AMD Q2 '13 results above expectations.

[SiliconWars]

And how is their new business modell working if there are no new customers? Who will fund all the money for future products and IP?

What people seem to be missing here is that AMD already has the products and IP. They are just getting paid to do custom designs. Jaguar already existed as did GCN, AMD got MS and Sony to pay development costs on what they already had.

They cut their R&D down to $300 million per quarter. This is the same like nVidia spends on R&D. And nVidia has no $840 million x86 market.

Nvidia needs to spend 5x more on graphics R&D to stay competitive with AMD, that's why.

 

[tential]

What people seem to be missing here is that AMD already has the products and IP. They are just getting paid to do custom designs. Jaguar already existed as did GCN, AMD got MS and Sony to pay development costs on what they already had.

Nvidia needs to spend 5x more on graphics R&D to stay competitive with AMD, that's why.

Sounds VERY fanboyish to me...

 

[USER8000]

So you can't run the numbers and get an estimate?

If you are such an expert running numbers,then why are you on a forum then??

You would be busy doing your job(if its your job) and not wasting time talking to people on a tech forum. At least that is my experience of people who have worked in the area. They are busy making money,and not talking about making money and you pay for their services. Knowledge is money. Time is money.

Unless of course you are an amateur analyst,then I suppose that is different,then you try to boast of your knowledge ON THE INTERNET.

Riiiiiiiiight!


Knock it off with the ad hominem personal attack. Only warning. Next time I see this type of post the poster will be getting a vacation.

Administrator Idontcare

 

[SiliconWars]

Sounds VERY fanboyish to me...

Based on the relative income of AMD's CPU and GPU divisions it won't be far off. Maybe 3x or 4x, I didn't exactly run it through a spreadsheet or anything.

 

[mrmt]

If you are such an expert running numbers,then why are you on a forum then??

You would be busy doing your job(if its your job) and not wasting time talking to people on a tech forum. At least that is my experience of people who have worked in the area. They are busy making money,and not talking about making money and you pay for their services. Knowledge is money.

FYI I don't work as a financial analyst anymore. I used to work on the financial markets until 2011. I moved to the O&G industry on that year, and I'm not working in the financial department here.

And FWIW what I showed here requires nothing but the very basic understanding of financials. Even a graduate student could follow the math and understand/question the underlying assumptions of what I posted here. The fact that you can't tells much more about you and your skills with financials than whatever inference you are trying to do here about my professional skills.

Maybe you should talk to the guys you know to learn a thing or two from them and double check whether I'm talking BS or not.

 

[AnandThenMan]

Console is saving their existence, were they prescient or lucky?

Both, but much more of the former. One does not simply luck their way into being able to offer the ideal silicon to Sony and Microsoft. The "lucky" part factors in due to Sony/MS wanting to go x86 because of the dev tools, familiarity with the architecture etcetera. Honestly has their ever been a more natural partnership for console hardware?

Nvidia needs to spend 5x more on graphics R&D to stay competitive with AMD, that's why.

Based on the relative income of AMD's CPU and GPU divisions it won't be far off. Maybe 3x or 4x, I didn't exactly run it through a spreadsheet or anything.

Even if it's 2x (doubt it) that is still an incredible difference. I'd hate to know what the relative difference is between Intel and AMD.

 

[SiliconWars]

FYI I don't work as a financial analyst anymore. I used to work on the financial markets until 2011. I moved to the O&G industry on that year, and I'm not working in the financial department here.

And FWIW what I showed here requires nothing but the very basic understanding of financials. Even a graduate student could follow the math and understand/question the underlying assumptions of what I posted here. The fact that you can't tells much more about you and your skills with financials than whatever inference you are trying to do here about my professional skills.

Maybe you should talk to the guys you know to learn a thing or two from them and double check whether I'm talking BS or not.

The problem, mrmt, is that you're not exactly the most reliable/unbiased of sources around are you? You frequently just make negative stuff up about AMD, like here - http://forums.anandtech.com/showpost.php?p=35268118&postcount=32

Stuff that has no basis in reality. Ditto with Globalfoundries here - http://forums.anandtech.com/showpost.php?p=35198179&postcount=130

I wouldn't take your advice on AMD/GF or Intel...or to be frank any tech stock, because whatever facts you know are likely to be tainted with bias. You know that you need to leave that stuff behind when giving financial advice.

