AMD will writedown $880 million related to ATI acquisition

[Foxery]

It's a polite way of saying they took a loss. Just like all the big banks are taking "writedowns" for billions of dollars of failed mortgages...

DAAMIT does produce more products than just "high end" CPUs/GPUs, y'know. Server platforms, integrated graphics, some Flash memory IP, etc. They aren't losing money because AnandTech readers won't buy Phenoms; they're losing money because nobody is buying any of their products in large volume.

 

[BenSkywalker]

AMD paid $6Billion for ATi IIRC, AMD as a whole is currently valued at less then $3Billion.

Another way of thinking about it, AMD decided nVidia was too expensive @$9Billion to puchase which is why they decided to buy ATi when they did. nVidia currently has almost enough liquid assests to buy AMD outright(~1.8Billion that could be made into cash on very short notice). AMD needs to do something to get marketshare turned around quickly, the valuation of their company is getting so low the could soon be bought out and split up with a purchasing company just keeping the fabs and junking everything else that is AMD and ATi(the fabs are already worth more then the entire company including the fabs).

 

[taltamir]

140watt TDP? dear lord!
And at 2.6ghz it is STILL slower then the Q6600 @ 2.4... which is a last gen part...
And it OCs as "high as 3ghz"? The Q6600 OC to 3.6ghz.
And it costs 30$ more then the Q6600...

While it is certainly much better then a 2.2 phenom that oces to 2.25... or a 2.4 that oces to 2.5... it is still not even close to touching intel in:
1. Overall performance
2. Performance per dollar
3. Performance per watt
4. OC potential

 

[pmv]

Originally posted by: Fox5

Originally posted by: Wreckage

Originally posted by: God Mode
samsung or ibm should buy amd

I heard a rumor of HP

HP got out of the chip making business a few years back, why would they get back into it?

Isn't the same true of IBM?

Hmmm, thought of starting a new thread to ask this, but not sure if it would just become a fan-boy war. But really curious what those with more techy knowledge than me think about the following...

Why is it that the CPU market has so few players? Is it entirely a practical, technical issue of getting physical plant up and running or is there a legal licensing reason for it also?

Has it been getting worse over the long term as it seems to me (bye bye Motorola, cyrix, ibm, hp...) and is it actually possible that AMD will go under completely at some point?

Are AMD's current problems noticeably worse than they have been in the past? They clearly have always been the underdog, but every now and then have unexpectedly taken the performance lead, is the current slough worse than past ones?

And whether or not AMD recovers or not, is it possible that the future will see Intel and nVidia going head-to-head?, as they move into each other's market. Would nVidia stand a chance if that happened?

Sorry if this is a bit OT of the thread. I find it kind of fascinating the way the computer business works, and the way it progresses so rapidly, despite seeming to perpetually teeter on the brink of having no competitive market at all. I mean, for a long time now we've been only one company away from Intel having the market to itself.

Plus it evolves in unexpected ways, would anyone have predicted the GPU market to become as significant as the CPU one, back in the days of CGA?

edit - hmmm possibly I should repost this in the cpu forum

 

[RussianSensation]

Accounting treatment of Goodwill writedown has nothing to do with actual earnings of the company this quarter. Wallstreet bankers will generally look towards actual losses disregarding the one time writedown in valuation of the stock price on the 17th since it only amounts to an accounting treatment of Goodwill. The EPS and gross margins will be more indicative of AMD's direction. One has to understand that a large portion of the tech market has declined as a result of general unfavourable economic outlook and investors' fears (i.e. as a result, selling off equities and buying commodities or bonds).

Anyway you slice it, AMD will take market share away from NV (as evident in NV's stock and revenue projections declines). However, one can argue that investors have oversold AMD and have not reflected the additional market share AMD will gain at NV's expense in the stock price. Although liquidity and balance sheet position underline the dangerous proposition from an investor's perspective, further reducing demand for the actual stock from all the other possible viable plays like Apple or the 'safer' Intel play in this market.

