AMD Q3 results: even worse than revised expectations

[ViRGE]

Yeah, but can you see any company out there actually buying AMD's graphics division (ATI)? I don't, unless it's a steal.

I could seriously see Apple and Qualcomm going after it. Apple already does their own CPU design, so having their own GPU would make them even more insular. Meanwhile Qualcomm has slowly been picking up ATI staffers since the Snapdragon acquisition and subsequent firings over at ATI.

 

[SirPauly]

Yeah, but can you see any company out there actually buying AMD's graphics division (ATI)? I don't, unless it's a steal.

How could AMD weather this storm without their graphic business and the APU?

Will see what kind of leader Rory Read is. Amd is certainly a threat and still innovative to me.

 

[NIGELG]

How could AMD weather this storm without their graphic business and the APU?

Will see what kind of leader Rory Read is. Amd is certainly a threat and still innovative to me.

AMD will also suck at managing ATi and will surely take them down unless there are new management ideas and capital injected into AMD.

AMD has been horrible at making good decisions....Bulldozer,Snapdragon,Killing ATi brand name....etc,etc.

It needs new blood.

 

[AnandThenMan]

AMD has been horrible at making good decisions....

Not really. As I've stated before, AMD does more with the funds they have than any of their competitors, by far. The problem is they are unable to compete with Intel, end of. It is not more complicated, but AMD is not alone, no one has been able to compete with Intel and come out on top.

Unless AMD executes perfectly and never falters, they have a chance against Intel. But no company can do that, one misstep has a snowball effect.

 

[f1sherman]

Is the GPU division of AMD profitable?

It has been, rather better on a proportional basis then the CPU division since AMD acquired them.

They mainly tend to swing around 0 with a little profit in the overall picture. Something completely unacceptable when compared to nVidia. And even worse compared to the purchase cost.

Operating income for AMD Graphics(Computing) Division
(millions of dollars)

---------Q1-------Q2------Q3-----Q4--------
2006 $5.4B ATI aquisition-> October 25th -33(73)
2007 -35(-321) -50(-258) -3(-112) -12(21)
2008 -11(-160) -38(-9) 47(143) -10(-431)
2009 0(-36) -12(-72) 8(76) 53(158)
2010 47(146) 33(128) 1(164) 68(91)
2011 19(100) -7(142) 12(149) 27(165)
2012 34(124) 31(82)

------------------------------------------------------------
Total:
Graphics $169M
Computing $360M

Net income during the same period: -$5.810B
Nvidia: $1.875B

 

[ocre]

Ocre's post was more rambling and musing than anything. He didn't say anything about Northern Islands consuming too much power and he didn't say anything about Steam. He made comments about their out-of-the gate pricing (which was bad), he made comments about Nvidia waiting to what Nvidia had, and he made comments about 40nm inventory levels.

I don't really see the correlation at all with how you indirectly responded. And honestly, you have linked that market share report several times, but you always conveniently leave out that Nvidia's consumer division made more money than it's previous quarter despite losing market share. Market share is great and all until it's realized that gobbling up more market share isn't translating into making more money.

Honestly, i am simply blown away by the stuff he pulls. I dont think he can really grasp concepts in their entirety and often goes off the deep end in strange directions. In this case he pulled out a few sentences and everything else went over his head.

It's like no matter how many times I repeat it, it goes from one ear and leaves the other. AMD said Revenue fell 10% for the entire firm. You realize Desktop Discrete GPUs are just 8% of the entire firm?

Correlating AMD's stock price falling 50-60% in the last 6 months, AMD having $100 million writedown as being related to desktop discrete GPUs, it's financially impossible. Why can't you connect the dots and see that AMD's failure largely relates to 90% of other products such as Llano, Bulldozer, Opteron CPUs, losing designs wins to Kepler in the mobile space, etc.?

Not to mention we know AMD's discrete GPU division gained market share last quarter. If you gained market share that means your inventory was selling, not sitting idle. That's another sign that it's not desktop graphics that's the problem here.

Why is it you continue to ignore 92% of the company and continue to put the blame on how AMD is doing by focusing on desktop graphics products when the math simply does not add up?

