiple applications (professional/consumer for NV and cpu/gpu for AMD), though NV's model imho is better b/c it doesn't put them in direct competition with 800 lb gorilla in said gorilla's backyard. My sad conclusion is that the best that we can hope for is a longer time period between product releases in the future.

That is good news on the next gen cards, I'm looking to replace my 5870 but can't bring myself to buy anything this gen. I'm hoping for strong showings from both AMD and Nvidia for later this year.

I don't blame you, this "generation" is just a slight iterative improvement over the 5xxx and gtx 4xx series, much like 4890 and gtx 285 were to 4870 and gtx 280. The "next" generation hd 7xxx and gtx 6xx will be the true 2nd generation dx11 cards.

 

[OCGuy]

It is simple - APUs are cannibalizing the low end graphics division and are reported as CPU revenues.

You don't actually believe this do you?

I'm actually rather surprised by this. The Bitcoin craze has caused every extra Cypress chip to be bought up, even though there is a newer "generation" out.

Gonna call bullshit on this article until proven othervise.

Now that you know it is true, what are your thoughts?

 

[notty22]

This is another writer's take on the report : I highlighted only the graphics information, but there is some opinion regarding BD, and server sales.
http://wap.dailytech.com/mobile/Article.aspx?newsid=22231

III. GPU Sales Post Bigger Drop

More troubling, AMD's GPU revenue fell 17 from Q2 2010 and 11 percent from Q1 2011. It appears rival NVIDIA Corp. (NVDA) is picking up stream with its GeForce 500 series, which aired in November 2010. AMD also suffered from part shortages -- its high end Radeon HD 6990 GPU-- the most powerful single-slot solution on the market today -- has been virtually entirely out of stock since April.

NVIDIA is preparing its Kepler architecture (28 nm) for a Q4 2011 launch. Products with Kepler chips will presumably be branded GeForce 6xx GPUs. AMD has promised to release its own next generation CPUs Southern Islands (28 nm), in H2 2011, so it could presumably get the jump on its competitor. Southern Islands will presumably be branded the Radeon 7xxx series.

Southern Islands, which contains both a die shrink and a new graphics core design, is currently in mass production, so AMD seems to be doing pretty good currently.

No one knows where AMD and NVIDIA currently sit in market share. The best numbers on hand come from back in May, which put AMD at 40.5 percent of discrete GPU sales and NVIDIA at 59.6. This is a reversal from 2010, when AMD briefly took the lead in sales from NVIDIA.

While AMD may now be back to playing catch up, discrete sales are only a part of the value equation of the GPU unit to AMD. The great sales of Fusion are largely only thanks to AMD's GPU expertise, which it acquired when it purchased ATI Technologies.

 

[Saico]

This is another writer's take on the report : I highlighted only the graphics information, but there is some opinion regarding BD, and server sales.
http://wap.dailytech.com/mobile/Article.aspx?newsid=22231

Outdated and misused information. Kepler q4 2011? AMD is back to playing catch-up?
Really? Not worth reading.

 

[OCGuy]

Wow notty, I didn't realize how much it had switched back into nV's favor. Seems like the 4XX fiasco is behind them.

 

[PingviN]

Could it be AMD is moving R&D costs for Fusion (and/or other) products to the GPU department in order to finally show some positive numbers on the CPU side?

 

[badb0y]

Wow notty, I didn't realize how much it had switched back into nV's favor. Seems like the 4XX fiasco is behind them.

What? It's always 60/40 besides a few ups and downs. The only reason they were making money before was because they released their cards first. nVidia has much more brand recognition then AMD.

The only thing confusing me is how they lost money. 40% sales is not bad considering nVidia is plastered all over the world. It must be R&D, otherwise it makes no sense.

 

[Saico]

It's not like they lost lots of money, barely 7 millions. Most of the people already have proficient GPUs, so it's ok if demand drops a little. We have upcoming SI after all.