AMD Pays GF to get out of wafer commitment

[Phynaz]

http://online.wsj.com/article/SB10001424127887324001104578163841987546704.html?mod=googlenews_wsj

AMD has coughed up $320M to Global Foundries so that they don't have to buy $500M of product this quarter. Instead they will only be buying $115M of product.

A 75% reduction in orders tells me they aren't selling crap.

 

[ShintaiDK]

Ouch. Paying to not make products....

The semiconductor charts for 2012 is also up, Sony overtook AMD. Their revenue dropped 1B$ year on year.

http://www.isuppli.com/Semiconducto...e-in-Global-Semiconductor-Market-in-2012.aspx

 

[SickBeast]

AMD's CPUs are overpriced and uncompetitive. They are also a very poorly run company from the top down.

 

[VirtualLarry]

I like my budget Thuban chips. If they had shrunk and made an 8-core Thuban, and added AVX and some of the other new opcodes, I would def. have purchased it.

 

[SlowSpyder]

AMD's CPUs are overpriced and uncompetitive. They are also a very poorly run company from the top down.

I'm not sure I can agree with your first statement, I think the FX6300 is a fantastic value. And an argument could be made for the FX8xx chips, too.

But the second statement you made; I don't believe truer words have ever been spoken. I think AMD had a bright future, AMD could have been a major player, they had some great technology, fabs, a mobile tech/handset division that could have been huge for them. Then Hector took over...

 

[Smoblikat]

I really like my thuban, it performs as a chip of this age should. Plus it has 6 cores, for 80$ you cant go wrong. Current AMD lineup is garbage though, I wouldnt pay more than 120$ for their 8 core processor.

http://online.wsj.com/article/SB10001424127887324001104578163841987546704.html?mod=googlenews_wsj

AMD has coughed up $320M to Global Foundries so that they don't have to buy $500M of product this quarter. Instead they will only be buying $115M of product.

A 75% reduction in orders tells me they aren't selling crap.

That equals 435m, they spent 320m to save 65m...............jesus crimminey.

 

[hokies83]

If Fx 8xxx had the IPC of thuban and the FX 8xxx overclocking Amd would have something.

Instead they give us a Slower IPC and more cores..

 

[SlowSpyder]

If Fx 8xxx had the IPC of thuban and the FX 8xxx overclocking Amd would have something.

Instead they give us a Slower IPC and more cores..

I heard a rumor that IPC does not decrease with Bulldozer.

 

[SickBeast]

I'm not sure I can agree with your first statement, I think the FX6300 is a fantastic value. And an argument could be made for the FX8xx chips, too.

But the second statement you made; I don't believe truer words have ever been spoken. I think AMD had a bright future, AMD could have been a major player, they had some great technology, fabs, a mobile tech/handset division that could have been huge for them. Then Hector took over...

AMD's CPUs have become niche products that do not interest me. Under very specific workloads they perform fine, but they still consume twice as much power compared to the Intel chips.

The power consumption issues are absolutely killing them in the laptop market.

 

[Idontcare]

http://online.wsj.com/article/SB10001424127887324001104578163841987546704.html?mod=googlenews_wsj

AMD has coughed up $320M to Global Foundries so that they don't have to buy $500M of product this quarter. Instead they will only be buying $115M of product.

A 75% reduction in orders tells me they aren't selling crap.

Must be one of those subscriber-only articles? Regardless, those numbers are dead awful. AMD really got hamstrung by Dirk's and Hector's creative accounting shenanigans when they spun off GloFo.

 

[Jovec]

That equals 435m, they spent 320m to save 65m...............jesus crimminey.

I'd like to see their numbers

You'd think they could do something else, like sell them $1 over cost, or bundle them with GPUs - buy a 7970 GE and get a 8350 for $100.

 

[Idontcare]

I'd like to see their numbers

You'd think they could do something else, like sell them $1 over cost, or bundle them with GPUs - buy a 7970 GE and get a 8350 for $100.

CEOs lose their jobs if they crater key metrics like gross margins and so forth by selling loads of product at cost.

Very few CEOs lose their jobs just because the company takes a "one time charge"...even if it happens repeatedly (see Hector Ruiz and ATI write-downs).

To you and me it makes no sense to pay $350m for nothing, we'd at least order $350m worth of engineering test wafers to drive better development of our DFM models and so forth - at least generate some data for the money - but you and I are long-term thinkers whereas the decision makers at AMD all are enriched well enough to be able to think purely short-term with little regard to the long-term consequences for the livelihood of 10,000 employees.

It takes balls to piss away $350m, this is predator AMD no less, but it looks like the predator mistook its shareholders as its prey

 

[Xpage]

I'd just order 500M of 28nm parts, if they cannot deliver what I wanted I'd tell them too bad. But i would assume their contract prevents that

 

[BD231]

Amd could be doing just as well as nvidia but for whatever reason they feel they need to progress upon a broken arch that offers nothing to the market in both value or performance. They have the tech to make viable cpus but theyre churning out pure crap, their driver teams on gpus are still behind and they seem to have lost the ability to accept a value orriented position in the market.

 

[Greenlepricon]

Amd could be doing just as well as nvidia but for whatever reason they feel they need to progress upon a broken arch that offers nothing to the market in both value or performance. They have the tech to make viable cpus but theyre churning out pure crap, their driver teams on gpus are still behind and they seem to have lost the ability to accept a value orriented position in the market.

Their drivers perform just as well if not better than Nvidia for me. Besides that their newest cpus were actually pretty impressive for the crutch that they've been carrying themselves on. Being stuck at 32nm and four year old technology is really hurting them. Saying they have the tech is a vast overstatement when you consider that they don't have many places to turn to right now. I wish they could shrink their processes or just increase their performance instantly, but it looks like we'll have to wait for that.