 

[mrmt]

The problem, mrmt, is that you're not exactly the most reliable/unbiased of sources around are you? You frequently just make negative stuff up about AMD, like here - http://forums.anandtech.com/showpost.php?p=35268118&postcount=32

Funny you talk about reliability/bias quoting a post where you misread JRP data. This is what you said:

In Q4 2011 (launch quarter of the 7970), AMD gained market share on Nvidia -

http://jonpeddie.com/press-releases/...reased-8.9-ov/

In Q1 2012, AMD's discrete desktop shipments were up by 4% -

But this is what JPR said about Q4:

AMD had huge 44.8% desktop double digit growth in its HPU shipments, and even good growth in their desktop IGPs. However, like Intel, its overall quarter results were down due to declining notebook sales. AMD’s overall quarter to quarter results showed a -3.4% drop.

And this is what they said in Q1:

AMD's overall graphics market share increased 0.3% from last quarter due mostly to APU shipments. The company had a 4% increase in shipments of discrete GPUs over last quarter, and an 8% gain in notebook discrete GPUs.

Just look at the difference. In Q4 they credit AMD share to APU and IGP sales, and in Q1 JRP mentions an overall increase in dGPU market share of 4% and a bigger gain in dGPU notebook market share of 8%. If anything AMD could not leverage their 7000 series and grow in the desktop. The growth came from the APU/IGP in Q4 and dGPU for notebooks in Q1.

 

[SiliconWars]

Funny you talk about reliability/bias quoting a post where you misread JRP data. This is what you said:




But this is what JPR said about Q4:



And this is what they said in Q1:



Just look at the difference. In Q4 they credit AMD share to APU and IGP sales, and in Q1 JRP mentions an overall increase in dGPU market share of 4% and a bigger gain in dGPU notebook market share of 8%. If anything AMD could not leverage their 7000 series and grow in the desktop. The growth came from the APU/IGP in Q4 and dGPU for notebooks in Q1.

AMD gained market share in discrete desktop gpu while the 7970 was being launched, up till the tail end of last year. That's a (very) far cry from your theory that they couldn't charge more than the competing Nvidia cards.

http://seekingalpha.com/article/512...-2012-results-earnings-call-transcript?page=2

In Graphics, solid demand for our next-generation AMD Radeon 7000 graphic cards, particularly in the channel, grew sequential GPU revenue increases.

Just face it, your theory has absolutely zero basis in reality.

 

[sontin]

They gained share because nVidia was supply constraint. This year they're losing share because nVidia has enough supply.

No magic. Every time the same thing.

 

[mrmt]

AMD gained market share in discrete desktop gpu while the 7970 was being launched, up till the tail end of last year. That's a (very) far cry from your theory that they couldn't charge more than the competing Nvidia cards.

Increased revenue =! increased market share.

 

[wlee15]

No, that is not true. Gross Margins on these consoles SoC are lower than for their other products.

Yes they are charging more but in the end they have less money to spend.

That's essentially what I said. If the Xbox One SOC has gross margins of say 20% and let's say AMD charges $100 per chip that's the sales part, and because gross margins are 20% gross profit per chip is $20 while cost of goods sold is $80. It's a high cost product with a high selling price and despite a low gross margin a relatively decent gross profit per unit relative to their other products. Furthermore the console products were one off engineering expenses that were partially funded by Microsoft and Sony there won't be much in any R&D expenses going on (probably only die shrinks), and no marketing expense.

So to sum it up the console products.

Low gross margin, decent gross profit
Essentially no operating expense going ahead
Operating expenses incurred were partially funded by customers

 

[SiliconWars]

They gained share because nVidia was supply constraint. This year they're losing share because nVidia has enough supply.

No magic. Every time the same thing.

Nvidia wasn't supply constrained in Q1 when they were still on 40nm GPU's. I believe that's the point that mrmt is trying to make - that the 7970 couldn't compete with the old 580 because it was priced higher.

 

[sontin]

Nvidia wasn't supply constrained in Q1 when they were still on 40nm GPU's. I believe that's the point that mrmt is trying to make - that the 7970 couldn't compete with the old 580 because it was priced higher.