You realize if AMD HD7000 series made 50% less money than HD6000 series on the desktop, that would drop the stock price just 4% and if the entire desktop discrete GPU line was discontinued, the stock would fall 8%?

The best part is AMD's "Computing Solutions" Group has nothing to do with its GPU department. Where did AMD say the main weakness came from? Their Computing Solutions unit.

"...which contributed to lower than anticipated average selling prices (ASPs) for the company’s computing solutions group products and lower than expected utilization of its back-end manufacturing facilities"

There is no mention at all about inventory issues for desktop GPUs, or declining ASPs for graphics cards.

Your entire Post #30 has not an ounce of truth in it about what's really happening at AMD.

Here is the most shocking part - what you keep saying is contrary to facts.

"Meanwhile on the GPU side of things this was the first quarter where AMD’s new Southern Islands GPUs were shipping, which is both good news and bad news for AMD. Traditionally quarters where major new GPU architectures are introduced see lower revenue as customers hold off on purchases, and with the launch of Southern Islands early in the year this was no exception. However new GPUs also launch at higher prices, which pushes margins up. The net result is that while revenue takes a step back profits increase, which is exactly what AMD needs at the moment. Altogether AMD booked 2M of GPU revenue in Q1’12 with an operating income of M, versus 413M in revenue with an operating income of only M in Q1’11. The increase in operating income over Q1’11 is thanks in large part to AMD’s nearly quarter-long 28nm product lead, combined with AMD’s conservative pricing." ~ Source

As I said before, the first mover advantage strategy with high prices lowered AMD's GPU revenue but made them more $ than in the past. This is exactly why they did it. So again, you can keep putting the blame all you want on HD7000 desktop discrete GPUs but real worlds facts from market share to profits for that unit contradict your opinion. Ironically, it is AMD's desktop GPUs that have been doing OK, not the claims you keep making that HD7000 series was poorly executed by AMD.

It appears 90% of AMD's problems stem somewhere else then. You can either face the facts, or continue to ignore them, putting the blame on HD7000 desktop cards.

wow. where to start????
"how many times I repeat it" what????
this is the first time you ever said this to me. I am like, what???

But anyhow, i am posting to inform you that you have completely lost sight and arent understanding at all what i have said. My post was just to invoke thought. The specific subject manner was the very short sighted view about nvidia being late with their full 28nm lineup and such. When much of their lineup consist of chips they were already using for higher end models, it would be smart to assume that perhaps there could be more to it. I would love for you to stop trying to fight for once and actually stop to have real discussions that are of a little deeper substance.

Anyway, the post was more food for thought as to why nvidia would hold off launching chips they already had. To clear out inventory was brought into my discussion and i brought in AMD as an example to try to relate the concept to bring forth understanding.

I was in no way blaming the 7000 series on AMDs misfortune. But even you should be able to see that nvidia and AMD have done things differently and have very different outcomes. My post was just to provoke thought but since you want to get specific then lets talk on some of your key points.

First off you say " it's financially impossible" that AMD's GPU division is only 8%. Your implying their GPU division could do nothing and couldnt effect their profits? What?? What your using as proof doest make any sense at all. Your concept here is completely unacceptable and false. Why? well....... if AMD made 100million more in the graphics division for Q2 then they wouldve reported 130+million for the Quarter. This wouldve been an out of this world quarter for AMD. Every extra dime made by their GPU division is a dime for the whole AMD. ITs the whole AMD, and your prentending they dont go together. Their profits are a collection of the entire AMD performance. The better their GPU division does, the better AMD does. Its that simple.

So then there is your qoute from nextgenreview. Well this id from Q1 and doesnt apply to Q3. Your actually proving what i already said. it completely complements what i have said here:

"As far as AMD. I think they expected nvidia not to be able to compete and tried to capitalize on this. They dropped their 28nm line-up early to try to take advantage of what they thought would be a great opportunity. Having many older generation cards in the pipeline didnt matter too them because they planned to offset this with their premium."

So when your link for Q1 says this, "The net result is that while revenue takes a step back profits increase" they go together. All this is true for Q1. Which is when AMD decided to drop the 79XX series and didnt expect nvidia to be able to counter.