 

[Schadenfroh]

Originally posted by: pmv

Originally posted by: Fox5


HP got out of the chip making business a few years back, why would they get back into it?

Isn't the same true of IBM?

IBM is still in it... PowerPC, Cell, CPUs for video game consoles. IIRC, HP has a hand in the Itanium chips, but they may have bailed on that venture...

is there a legal licensing reason for it also?

Intel owns the x86 architecture.

 

[bryanW1995]

amd's problem has nothing to do with gpus and everything to do with cpus right now. In the coming months I would expect them to outperform the tech segment in general on the strength of their gpu business and upcoming release of 45nm cpus, but that can easily change if they start experiencing delays and/or nvidia comes back sooner than expected.

 

[bryanW1995]

Originally posted by: Schadenfroh

Originally posted by: pmv

Originally posted by: Fox5


HP got out of the chip making business a few years back, why would they get back into it?

Isn't the same true of IBM?

IBM is still in it... PowerPC, Cell, CPUs for video game consoles. IIRC, HP has a hand in the Itanium chips, but they may have bailed on that venture...

is there a legal licensing reason for it also?

Intel owns the x86 architecture.

didn't sony bail out of the production side of cell? does that leave ibm by themselves, or is toshiba still involved?

 

[thilanliyan]

Originally posted by: bryanW1995
didn't sony bail out of the production side of cell? does that leave ibm by themselves, or is toshiba still involved?

Yep Toshiba now has the chip facilities that Sony used to have.
http://www.engadget.com/2008/0...shiba-for-835-million/

 

[Fox5]

Originally posted by: pmv

Originally posted by: Fox5

Originally posted by: Wreckage

Originally posted by: God Mode
samsung or ibm should buy amd

I heard a rumor of HP

HP got out of the chip making business a few years back, why would they get back into it?

Isn't the same true of IBM?

Hmmm, thought of starting a new thread to ask this, but not sure if it would just become a fan-boy war. But really curious what those with more techy knowledge than me think about the following...

Why is it that the CPU market has so few players? Is it entirely a practical, technical issue of getting physical plant up and running or is there a legal licensing reason for it also?

Has it been getting worse over the long term as it seems to me (bye bye Motorola, cyrix, ibm, hp...) and is it actually possible that AMD will go under completely at some point?

Are AMD's current problems noticeably worse than they have been in the past? They clearly have always been the underdog, but every now and then have unexpectedly taken the performance lead, is the current slough worse than past ones?

And whether or not AMD recovers or not, is it possible that the future will see Intel and nVidia going head-to-head?, as they move into each other's market. Would nVidia stand a chance if that happened?

Sorry if this is a bit OT of the thread. I find it kind of fascinating the way the computer business works, and the way it progresses so rapidly, despite seeming to perpetually teeter on the brink of having no competitive market at all. I mean, for a long time now we've been only one company away from Intel having the market to itself.

Plus it evolves in unexpected ways, would anyone have predicted the GPU market to become as significant as the CPU one, back in the days of CGA?

edit - hmmm possibly I should repost this in the cpu forum

Are you referring to x86 processors only or any processors?
IBM still produces plenty of high and low end processors.
Motorolla mainly produces low end (ie, on the level of the old mac g3 cpus and lower) for many markets.
HP only produced high end Itanium competitors anyway when they exited the market.
It's very possible that AMD could go out of business. Intel has the capability to meet the entire world's x86 production needs. More likely you'll see the platform eco system change and competitors will come from other directions (perhaps low end ARM systems). With new APIs and ISA, nvidia could hypothetically produce a very competitive (in certain applications) combination ARM + nvidia gpu (fusion type deal, but without backwards legacy to worry about). Additionally, nvidia may have the clout to get game makers to start moving toward this platform.

