AMD Q1 2015 Earnings - 23 cents a share loss, to exit dense server (SeaMicro)

[mrmt]

As a dedicated PC Gamer (and sometimes console gamer), I will stop localized play when my hands are cold and I am dead.

There are some people here complaining about how desktop PCs went out of fashion, but the world has changed to mobile, people spend far more time on their mobile devices than they spend on PCs, console or TVs. Mobile gaming will be a consequence of this, no matter how cold your hands will become.

 

[mrmt]

" a good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors (as brand name) other than price"

Do you know that a custom, single source product like the console APUs are the antithesis of economic wide availability, right?

 

[seitur]

If AMD would not make it, would there be anyone who would want to take over it's GPU technology?

Who do you think would that be and what this tech/expertise would be used for?

 

[Phynaz]

Anyone else really worried about AMD's cash on hand?

Its now under a billion, only $906 million. They depleted $134 million during the quarter.

Even the banks are worried. BofA tightened their line of credit.

The Amended and Restated Loan Agreement contains covenants that place certain restrictions on the Loan Parties' ability to, among other things, allow two of the Company's subsidiaries that manufacture or process inventory for the Loan Parties to borrow secured debt or unsecured debt beyond a certain amount, amend or modify certain terms of any debt of $50 million or more or subordinated debt, create or suffer to exist any liens upon accounts or inventory, sell or transfer any of Loan Parties' accounts or inventory other than certain ordinary-course transfers, make certain changes to any Loan Party's name or form or state of organization without notifying the Agent, liquidate, dissolve, merge, amalgamate, combine or consolidate, or become a party to certain agreements restricting the Loan Parties' ability to incur or repay debt, grant liens, make distributions, or modify loan agreements. Further restrictions apply when certain payment conditions (the "Payment Conditions") are not satisfied with respect to specified transactions, events or payments.

 

[B-Riz]

There are some people here complaining about how desktop PCs went out of fashion, but the world has changed to mobile, people spend far more time on their mobile devices than they spend on PCs, console or TVs. Mobile gaming will be a consequence of this, no matter how cold your hands will become.

Mobile does not offer the same user experience that people buy consoles and gaming PC's for.

 

[frozentundra123456]

Wow, I thought all the console hype was behind us. PC gaming *plus* console gaming is still small potatoes compared to phones, tablets, laptops, desktops and servers. Even people that use consoles mostly consider them a "black box" and dont really care what chip is inside them.

And I dont buy that the consoles are going to generate all this good will for AMD. They have been in people's living rooms for more that a year now and what has happened to AMD's market share? The consoles are a low margin niche market that is probably all that is allowing AMD to survive, and that is all they are. Heaven help AMD if the next round of consoles goes ARM.

 

[B-Riz]

Do you know that a custom, single source product like the console APUs are the antithesis of economic wide availability, right?

And the product it goes in?

I can go to Target, or Wal-Mart, or Costco, or Amazon, or Newegg, or Gamestop and buy one, all across the lower 48 of the United States.

Just because a main component comes from a single source does not make it or the final product any less of a commodity.

We would not have PC's if the components were not commodities, and the value thereof comes from putting those individual components together.

 

[mrmt]

And the product it goes in?

I can go to Target, or Wal-Mart, or Costco, or Amazon, or Newegg, or Gamestop and buy one, all across the lower 48 of the United States.

Just because a main component comes from a single source does not make it or the final product any less of a commodity.

We would not have PC's if the components were not commodities, and the value thereof comes from putting those individual components together.

Get an introductory book on economics, otherwise this thread will go way off topic.

 

[B-Riz]

Wow, I thought all the console hype was behind us. PC gaming *plus* console gaming is still small potatoes compared to phones, tablets, laptops, desktops and servers. Even people that use consoles mostly consider them a "black box" and dont really care what chip is inside them.

And I dont buy that the consoles are going to generate all this good will for AMD. They have been in people's living rooms for more that a year now and what has happened to AMD's market share? The consoles are a low margin niche market that is probably all that is allowing AMD to survive, and that is all they are. Heaven help AMD if the next round of consoles goes ARM.

If you scale ARM to the same power and performance as an equivalent x86, that that is just re-inventing the wheel for no good reason.

http://research.cs.wisc.edu/vertical/papers/2013/isa-power-struggles-tr.pdf

"Key Finding 10: Regardless of ISA or energy-efficiency,
high-performance processors require more power than lower performance
processors. They follow well established cubic
power/performance trade-offs."