Now fast forward to the Q3. AMD has had to lower prices to very very low and ultra competitive prices. Across their 28nm lineup. Ask yourself this, if AMD was able to get 50% more out of their GPUs, would that help AMD profits? Of course it would, if you cant see it than i worry about you. If AMD could sell their GPUs for a higher markup they would in a heartbeat. It would benifit AMD tremendously if they could get more out of their GPUs. Their gross margin would average higher if AMD could get more out of their GPUs. But all this is besides my point.

Thought i would point out some of the things you got completely wrong.
But really man, i am not here to argue with you. Not at all. So when you said this:

"Your entire Post #30 has not an ounce of truth in it about what's really happening at AMD."

I wasnt writing about the truth of what happened to AMD. I was offering a line of thinking and it was specifically related to the Nvidia being late comments we keep hearing over and over. I was just offering a larger picture and using AMD as an example to this. You may not understand this but i meant no harm to AMD (or you) in anyway.

i hope you can grasp this because i am not here to argue. Just offering a different point of view and trying to contribute to the larger picture of how and why things may be as they are. Its just for deeper thought on the underlinings which we often dont discuss.

 

[OCGuy]

Not really. As I've stated before, AMD does more with the funds they have than any of their competitors, by far. The problem is they are unable to compete with Intel, end of. It is not more complicated, but AMD is not alone, no one has been able to compete with Intel and come out on top.

Unless AMD executes perfectly and never falters, they have a chance against Intel. But no company can do that, one misstep has a snowball effect.

Maybe they can't compete funds wise because they can't put out a good enough product or market a good product well enough?

If they can't, it is time to go. That is the free market. The AMD fanbois giving them charity by buying their inferior CPUs are actually hurting the cause.

If AMD can't hack it with x86, we need someone to swoop in who can.

Let AMD go bankrupt and auction off their IP. Maybe someone who is cash-rich can come in an catch up with Intel in 5-7 years.

 

[AnandThenMan]

If AMD can't hack it with x86, we need someone to swoop in who can.

Really, like who? The x86 license is not transferable.

 

[3DVagabond]

They are selling what would have been a $300 for $500. Releasing a bigger and faster chip would cost them more money and they would not be able to get a whole lot more for it. Instead they use that chip in the pro market where they can get thousands for it.

To sum up a smaller chip = greater profit.

That chip wasn't ready to ship, even in the small numbers for the super computer market, until last month. They don't even have enough of them to fill the one order. How would they have sold it in the consumer space? It wasn't a voluntary decision. They had no product to sell.

 

[f1sherman]

http://forum.beyond3d.com/showthread.php?t=41627&page=88

 

[ShintaiDK]

Really, like who? The x86 license is not transferable.

Other companies got x86 licenses. And x86 aint protected anymore either. The problem is technologies like SSE, x64, AVX etc. Not to mention all the IPs for designs.

Why dont other compete there? They dont want to waste money, thats why.

 

[railven]

Seems it's all over the Intranets, when is the axe day? Oct 26th?

Woof, AMD is DOOOOMMEEDDD!!! :twisted:

But seriously, I just found out from the CPU sub-section, Hando based Tablets are the way of the future

 

[Keysplayr]

n/m

 

[Siberian]

That chip wasn't ready to ship, even in the small numbers for the super computer market, until last month. They don't even have enough of them to fill the one order. How would they have sold it in the consumer space? It wasn't a voluntary decision. They had no product to sell.

They always bring their pro cards out later. They would have launched their high end chip if AmD had not layed an egg.

 

[NIGELG]

They always bring their pro cards out later. They would have launched their high end chip if AmD had not layed an egg.

Proof of this from Nvidia or else you are talking garbage.

 

[Keysplayr]

Proof of this from Nvidia or else you are talking garbage.

He cant prove it, you can't disprove it. Where does that leave your conversation?

 

[Jaydip]

Proof of this from Nvidia or else you are talking garbage.

They always bring their pro lineup later

 

[NIGELG]

He cant prove it, you can't disprove it. Where does that leave your conversation?

Maybe an Nvidia insider like yourself can prove it?

I can easily say Nvidia contains a bunch of jackasses.I can't prove it,you can't disprove it.Where does that leave our conversation?

Outlandish statements should have a proof or a source if one is going to spout them as facts.

 

[NIGELG]

They always bring their pro lineup later

I'm am not talking about that part of his statement.

