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AMD in peril?
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darkxshade
Lifer
I never thought it was a good idea, in fact I thought their timing on the deal was horrible(It would have been a great move had it been a year sooner). But at the time of this deal, Intel was making a huge comeback with the C2D, I was thinking AMD would need every cent they had to stay competitive but instead they decided that competing with Intel wasn't enough challenge, they had to take on Nvidia as well(while givign up all their cash + adding debt for ATI)? As a result, both Barcelona & R600 is delayed... wonderful. Seriously, what were they thinking?
LordSnailz
Diamond Member
It's hard to say whether it was a good moveor not so early in the game, wait a couple years and see how well it does. Personally, I hope you're right though, I'm heavily invested in intc 🙂
LordSnailz
Diamond Member
Intel tried it in the past but failed, both companies are at it again ... I think it's definitely the right direction to go. But I think the earliest benefit that AMD will see from ATI would be the chipset... offer something along the lines of Intel's 'platform' idea.
LegendKiller
Lifer
I kept saying it was a stupid idea and I was lambasted for it. Funny, I don't see those people around anymore.
AMD has suffered from the same problem all of the time, the lack of diversified products, the inability to execute properly, and the unwillingness to fully commit to markets.
1. Diversified products. Flash ram, networking, CPU, chipsets, servers and desktop, intel has it all and does well everywhere. However, if CPUs needs help, it has other sectors to call upon to support that segment. All AMD really has is flash and that isn't huge.
2. Inability to execute properly. The biggest problem with AMD stuff for a long time was the fact they let other people make their chipsets. Depending on 3rd tier manufacturers was a *HORRIBLE* idea, as it created incompatbilities. With Nvidia and ATI, it's much better, but without strong standards and benchmarks they still suffer from a black eye syndrome. Even when they get all of the pieces together they fail to keep driving their product higher and higher, eventually they slack off and fall by the wayside, like now.
3. Unwillingness to commit to markets. They half-arsed server, desktop they failed to get complete OEM support. Although this isn't totally their fault, going up against Intel and it's deep pockets (see problem 1) hurts, a lot.
This whole ATI thing is such a stupid move. The last thing they needed to do is go trotting down a non-core competency path. THey are a flash ram and CPU company, not graphics. They have a hard time even being a successful CPU/Flash company and they expected to excel at graphics?
With the tight timeframes of graphics, where a few month lag behind Nvidia can place them a half generation behind, they are going to lose tons of revenue and destroy a lot of shareholder value. The execs are desperate for ideas and ATI was a desperation move.
At this point their combined ATI/AMD products need to be so superior to Nvidia or Intel that it isn't even conceivable for them to execute properly, not based upon historical events. Its really too bad.
dullard
Elite Member
I'll add one more thing to LegendKiller's post. Even if AMD does excel at graphics, graphics is a low profit (if any profit) field. The R&D costs are enormous. And yet most people still get integrated graphics or <$50 graphics cards. Thus, the revenue is low. Low revenue + high costs = low profit. There was a reason ATI had so much debt.
With multi-core processors being the future, it just makes sense to put graphics on one of those cores. Thus, AMD had to do it. But, it'll be a very painful transition for AMD.
With multi-core processors being the future, it just makes sense to put graphics on one of those cores. Thus, AMD had to do it. But, it'll be a very painful transition for AMD.
AMCRambler
Diamond Member
I got one of them FX-55 thingy's for my new one. Luv them new fangled pro-sessers.
iversonyin
Diamond Member
Yea, its in peril. now sell your 50 shares already. 😛
LegendKiller
Lifer
Nobody said they couldn't control their own destiny. I think most people say they can. However, do they control it the right way or the wrong way?
darkxshade
Lifer
Honestly, the acquistion was the right thing to do for AMD and if they manage a comeback, they will have a better advantage then if they hadn't. All I'm saying is that they did it at the worst possible time. They are simply bleeding cash right now. It'll be interesting to see how it'll play out. I'm seriously considering buying some put options on AMD, if Barcelona &/or R600 disappoints, that'll do it for good ol AMD.
i'll be accumulating from 12 down to 9. i think at the 10 range they will be very attractive to PE takeover but even without M&A certainly worth gambling on a roaring return. Even if they don't turn profitable right away, I think if they dethrone Intel with their new chips, Wall St will give it the valuation it had 1 year ago.
The primary reason they bought ATI was to mimic what Intel did with their integrated graphics low end desktop chipsets. AMD, even if not successful in dethroning C2D, has a good chance of grabbing lower end desktop market if they somehow use the merger synergy to kill the Intel Celeron.
RelaxTheMind
Platinum Member
I went from amd x2 to core 2 duo just yesterday.
MobileLoser
Member
The private equity people are very aggressive these days, especially with the most prominent, Blackstone Group, going public soon. To maintain the momentum into its IPO Blackstone will need to remain aggressive.
It is possible AMD will be privatized, but companies with large debt and low cash flow are not the best choice of the private equity folk.
It is possible AMD will be privatized, but companies with large debt and low cash flow are not the best choice of the private equity folk.
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