 

[B-Riz]

Get an introductory book on economics, otherwise this thread will go way off topic.

How are these mass produced components that, in the end, AMD makes to sell, not commodities?

Please enlighten us.

 

[Ajay]

SMT works better with wider cores because its able to use the resources left from the first thread. It also benefit when you have a stall of the first thread but that is not the only reason SMT was created. By making the core wider you increase single thread throughput but not every thread can utilize the entire execution units/resources of the core. By having a second thread (SMT) you use all the core resources left from the first thread. Thus SMT increases the utilization and efficiency of your Core throughput.

That's largely correct, but not what you said the first (I think you may have just worded it wrong). SMT may work better with wider cores, but there are hazards that come into play. Rather than take this too off topic, here is a useful summary by Anger Fog: http://agner.org/optimize/blog/read.php?i=6

 

[mrmt]

How are these mass produced components that, in the end, AMD makes to sell, not commodities?

Please enlighten us.

What that definition you pasted here meant with wide availability is not "having it available in every store in the market", this is achieving the balance between supply and demand in economic parlance. What it mean by wide availability is having the same good from multiple sources, to the point that acquiring it from one source or another doesn't make a difference.

Basically a commoditized product is a product that has no qualitative, or at least not significant qualitative differentiation between the multiple supply sources on the market.

Your gasoline is a commodity, you can't really say who provided the gas in the car you are using, neither you can figure out through performance characteristics which gasoline supplier supplied a given gasoline. Go to a Chevron gas station or an Exxon gas station and a couple of hours later you won't even bother to remember who you paid for the gas, and it won't make a difference after all. That's not something you can say of AMD console deal.

AMD isn't suppliying the console OEMs with a generic chip that can be replaced by one of Qualcomm or Intel or even one of the other AMD products, but a custom build chip that those companies can only get by buying from AMD. So it's not a commodity. If you want to further evolve on the subject PM me, this discussion doesn't belong here.

 

[MiddleOfTheRoad]

Was it Andrew Feldman, who AMD acquired along with SeaMicro, who shot his mouth off at the time of the AMD acquistion, saying that Intel had made a terrible mistake in not buying SeaMicro when they had the chance?

Was SeaMicro's IP terribly overrated, or did AMD just run out of money?

In my opinion, SeaMicro was always going to be a disaster. By AMD trying to sell servers in-house -- they were now suddenly competing with the same vendors who they were courting to use their CPU's for their respective server lines.

Just an absolute unmitigated disaster. Never become a competitor to the people you want as customers. That's the fastest way to tick them off. I think all of AMD executives failed their business courses on due diligence.

 

[imported_ats]

Like Intel is turning in to a Server company ??

That was a goal AMD made in 2011-12, to have 50% of the business from Semi-custom/Embedded in 2015.

What those graphs don't tell you: is the increase in growth market % a result of growth markets improving or traditional shrinking...

 

[Fjodor2001]

Wow, I thought all the console hype was behind us. PC gaming *plus* console gaming is still small potatoes compared to phones, tablets, laptops, desktops and servers.

Do you have the numbers to back that statement up? Sales volume, revenue and profit per category for example?

 

[mrmt]

Do you have the numbers to back that statement up? Sales volume, revenue and profit per category for example?

Just check Google Finance for Qualcomm and compare against AMD.

 

[B-Riz]

What that definition you pasted here meant with wide availability is not "having it available in every store in the market", this is achieving the balance between supply and demand in economic parlance. What it mean by wide availability is having the same good from multiple sources, to the point that acquiring it from one source or another doesn't make a difference.

Basically a commoditized product is a product that has no qualitative, or at least not significant qualitative differentiation between the multiple supply sources on the market.

Your gasoline is a commodity, you can't really say who provided the gas in the car you are using, neither you can figure out through performance characteristics which gasoline supplier supplied a given gasoline. Go to a Chevron gas station or an Exxon gas station and a couple of hours later you won't even bother to remember who you paid for the gas, and it won't make a difference after all. That's not something you can say of AMD console deal.

AMD isn't suppliying the console OEMs with a generic chip that can be replaced by one of Qualcomm or Intel or even one of the other AMD products, but a custom build chip that those companies can only get by buying from AMD. So it's not a commodity. If you want to further evolve on the subject PM me, this discussion doesn't belong here.