 

[Keysplayr]

Maybe an Nvidia insider like yourself can prove it?

I can easily say Nvidia contains a bunch of jackasses.I can't prove it,you can't disprove it.Where does that leave our conversation?

Outlandish statements should have a proof or a source if one is going to spout them as facts.

Not really sure what you're looking for. Really.

 

[Final8ty]

He cant prove it, you can't disprove it. Where does that leave your conversation?

The burden of proof first comes from the claim of existence/intention.

No one would say something did not exists or was not true unless it was claimed to be so first.
No one could ever say god does not exist if it was not for the fact that it was said he does first.

Claims of existence can come out of thin air, Claims of non-existence can also come out of thin air but the claims of non-existence is impossible unless the claims of existence is there first.

Cant or wont give proof then people don't have to accept it as fact.
In the context of what was said the same tool that is meant to prove it is the same one that will disprove it, if there is no links to back it up then there is no need for links to disproof and counter, but that does not mean the disproof and counter can not be used if feasible if the person wants to do the legwork but why should that person when the person making the claim in the first place can not be bothered or cant.

 

[KingFatty]

I think it's even more basic than that, it doesn't matter about existence/intention, but just a matter of making a claim.

If you claim something, the burden is on you to support your claim.

Generally, when you claim something that is so basic and obvious, we all excuse the need for support. If I claim the sun will rise tomorrow, we all just accept that without needing proof. But it's still a claim.

So I guess when people make a claim that is different than what most people would expect, then most people would be more likely to expect support for that claim.

Also, I think there is an effect where people get familiar with earlier posts. I think it's a common thread around here that NVidia and AMD will compete against each other and time the release of their cards based on what each other is doing, and adjust pricing etc. with those market effects in mind. So, a person familiar with that may make a claim that relies on that support, without specifically mentioning that support. That's bad form, even if most readers already know the support, it's still an unsupported claim unless you mention that support.

 

[Final8ty]

I think it's even more basic than that, it doesn't matter about existence/intention, but just a matter of making a claim.

If you claim something, the burden is on you to support your claim.

Generally, when you claim something that is so basic and obvious, we all excuse the need for support. If I claim the sun will rise tomorrow, we all just accept that without needing proof. But it's still a claim.

So I guess when people make a claim that is different than what most people would expect, then most people would be more likely to expect support for that claim.

Also, I think there is an effect where people get familiar with earlier posts. I think it's a common thread around here that NVidia and AMD will compete against each other and time the release of their cards based on what each other is doing, and adjust pricing etc. with those market effects in mind. So, a person familiar with that may make a claim that relies on that support, without specifically mentioning that support. That's bad form, even if most readers already know the support, it's still an unsupported claim unless you mention that support.

+1

I remember when i said that i run 16xAA through CCC in a thread over at Guru3D.
It would not be right or feasible to expect the NV users who jumped in telling me that AMD cant to prove me wrong, when they don't have the hardware to readily do so.
I could of told them to go and find links that says AMD cant do so with a comparable setup or do the much easier thing of putting my money where my mouth was with some CCC screen shot because the person making the claim should be the source or read it from a reliable source to make the claim in the first place.

 

[Keysplayr]

I think it's even more basic than that, it doesn't matter about existence/intention, but just a matter of making a claim.

If you claim something, the burden is on you to support your claim.

Generally, when you claim something that is so basic and obvious, we all excuse the need for support. If I claim the sun will rise tomorrow, we all just accept that without needing proof. But it's still a claim.

So I guess when people make a claim that is different than what most people would expect, then most people would be more likely to expect support for that claim.

Also, I think there is an effect where people get familiar with earlier posts. I think it's a common thread around here that NVidia and AMD will compete against each other and time the release of their cards based on what each other is doing, and adjust pricing etc. with those market effects in mind. So, a person familiar with that may make a claim that relies on that support, without specifically mentioning that support. That's bad form, even if most readers already know the support, it's still an unsupported claim unless you mention that support.

I would agree. But then it also matters if someone claims something as an opinion or as a fact. In this instance and particular argument, it couldn't matter less.

 

[Ajay]

Nice an argument within a debate - maybe you guys should added another level, and make it really fun