They were supply constraint. Their revenue dropped hard in FQ1 2013.

 

[SiliconWars]

That's essentially what I said. If the Xbox One SOC has gross margins of say 20% and let's say AMD charges $100 per chip that's the sales part, and because gross margins are 20% gross profit per chip is $20 while cost of goods sold is $80. It's a high cost product with a high selling price and despite a low gross margin a relatively decent gross profit per unit relative to their other products. Furthermore the console products were one off engineering expenses that were partially funded by Microsoft and Sony there won't be much in any R&D expenses going on (probably only die shrinks), and no marketing expense.

So to sum it up the console products.

Low gross margin, decent gross profit
Essentially no operating expense going ahead
Operating expenses incurred were partially funded by customers

It's quite possible that margins will actually improve as the years go by. Obviously these are very big chips on 28nm but they won't be on 20nm.

 

[SiliconWars]

They were supply constraint. Their revenue dropped hard in FQ1 2013.

They were having yield problems yes, but that doesn't change the fact that the 7970 was selling quite fine.

http://seekingalpha.com/article/512...arnings-call-transcript?page=4&p=qanda&l=last

As you heard from Rory, we met all of our customer commitments in the first quarter. When demand is strong and your product is good, this opens up opportunity for upside. And that is an area where we would like to see more velocity, to be very honest, and that's why we have to monitor the situation very carefully. We meet commitments, we are limited on upside, and that is not a good situation when your product is good and demand is strong.

AMD were basically being "constrained" as well but that isn't the point here - the point is that demand was good and AMD were clearly selling what they could, and could have sold more (possibly at lower prices of course) if enough supply had been available.

 

[pablo87]

Both, but much more of the former. One does not simply luck their way into being able to offer the ideal silicon to Sony and Microsoft. The "lucky" part factors in due to Sony/MS wanting to go x86 because of the dev tools, familiarity with the architecture etcetera. Honestly has their ever been a more natural partnership for console hardware?


Even if it's 2x (doubt it) that is still an incredible difference. I'd hate to know what the relative difference is between Intel and AMD.

The irony is, after so many years of chasing Intel with me too offerings vowing to "fight until the last dog is dead", their biggest success is where Intel doesn't compete.

I should add, the game bundling in dGPU is another brilliant move. Its great integrated (no pun intended) value, costs AMD virtually no resources internally, and the royalty fee just gets added to the BOM with no negative impact on profit per card (eventually). Another win where they aren't following.

 

[sontin]

They were having yield problems yes, but that doesn't change the fact that the 7970 was selling quite fine.

http://seekingalpha.com/article/512...arnings-call-transcript?page=4&p=qanda&l=last

Sure it does change everything. AMD sells more when nVidia is supply constraint because both are playing on a equal field.
They're selling less when nVidia can produce as many chips as they want.
So the 7970 sold fine until nVidia got more wafers. Then AMD dropped the price and put more than 10 free games over 6 months with every card to sell them.
And you see it very clear in both numbers: Last Q1 was up for nVidia and down for AMD Y-Y.

AMD were basically being "constrained" as well but that isn't the point here - the point is that demand was good and AMD were clearly selling what they could, and could have sold more (possibly at lower prices of course) if enough supply had been available.

AMD never stated that they had problems. Read the transcripts from last year.

 

[SiliconWars]

Sure it does change everything. AMD sells more when nVidia is supply constraint because both are playing on a equal field.
They're selling less when nVidia can produce as many chips as they want.
So the 7970 sold fine until nVidia got more wafers. Then AMD dropped the price and put more than 10 free games over 6 months with every card to sell them.

You're missing the point completely. Mrmt was suggesting that the 7970 wasn't selling because it was higher priced than the 580.

And you see it very clear in both numbers: Last Q1 was up for nVidia and down for AMD Y-Y.

Nvidia's cards were much newer. However, AMD was still up in discrete desktop GPU in Q1, even though they haven't released anything of note in over a year. Most of AMD's graphics loss has been on mobile which has cratered.

AMD never stated that they had problems. Read the transcripts from last year.

They said that they were monitoring it and that they could have an "upside" had more supply been available. They weren't having problems as such, but they weren't getting the most out of it either.

