AMD Q2 '13 results above expectations.

[SiliconWars]

A second quote:
And they said it a second ago. It's the console business which will be responsible for the lower gross margins.

That means their margins on these custom SoCs is around <=20%.

Sontin...AMD has already said that they are getting paid "towards the top end of client APU" for the console SoC's. We know they are much bigger chips. Of course margins are going to go down.

What you're missing is that AMD is increasing revenue by 20%+ *simply on consoles*. While Nvidia is inviting ridicule with Shield as Tegra continues to capitulate, AMD is making another $200 million next quarter on console sales alone. What was Tegra break-even point again? $1 billion?

It is totally absurd to claim that Nvidia gave up on consoles because of lower margins. They can't even give Tegra 4 away at any profit.

 

[SiliconWars]

The CFO commentary mentioned a record quarter for professional graphics. This definitely increases ASP. Also reducing unit share by selling less small GPUs (due to APUs or Intel processor graphics) increases ASP.

Good point, I forget AMD kicked Nvidia out of the MacBook Pro.

 

[frozentundra123456]

Never Settle is not free for AMD, it surely costs millions. Besides, the bundled games are not exactly new (so people either already have the game(s) or they can get them much cheaper than before), and right now we have the Steam summer sale which further erodes the value of the bundle. How much market share did AMD gain due to the bundle? 1-2% if I'm not mistaken?

Dont want to go off topic, but is the never settled bundle still in effect? I always look at gpus in the microcenter flyer I get and the one that just arrived seemed to have done away with promoting any free games at all with AMD cards.

 

[sontin]

Pls, stop it. AMD said it in their CC. I will quote the statements tomorrow.

gross margins on these products are lower. Yes there are positive effects from the custom semi design (lower Opex, no marketing cost) but the fact is: Gross Margins are way down from the coperate average. So if you don't believe me i think you should start to believe AMD...

/edit: "Getting Paid" has nothing to do with Gross Margins.

 

[SiliconWars]

Pls, stop it. AMD said it in their CC. I will quote the statements tomorrow.

gross margins on these products are lower. Yes there are positive effects from the custom semi design (lower Opex, no marketing cost) but the fact is: Gross Margins are way down from the coperate average. So if you don't believe me i think you should start to believe AMD...

/edit: "Getting Paid" has nothing to do with Gross Margins.

Nobody said gross margins wouldn't go down? It's you who's been on this bizarre crusade suggesting that Nvidia didn't want the console wins because it would harm their gross margins. All the while Tegra dies a horrible ignominious death. Nvidia would sacrifice anything to be in AMD's console position with Tegra.

 

[sontin]

Sure right now it's easy to say that. Should i go to the other thread and find all the posting in which people denied this?

/edit: Because you mentioned Tegra: ASP of Tegra is around $25 with Gross Margins around 50%. So if we use $60 for a Xbox or PS4 SoC and using 20% Gross Margins then nVidia gets the same money from every Tegra SoC like AMD.

 

[SiliconWars]

Sure right now it's easy to say that. Should i go to the other thread and find all the posting in which people denied this?

If you want, sure. You can give yourself a pat on the back for being right about margins going down, but you'll still be dead wrong about believing Nvidia wouldn't give their left arm to be in AMD's position regarding consoles right now.

Nvidia *should* have done everything to get the consoles, because it would have been the making of Tegra and gaming on Android. When JHH is removed some time next year, his console failure will be the main reason.

 

[mrmt]

They shipped Kabini and Richland. So that will increase revenue for a short time. The question is what will happend after the first real shipments.

And there guidance is 22% +-3% up for Q3: Shipments for Sony and Microsoft.

Just to put things in perspective, the consoles that will save AMD, assuming a linear 10% decrease in sales and flat gross margin for all other AMD business units, will give the company some 1 billion in revenues per year but only 24%* gross margins. And this is year 0, when the price of the silicon will be higher. It doesn't get any better from here.

Sure, it isn't bad when you think that there will be practically 0 expenses from now on, but you can't fund a x86 business with this punny cash flow. This is less than AMD got with Brazos.


(If you assume that everything else will be flat and add the projected revenue increase and apply the forecast gross margin, the custom silicon will have a whopping 7% gross margins. As Haswell arrived in Q2 and Q3 it's not far fetched to project a 10% drop in everything else and take the 24% gross margin.

Alternatively, if you want to day dream with AMD custom silicon above 40% gross margin, other business units will have to take a drop of 20% in their gross profits)

 

[mrmt]

Nobody said gross margins wouldn't go down? It's you who's been on this bizarre crusade suggesting that Nvidia didn't want the console wins because it would harm their gross margins. All the while Tegra dies a horrible ignominious death. Nvidia would sacrifice anything to be in AMD's console position with Tegra.