I am referring to commodity computing that x86 directly helped facilitate and which we have been enjoying for years, not commodities such as raw materials.

http://en.wikipedia.org/wiki/Commodity_computing

And the console is a commodity "PC lite" device, the brands aren't even that important this round.

The wide availability of the consoles is what makes the AMD CPU / GPU have a slim profit margin per chip, but gets made up for by producing very many of them.

 

[B-Riz]

Qualcomm operates in a different sector, how are they relevant?

Of course they are making money hand over fist, they are tied to cell phone companies, which, for the most part, over charge for mediocre service.

 

[MiddleOfTheRoad]

Qualcomm operates in a different sector, how are they relevant?

Of course they are making money hand over fist, they are tied to cell phone companies, which, for the most part, over charge for mediocre service.

Qualcomm may be in a different sector -- but they also focus on Semi Custom design (which is probably AMD's best hope for the future).

....And Qualcomm is scrambling to hire more people in Austin for their Semi-Custom Design team (BTW, for AMD's out of work engineers)
http://qualcomm.jobs/austin-tx/cpu-...stin-tx/421669F8EFD445F2BC2CDB01D7F6DFCF/job/

Business is booming for Qualcomm -- Semi Custom is a good strategy if the company has a good management team.

 

[B-Riz]

Qualcomm may be in a different sector -- but they also focus on Semi Custom design (which is probably AMD's best hope for the future).

....And Qualcomm is scrambling to hire more people in Austin for their Semi-Custom Design team (BTW, for AMD's out of work engineers)
http://qualcomm.jobs/austin-tx/cpu-...stin-tx/421669F8EFD445F2BC2CDB01D7F6DFCF/job/

Business is booming for Qualcomm -- Semi Custom is a good strategy if the company has a good management team.

Qualcomm with all its mobile stuff and patent revenue seems like the opposite end of actually competing (wanting to bother competing) with AMD; as AMD is known for x86 and GPU's.

I guess the question is, what semi custom is Qualcomm designing that is not mobile related? Cause if they are wanting to enter PC type stuff, Intel is too entrenched, AMD holds down budget offerings and ARM works well for things that run Linux / Chrome OS and are very low priced.

To me, the AMD semi-custom means an x86 core(s) and some kind of GPU with the HSA stuffs.

 

[Arachnotronic]

Qualcomm may be in a different sector -- but they also focus on Semi Custom design (which is probably AMD's best hope for the future).

....And Qualcomm is scrambling to hire more people in Austin for their Semi-Custom Design team (BTW, for AMD's out of work engineers)
http://qualcomm.jobs/austin-tx/cpu-...stin-tx/421669F8EFD445F2BC2CDB01D7F6DFCF/job/

Business is booming for Qualcomm -- Semi Custom is a good strategy if the company has a good management team.

So if Qualcomm does semi-custom jobs, and if Intel does semi-custom jobs, isn't that bad for AMD as there is more competition for contracts?

 

[Phynaz]

Qualcomm may be in a different sector -- but they also focus on Semi Custom design (which is probably AMD's best hope for the future).

....And Qualcomm is scrambling to hire more people in Austin for their Semi-Custom Design team (BTW, for AMD's out of work engineers)
http://qualcomm.jobs/austin-tx/cpu-...stin-tx/421669F8EFD445F2BC2CDB01D7F6DFCF/job/

Business is booming for Qualcomm -- Semi Custom is a good strategy if the company breaks antitrust laws.

Ftfy :awe:

 

[Idontcare]

Was it Andrew Feldman, who AMD acquired along with SeaMicro, who shot his mouth off at the time of the AMD acquistion, saying that Intel had made a terrible mistake in not buying SeaMicro when they had the chance?

Was SeaMicro's IP terribly overrated, or did AMD just run out of money?

That turned out to be a bit of a (literally) "he said, she said" situation.

http://www.wired.com/2012/03/amd-seamicro-intel/

Seamicro did ask Intel, but not officially. The feelers were sent out to see if there was interest, which there was not. But Intel's quoted statement definitely betrayed a bit of sour grapes sentiment on their part, which was odd because it invoked an element of emotion in the decision to make the statement in the first place.

In any event, history is history.

Fortunately for AMD they are risk takers who continue to think outside the box while looking for ways to diversify. If their culture was one of risk-aversion then I doubt they'd fare better than Via.

 

[frozentundra123456]

So what "risky" venture has AMD undertaken lately that has worked out for them?

 

[monstercameron]

So what "risky" venture has AMD undertaken lately that has worked out for them?

ati?