 

[SiliconWars]

I should add, the game bundling in dGPU is another brilliant move. Its great integrated (no pun intended) value, costs AMD virtually no resources internally, and the royalty fee just gets added to the BOM with no negative impact on profit per card (eventually). Another win where they aren't following.

Mindshare increases by a lot and prices stay pretty consistent. If AMD has ever had a graphics quarter like last, with such old tech, I'll eat my hat.

The 7850 is still ~$160 16 months after release and obviously still selling. The 6850 was selling for $125 with 2 free games 9 months after release - http://techreport.com/news/21341/deal-of-the-week-a-6850-and-two-games-for-125

The 7850 also has a 20% smaller die and originally sold for far more than the 6850 ever did. It has more competition from Kepler than Barts ever had as well. Something is clearly making it a nice buy, and for me it's the gaming bundle. At these numbers it almost doesn't matter how much AMD is "losing" from game bundle payments - they'd be losing a lot more with their old strategy of reducing prices again and again.

 

[sontin]

Sure they sold 7970 cards. How many? Nobody knows.
nVidia had problems because they can not introduce new chips on a new process when there is not enough supply. OEMs and AIBs would start to reduce orders and wait for the new chips. That was the reason why AMD won market share. nVidia shipped less chips.

And AMD was up in Q1 because they pumping so much money into their cards: 4 free games and lower prices. nVidia could easily go after market share. But it makes no sense. Going higher than 66% is nearly impossible.

And you can see it in their numbers for Q1: nVidia's GPU business is up, AMD's GPU business is down. This tells the whole story.

 

[SiliconWars]

Sure they sold 7970 cards. How many? Nobody knows.
nVidia had problems because they can not introduce new chips on a new process when there is not enough supply. OEMs and AIBs would start to reduce orders and wait for the new chips. That was the reason why AMD won market share. nVidia shipped less chips.

And AMD was up in Q1 because they pumping so much money into their cards: 4 free games and lower prices. nVidia could easily go after market share. But it makes no sense. Going higher than 66% is nearly impossible.

And you can see it in their numbers for Q1: nVidia's GPU business is up, AMD's GPU business is down. This tells the whole story.

Nvidia adding more and more AAA games to their cards and TWIMTBP tells the whole story tbh. Why are the doing that if they were having such a great time without the extra expense?

As I mentioned already, AMD seems confident that they have increased GPU market share in Q2. If that is the case then why is that happening when they have old cards vs all of Nvidia's "new"? Game bundles clearly work, for both companies.

 

[rgallant]

Sure they sold 7970 cards. How many? Nobody knows.
nVidia had problems because they can not introduce new chips on a new process when there is not enough supply. OEMs and AIBs would start to reduce orders and wait for the new chips. That was the reason why AMD won market share. nVidia shipped less chips.

And AMD was up in Q1 because they pumping so much money into their cards: 4 free games and lower prices. nVidia could easily go after market share. But it makes no sense. Going higher than 66% is nearly impossible.

And you can see it in their numbers for Q1: nVidia's GPU business is up, AMD's GPU business is down. This tells the whole story.

2012-2013 amd gpu sales had nothing to do with threads about them going bankrupt or cf being stutter fest right
http://forums.anandtech.com/showthread.php?t=2319148&highlight=amd+goes+bankrupt
-maybe with the console wins , good mind share could bring a more even buying decisions based on hardware.
[I only buy nv so no amd fan boy here] but nv fanboys make sure any neg. press about amd gpu's get top billing on the net.

 

[VirtualLarry]

About those game bundles... do the publishers get payment from AMD for every copy shipped, or just a large lump sum, and AMD gets to ship as many as they can within the allowed bundle contract period?

I think the game bundles are a great marketing move by AMD.

 

[f1sherman]

About those game bundles... do the publishers get payment from AMD for every copy shipped, or just a large lump sum, and AMD gets to ship as many as they can within the allowed bundle contract period?

I think the game bundles are a great marketing move by AMD.

Well it helped them do the unthinkable.

Have record GPU sales with richer mix to boot, AND STILL not make a penny.

Growing inventory? I wish. But looking at their incoming game bundle it looks like they are giving up on throwing in AAA games like there's no tomorrow.