AMD Q415 results

[mrmt]

Q4 2015 Results
o Revenue of $958 million, down 10 percent sequentially primarily driven by seasonally lower sales of semi-custom SoCs and down 23 percent year-over-year, primarily due to lower client processor sales.

o Gross margin of 30 percent, up 7 percentage points sequentially. Q3 2015 gross margin was negatively impacted by an inventory write-down of $65 million, or 6 percentage points. Excluding the Q3 2015 inventory write-down, non-GAAP gross margin improved 1 percentage point sequentially, primarily due to improved product mix in the Computing and Graphics segment.

o Operating loss of $49 million, compared to an operating loss of $158 million for the prior quarter. Non-GAAP(1) operating loss of $39 million, compared to non-GAAP(1) operating loss of $97 million in Q3 2015, primarily due to higher gross margin and lower operating expenses.

o Net loss of $102 million, loss per share of $0.13, and non-GAAP(1) net loss of $79million, non-GAAP(1) loss per share of $0.10, compared to a net loss of $197 million, loss per share of $0.25 and non-GAAP(1) net loss of $136 million, non-GAAP(1) loss per share of $0.17 in Q3 2015.

o Cash and cash equivalents were $785 million at the end of the quarter, up $30million from the end of the prior quarter, primarily due to improved operating cashflow.

o Total debt at the end of the quarter was $2.26 billion, flat from the end of the prior
quarter.


================

They are back to losing market share. R&D also got a small hit. Q1 guidance was waaaay too soft. On a bright node they managed to scrap a small positive operating cash flow.

 

[ShintaiDK]

For Q1 2016, based on a 13 week quarter, AMD expects revenue to decrease 14 percent, plus or minus 3 percent, sequentially

Seems AMD will be a (sub?) 3B$ company in 2016. Down from 3.99B in 2015.

Enterprise, Embedded and Semi-Custom segment revenue of $488 million, a decrease of 23 percent sequentially primarily driven by seasonally lower sales of semi-custom SoCs. Revenue decreased 15 percent from Q4 2014 primarily driven by lower game console royalties, and server and embedded revenue

In case anyone still believe in the console dream.

Stocks down to 1.8x$ in aftermarket.

IoT and Server is the only thing left to grow in for MPU companies.

 

[mrmt]

Seems AMD will be a (sub?) 3B$ company in 2016. Down from 3.99B in 2015.

They are in real danger of that, especially because Q2 and Q3 doesn't bring too much for them.

In case anyone still believe in the console dream.

Semi-custom revenue shrank 9% YoY, but operating results shrank more than 40%. Part of this is certainly related to smaller margins on each unit sold, offsetting the increase in number of units shipped.

 

[Arachnotronic]

Ugly guidance. They are selling hope to investors now, pumping Zen in HEDT and in servers....

 

[Azuma Hazuki]

I just hate the idea that Zen might die on the birthing blocks at this rate. AMD has made amazing technological leaps and really I think per pound of engineer and per R&D dollar they're more efficient than Intel.

What a sad thing, if AMD dies early.

 

[cbn]

Instead of AMD dividing what little amount of APU chips they have between mobile and desktop, I hope AMD is able to focus almost purely on mobile for reasons I mentioned here , here, and here.

They just aren't competitive on desktop with those APUs.

 

[mrmt]

Instead of AMD dividing what little amount of APU chips they have between mobile and desktop, I hope AMD is able to focus almost purely on mobile for reasons I mentioned here , here, and here.

They just aren't competitive on desktop with those APUs.

AMD cannot choose where or what to sell, they must sell whatever they can sell, for whatever they can fetch.

 

[ViRGE]

I just hate the idea that Zen might die on the birthing blocks at this rate. AMD has made amazing technological leaps and really I think per pound of engineer and per R&D dollar they're more efficient than Intel.

What a sad thing, if AMD dies early.

These aren't good times for AMD, but it's no risk to Zen. Even if things go poorly, the company will be around for plenty of time for Zen to launch.

 

[Arachnotronic]

Lisa Su said on the call that Zen-based server chips will be in the performance class of ~80% of the server market; won't be fast enough for the top 20%.

 

[cbn]

AMD cannot choose where or what to sell, they must sell whatever they can sell, for whatever they can fetch.