Sontin is right here. This kind of margins is nowhere near what Intel and Nvidia are accustomed to work. AMD won the consoles by going very, very, very low with their margins.

 

[jpiniero]

Good point, I forget AMD kicked Nvidia out of the MacBook Pro.

Not sure what you are talking about. The current Macbook Pros use nVidia; the Haswell ones are Iris Pro. The only product Apple has which uses AMD is the upcoming Mac Pro.

What I want to know is why AMD hasn't killed off Big Core yet.

 

[SiliconWars]

Just to put things in perspective, the consoles that will save AMD, assuming a linear 10% decrease in sales and flat gross margin for all other AMD business units, will give the company some 1 billion in revenues per year but only 24%* gross margins. And this is year 0, when the price of the silicon will be higher. It doesn't get any better from here.

Oh it does get better. A lot of people mistakenly believe that console sales are highest on release, but they aren't.

As you can quite clearly see, console sales after 3 years are higher than release sales.

Sure, it isn't bad when you think that there will be practically 0 expenses from now on, but you can't fund a x86 business with this punny cash flow. This is less than AMD got with Brazos.

It's not that much less actually. Also, the consoles are a supplement not a replacement. AMD is still selling Jaguars in notebooks. Judging by the Q2 results it's doing quite well.

 

[SiliconWars]

Not sure what you are talking about. The current Macbook Pros use nVidia; the Haswell ones are Iris Pro. The only product Apple has which uses AMD is the upcoming Mac Pro.

What I want to know is why AMD hasn't killed off Big Core yet.

Sorry Mac Pro was what I meant obviously.

As for big cores, it's still bread and butter for AMD, same as it is for Intel.

 

[Sweepr]

Sorry Mac Pro was what I meant obviously.

As for big cores, it's still bread and butter for AMD, same as it is for Intel.

Care to explain why Kaveri is reportedly delayed and the absense of 3M/4M/6M/8M Steamroller-based products next year? Beema (little cores) and everything else seems on track.

 

[USER8000]

Blargle!

 

[SiliconWars]

Care to explain why Kaveri is reportedly delayed and the absense of 3M/4M/6M/8M Steamroller-based products next year? Beema (little cores) and everything else seems on track.

Sure, just after you explain why Broadwell is "delayed" by a year on desktop.

 

[USER8000]

Sure, just after you explain why Broadwell is "delayed" by a year on desktop.

Its not delayed - it is so advanced it actually went back in time so it could be released in 2008. However,the time machine broke so it ended up in 2015 and its not Intels fault as a result. Blasted work experience kid!!

 

[Arachnotronic]

Care to explain why Kaveri is reportedly delayed and the absense of 3M/4M/6M/8M Steamroller-based products next year? Beema (little cores) and everything else seems on track.

AMD has been cutting Opex significantly, and is targeting a $450M/quarter run rate, significantly below where it was when AMD was still trying to fight Intel.

 

[Sweepr]

Sure, just after you explain why Broadwell is "delayed" by a year on desktop.

Wrong again. Broadwell is coming to desktops in BGA form (along with its mobile cousins) and first Broadwell-based CPUs are coming H1/2014 to Ultrabook-style notebooks (<15W TDP). Broadwell might not even come to desktops in LGA form if thats what you're talking about, so its not delayed. @ Thread: Kaveri is reportedly delayed on both desktop/mobile variants.

 

[Arachnotronic]

Sure, just after you explain why Broadwell is "delayed" by a year on desktop.

It's not delayed at all; it's just not coming to LGA. Skylake LGA is coming in 1H 2015.

 

[SiliconWars]

It might have something to do with the fact that R&D has been cut in half Y/Y, lol.

Try not looking at the 6-month ended vs the quarter ended column, lol.

 

[SiliconWars]

It's not delayed at all; it's just not coming to LGA. Skylake LGA is coming in 1H 2015.

You just can't stop spreading FUD, can you?

:awe: Yet a digitimes rumour over a Kaveri "delay" is happily accepted as fact. GG.

 

[ruhtraeel]

I wonder how the FX 9590 will affect Q3/Q4 results.

 

[USER8000]

I wonder how the FX 9590 will affect Q3/Q4 results.

I think you and others should be more worried about the effed up world economy, and the trillions in debt governments have taken on board to make sure the whole pack of cards,won't fall down around us!! Decades of fun ahead!! :awe:

 

[SiliconWars]

I wonder how the FX 9590 will affect Q3/Q4 results.

Somewhere between zero and nothing at all I'd guess.

 

[lefty2]

I'm surprised that their CPU division was able to increase sales by $90 million from last quarter, given the state of the PC market. I thought that Kabini came in too late to effect this quarter (most design wins won't come in til next quarter). Also, OEMs waited 3 months before bring out any Richland laptops (and very few new models). Maybe they are declaring sales ahead of time, before the new design wins even are announced?