Also I don't know why you don't want to accept it, but their cpus are priced really well right now. Unless you're going linux or just need a ton of cores, they still lose, but that loss is at least $30 cheaper depending on which superior Intel cpu you choose. As far as value/price goes, they aren't doing so bad. In terms of overall performance and efficiency, they have their work cut out for them. It's a shame this hole in the road came up for them, but their management is really much too poor right now.

 

[KillerBee]

I used to buy only AMD but ever since the I7, they have never been able to keep up value wise for x86. People have been predicting the end for AMD for last 10 years though - so just hope they can maintain, if only to keep Intel prices in check.

 

[Ancalagon44]

I like my budget Thuban chips. If they had shrunk and made an 8-core Thuban, and added AVX and some of the other new opcodes, I would def. have purchased it.

Would have been a good idea, however AMD's shoddy management prevented it from happening and ended up nearly destroying the company's brandname.

 

[Torn Mind]

Also I don't know why you don't want to accept it, but their cpus are priced really well right now. Unless you're going linux or just need a ton of cores, they still lose, but that loss is at least $30 cheaper depending on which superior Intel cpu you choose. As far as value/price goes, they aren't doing so bad. In terms of overall performance and efficiency, they have their work cut out for them. It's a shame this hole in the road came up for them, but their management is really much too poor right now.

The reason they're priced so well is because Intel had the upper hand in pricing when the duel was Sandy Bridge vs. Bulldozer, even though AMD's chip was released later. AMD would much rather charge the 245 MSRP of the FX-8150 because they sorely need the money, but they can't because Intel has the i5s around.

 

[Fox5]

I really like my thuban, it performs as a chip of this age should. Plus it has 6 cores, for 80$ you cant go wrong. Current AMD lineup is garbage though, I wouldnt pay more than 120$ for their 8 core processor.



That equals 435m, they spent 320m to save 65m...............jesus crimminey.

Seriously, I would have just bought the platters and then dumped them on the market. At least maybe they'd get some market share and mind share and drive Intel profits down.

 

[Greenlepricon]

The reason they're priced so well is because Intel had the upper hand in pricing when the duel was Sandy Bridge vs. Bulldozer, even though AMD's chip was released later. AMD would much rather charge the 245 MSRP of the FX-8150 because they sorely need the money, but they can't because Intel has the i5s around.

They definitely messed up with the bulldozer pricing. It doesn't change the fact that the prices are pretty good right now. If the performance were only a bit better and as consistent as Sandy Bridge, they would actually be in a good spot right now. Too bad it's this performance gap that's keeping the prices down (although as someone who just installed a Vishera, it wasn't too bad a thing for me).

 

[BD231]

Their drivers perform just as well if not better than Nvidia for me. Besides that their newest cpus were actually pretty impressive for the crutch that they've been carrying themselves on. Being stuck at 32nm and four year old technology is really hurting them. Saying they have the tech is a vast overstatement when you consider that they don't have many places to turn to right now. I wish they could shrink their processes or just increase their performance instantly, but it looks like we'll have to wait for that.

Also I don't know why you don't want to accept it, but their cpus are priced really well right now. Unless you're going linux or just need a ton of cores, they still lose, but that loss is at least $30 cheaper depending on which superior Intel cpu you choose. As far as value/price goes, they aren't doing so bad. In terms of overall performance and efficiency, they have their work cut out for them. It's a shame this hole in the road came up for them, but their management is really much too poor right now.

Their drivers are flawed both in crossfire and single gpu config, its evident gaming is smoother on nvidia cards and u can find the research done on it in v&c. Amd DOES have access and ability to put out a chip better for current software and if youre telling me a chip as big/power hungry as vishera is anything close to what people want out of their hardware in a world of fast growing low power devices your dead wrong. Nobody cares about $30 dollars, especially considering the draw backs. They had a pretty good lock on the $120-150 market and with a less expensive design could have kept a better hold on it.

Instead they gave it up by lowering performance per dollar.

They have good gpus and the ability to progress upon aging tech with an obvious blueprint for success in intel. They fail to do so or even carve out a niche for themselves.

 

[meloz]

Someone at AMD must have done the calculation that paying GloFo upfront to not make products must overall be cheaper for AMD than actually building the products and selling them for what the market will pay. Or not selling them at all.

Very painful situation.

This shows how merciless the industry is. You regress in performance / die-size* (10% to rival(s), say), you might as well stop making products altogether because then you are totally at the mercy of your rival who dictates the performance / $ equation.

Brutal. Almost 'binary'. Either you lead or you die. No middle ground. Hopefully the 8000 series GPU will help the cashflow.


*: (Assusming same manufacturing node and costs, which is also not the case when comparing AMD versus Intel)

 

[Schmide]

Here's the rundown posted at Hot Hardware

 

[pablo87]

I raised that red flag 2 years ago and kept harping on it at s/a until Charlie shut me down (i then continued ranting on seeking alpha). I've always said that agreement was a friggin' albatross, an off balance sheet liability if I've ever seen one.

AMD s uninvestable, period.

Here is the actual press release from AMD titled 'AMD amends wafer supply agreement with Global Foundries" - title is inaccurate - "for the 6th time" should be added after Foundries.

http://www.amd.com/us/press-releases/Pages/amd-amends-wafer-2012dec06.aspx

Does anyone actually believe they'll meet that $1.15B purchase commitment for 2013? If they do, it'll be write off city - when Kabini starts shipping, they'll have to heavily discount Trinity to move them even then, demand will drastically dry up.

 

[Vesku]

Really don't see why they could not have taken that one time charge as development wafers as Idontcare mentions. Seems R&D would have better tax benefits as well.