AMD's current down turn is worse than previous in that not only are they relegated to the budget market, but their parts are more expensive to produce than Intel's, they're not making money, and they went and got themselves into huge debt before the slump.

 

[drinklime]

they pay less taxes this way

 

[evolucion8]

Originally posted by: taltamir
140watt TDP? dear lord!
And at 2.6ghz it is STILL slower then the Q6600 @ 2.4... which is a last gen part...
And it OCs as "high as 3ghz"? The Q6600 OC to 3.6ghz.
And it costs 30$ more then the Q6600...

While it is certainly much better then a 2.2 phenom that oces to 2.25... or a 2.4 that oces to 2.5... it is still not even close to touching intel in:
1. Overall performance
2. Performance per dollar
3. Performance per watt
4. OC potential

You should do a research or see the review links posted above and see that the overall performance at stock is pretty much even, the performance per dollar at stock speed is slighly better for Intel, performance per dollar once overclocked goes for Intel since it's cheaper, and the performance per watt goes definitively for Intel, also the OC Potential. And of course, is touching Intel and sometimes outperforming it, something that AMD was unable to do before with their Phenom 9600 series, also bear in mind that the performance improvements during overclocking favours slighly AMD over Intel, just that it cannot go ahead Intel because of the overclocking limits against the more mature Intel 65nm process, and not even close against the 45nm process.

 

[Wreckage]

Originally posted by: evolucion8

Well, actually the HD 38XX series were profitable because they were so cheap to manufacture that dropping the prices like they did didn't affect by much the profits like nVidia had with their G92 GPU, also the AGP version surprisingly sold well too.

Do you have links to back up any of this? Like the profit margins for the 38xx and G92 plus sales numbers?

 

[postmortemIA]

AMDs is gonna lay off 10%... why are people still fans of AMD? You wouldn't be if you are gonna be laid off. I mean AMD is obviously badly run when they have to downsize regularly every year.

 

[RussianSensation]

Originally posted by: bryanW1995
amd's problem has nothing to do with gpus and everything to do with cpus right now. In the coming months I would expect them to outperform the tech segment in general on the strength of their gpu business and upcoming release of 45nm cpus, but that can easily change if they start experiencing delays and/or nvidia comes back sooner than expected.

Yes that is true, but do you believe the current stock price has factored in their positioning on the GPU front? If anything the stock has fallen from mid 7s to high 4s....

 

[evolucion8]

Originally posted by: Wreckage

Originally posted by: evolucion8

Well, actually the HD 38XX series were profitable because they were so cheap to manufacture that dropping the prices like they did didn't affect by much the profits like nVidia had with their G92 GPU, also the AGP version surprisingly sold well too.

Do you have links to back up any of this? Like the profit margins for the 38xx and G92 plus sales numbers?

Just use the common sense, smaller chip, more chips per waffer, cheaper to manufacture. It helped AMD to stay affloat, otherwise AMD would had stop to exist today because they're under a huge debt, I know that the G92 chips made more money to nVidia against the RV670, but as I said before, the G92 is more expensive to manufacture, and AMD forced nVidia to slash prices to be competitive around the same price market, and for sure, AMD did more money per card than nVidia did, but overall nVidia sold more cards. ATi is doing it again with the HD 4800 series, and now the difference is far more pronounced, G200 is a huge chip. I won't bother to argue with you since you are nVidia biased, that's something that I've been seeing across the forums. So just thank ATi to force nVidia to slash prices that benefits all customers, after all, competition is always good. Otherwise, we would still using Pentium 4's and GeForce FX's.

 

[Wreckage]

Originally posted by: evolucion8
Just use the common sense

So nothing then.

smaller chip, more chips per waffer, cheaper to manufacture.

How many chips were usable? How many did they sell?