They have a really bad desktop problem though:

http://forums.anandtech.com/showpost.php?p=37937094&postcount=343

Here are the AMD APU vs Core i3 desktop prices from January 2014:

http://forums.anandtech.com/showpost.php?p=35947650&postcount=746

Using Newegg prices are a comparison for pre-built desktops:

http://www.newegg.com/Product/Produc...el Core i3 (Core i3 starts @ $399)

http://www.newegg.com/Product/Produc...8-Series APU (A8-6500 APU starts @ $479)

http://www.newegg.com/Product/Produc...0-Series APU (A10-6700 APU starts @ $499)

Using the Current Fry's sale for Pre-builts here is what I am coming up with:

http://www.frys-electronics-ads.com/...4130-Processor (Core i3 for $348)

http://www.frys-electronics-ads.com/...6500-Processor (A8-6500 for $448)

Now granted the Core i3 systems come with 4GB RAM vs. 8GB for the AMD systems, but that still a pretty big disparity in pricing IMO.

^^^^ Notice how Core i3 desktops (despite a rather high processor list price) are still cheaper than both the A8 and A10 desktops.

Now here are the current price trends (2 years later):

Here are the listings for new (not refurbished) A8 desktops (some of these are A8-6410 cat core processors):

http://www.newegg.com/Product/Produ...14&IsNodeId=1&bop=And&Order=PRICE&PageSize=30

(Kaveri starts @ $399.99)

Here are the listings for new (not refurbished) A10 desktops

http://www.newegg.com/Product/Produ...14&IsNodeId=1&bop=And&Order=PRICE&PageSize=30

(Kaveri starts @ $419.99)

Here are the listings for new (not refurbished) Core i3 desktops

http://www.newegg.com/Product/ProductList.aspx?Submit=ENE&N=100019096 4814 600014733&IsNodeId=1

(Core i3 4170 starts @ $329.99)

Notice how the Core i3 desktops are still significantly cheaper than the A10 and A8 desktops.

With that info noted, what do you think should be done?

1.) Should AMD keep on fighting on Desktop with A10 and A8 Bristol Ridge APUs?

2.) Or do you think AMD would be better off focusing all 4C/512sp and 4C/384sp Bristol Ridge into Mobile (particularly the 35W category)?

3.) Or perhaps a middle of the road approach where all 512sp dies are allocated to mobile, but 4C/384sp is allowed on desktop?

Personally, I am thinking #2 is the best option. Then maybe at some later time (perhaps when Zen APU launches) there could be some left over 4C/384sp and 4C/512sp Bristol Ridge made available on AM4?

 

[mrmt]

They have a really bad desktop problem though:

http://forums.anandtech.com/showpost.php?p=37937094&postcount=343

I don't disagree with that, but what makes you think that these handicaps don't apply on notebooks? It's this handicap, plus the AMD power consumption tax, which further pushes AMD products down in the value chain.

AMD doesn't simply have a desktop problem, they have a MPU problem. They are outclassed both in terms of performance and cost structure.

 

[mrmt]

Lisa Su said on the call that Zen-based server chips will be in the performance class of ~80% of the server market; won't be fast enough for the top 20%.

Given the performance degradation of AMD chips from Investor Q&A to real world benchmarks, I think we're posed to another flop.

 

[Fjodor2001]

Given the performance degradation of AMD chips from Investor Q&A to real world benchmarks, I think we're posed to another flop.

If that was the metric to go by, lots of companies would be posed to flop including Intel. There's most often a discrepancy between marketing hype and reality.

 

[Phynaz]

You're all just of bunch of haters. What will you do when AMD isn't around to give Intel competition?

 

[jpiniero]

Lisa Su said on the call that Zen-based server chips will be in the performance class of ~80% of the server market; won't be fast enough for the top 20%.

At what power level though? That's the question. You have to remember that most of Intel's server sales are processors in the mid 2 Ghz range... AMD could try to sell servers at 4 Ghz to make up the core count and IPC deficit but if it's drawing 300 W nobody will bother.

 

[cbn]

They have a really bad desktop problem though:

http://forums.anandtech.com/showpost.php?p=37937094&postcount=343

I don't disagree with that, but what makes you think that these handicaps don't apply on notebooks? It's this handicap, plus the AMD power consumption tax, which further pushes AMD products down in the value chain.

AMD doesn't simply have a desktop problem, they have a MPU problem. They are outclassed both in terms of performance and cost structure.

Yes, I think it is safe to say the CPU and GPU component of 35W Bristol Ridge mobile will be lower performing than 14nm Intel 2C/4T and a Nvidia GPU like GM108.....but the big difference is that the AMD processor is a SoC.

So Bristol while Bristol Ridge may be less efficient from a processing standpoint It could be more efficient from a packaging standpoint (allowing a larger battery, smaller form factor, etc.)

But I suspect AMD needs to supply the OEMs enough chips in order to justify the engineering costs, otherwise I think they would end up with low volume runs where the price per unit is too high.

 

[DrMrLordX]

You're all just of bunch of haters. What will you do when AMD isn't around to give Intel competition?

h8rs gonna h8. Pass the h8r4d3! Bonus points if you can translate that.

On a more serious note: it's good that AMD brought their losses down from Q3 to Q4, and Carrizo's failure to make a bigger impact on the market should have been a clear indicator that things were going to continue in loss territory.

 

[stockwiz]

I wouldn't buy Intel stock, much less AMD...both companies were late to the mobile game, and mobile is where it's at. Perhaps Intel can catch up and be alright though, but AMD is a goner. Doesn't matter since CPU raw speeds aren't going to make any massive gains the next decade... a 6+ core broadwell-E rig will last a typical gamer 5+ years..

gaming has stagnated in terms of raw power and graphics... mobile is where the money is at.. when you've got people dumping hundreds to over a thousand dollars to get ahead in a game like Clash of Clans, why develop something more complicated?

 

[Arachnotronic]

I wouldn't buy Intel stock, much less AMD...both companies were late to the mobile game, and mobile is where it's at. Perhaps Intel can catch up and be alright though, but AMD is a goner. Doesn't matter since CPU raw speeds aren't going to make any massive gains the next decade... a 6+ core broadwell-E rig will last a typical gamer 5+ years..

gaming has stagnated in terms of raw power and graphics... mobile is where the money is at.. when you've got people dumping hundreds to over a thousand dollars to get ahead in a game like Clash of Clans, why develop something more complicated?

Look at Qualcomm stock...or Apple.

Mobile stocks are doing like crap, and mobile financials for merchant companies are deteriorating fast. MediaTek and Qualcomm basically at multiyear lows.

 

[erunion]

Lisa Su:

We’re very much committed to deliver Zen on the time scale that we have previously stated, which is: 2016 you’ll see samples, hardware, some early volume, but 2017 is the first full year of volume in servers and desktops. We’re excited.

http://venturebeat.com/2016/01/14/a...eo-lisa-su-says-2016-is-the-year-amd-is-back/

 

[SlowSpyder]

We just had a thread about PC shipments falling over 10%. That's AMD's primary revenue generator, right?

 

[frozentundra123456]

Well, you could make a nice profit on AMD if you bought at the right time and sold at the right time. Or if you shorted at the right time. Intel one would buy as a conservative investment. But yes, I agree, both companies are facing serious challenges.

One has to wonder though, how long the mobile craze will continue as well. I think eventually performance will become "good enough" and the market will become saturated, just like computers have done. And we are already starting to see it in tablets as well.

 

[frozentundra123456]

h8rs gonna h8. Pass the h8r4d3! Bonus points if you can translate that.

On a more serious note: it's good that AMD brought their losses down from Q3 to Q4, and Carrizo's failure to make a bigger impact on the market should have been a clear indicator that things were going to continue in loss territory.

I think he was being sarcastic.

 

[SlowSpyder]

Well, you could make a nice profit on AMD if you bought at the right time and sold at the right time. Or if you shorted at the right time. Intel one would buy as a conservative investment. But yes, I agree, both companies are facing serious challenges.

One has to wonder though, how long the mobile craze will continue as well. I think eventually performance will become "good enough" and the market will become saturated, just like computers have done. And we are already starting to see it in tablets as well.

I just put a SSD in someone's C2D E6600 / DDR2 powered desktop and installed Windows 10. He was so happy with the machine he won't be upgrading for years now, and that machine is already 'old'.

 

[frozentundra123456]

Lisa Su:



http://venturebeat.com/2016/01/14/a...eo-lisa-su-says-2016-is-the-year-amd-is-back/

So basically token availability at best in 2016. I am still expecting a very slow ramp up like intel 14nm.