It helped AMD to stay affloat, otherwise AMD would had stop to exist today because they're under a huge debt,

You should read the article again. They are not staying afloat they are sinking fast. Their stock hit a 16 year low

I know that the G92 chips made more money to nVidia against the RV670, but as I said before, the G92 is more expensive to manufacture, and AMD forced nVidia to slash prices to be competitive around the same price market, and for sure, AMD did more money per card than nVidia did, but overall nVidia sold more cards. ATi is doing it again with the HD 4800 series, and now the difference is far more pronounced, G200 is a huge chip. I won't bother to argue with you since you are nVidia biased, that's something that I've been seeing across the forums. So just thank ATi to force nVidia to slash prices that benefits all customers, after all, competition is always good. Otherwise, we would still using Pentium 4's and GeForce FX's.

Well your opinion aside you should really look at the financial statements released over the last several quarters. They tell a much different story than your opinion here.

 

[evolucion8]

http://www.xbitlabs.com/articl...ati-radeon-hd4850.html

ATI?s profits had declined dramatically but the release of the next GPU, codenamed RV670 and installed on the ATI Radeon HD 3800 series, helped improve the situation somewhat. The new GPU was free from the drawbacks of the R600 chip but lacked any really new features of its own. The only breakthrough was the 55mm manufacturing process. Otherwise, the RV670 inherited the R600 architecture, acquired support for UVD and DirectX 10.1, but lost the 512-bit external memory bus. The ATI Radeon HD 3870 and 3850 became bestsellers among gamers who could not afford to spend over $250 for their graphics card as these solutions delivered acceptable performance at a reasonable price. And it is no secret that mainstream products account for the largest share in total sales.

 

[BassBomb]

Wow that stock is really cheap..

 

[Viditor]

Originally posted by: shangshang

Originally posted by: taltamir
what does "writedown" mean?

I think in layman's term, it's a loss. I think AMD is in a lot of financial pain.

In layman's terms, when AMD bought ATI they estimated that it had a value of $x.xx Billion...
They have just re-evaluated the value and taken a writedown (or correction) on their total net worth including ATI...in other words, ATI wasn't worth what they estimated.

 

[Viditor]

Originally posted by: BFG10K
I don't think anyone is allowed to buy AMD because Intel will revoke their license sharing agreement.

Then again AMD could revoke their tech that Intel uses so who knows.

Just a rumour...
While it's true that Intel has the right to revoke their x86 IP if AMD is sold, AMD also has the right to revoke the IP of theirs that Intel uses (which is a huge amount) if that occurs.
Intel can't make processers or memory without AMD IP...and the same is true for AMD of course.

If AMD is ever sold, Intel and the new owners would simply renegotiate a new cross-licensing deal...

 

[Viditor]

Originally posted by: Wreckage

Originally posted by: BFG10K
The irony is that ATi is probably the only part of AMD that is profitable and competitive.

Not before last month really. Actually without knowing the margins on the new cards, they may not be profitable now.

The Graphics division, Enterprise division, and Mobile divison at AMD are all profitable and have been so since last year.

 

[Viditor]

Originally posted by: postmortemIA
AMDs is gonna lay off 10%... why are people still fans of AMD? You wouldn't be if you are gonna be laid off. I mean AMD is obviously badly run when they have to downsize regularly every year.

Ummm...Intel laid off 10% as well. What's your point?

 

[Wreckage]

Originally posted by: Viditor

The Graphics division, Enterprise division, and Mobile divison at AMD are all profitable and have been so since last year.

Got a link to back that up?????

How about this maybe....
http://techreport.com/discussions.x/14311

"Looking at market share, JPR's numbers suggest that AMD actually lost a fair amount of ground to Nvidia in Q4 despite the arrival of its Radeon HD 3800 series. Nvidia reportedly expanded its slice of the desktop graphics card market from 64% in the third quarter to 71%, leaving AMD with less than a third of all shipments"

 

[Viditor]

Originally posted by: Wreckage

Originally posted by: Viditor

The Graphics division, Enterprise division, and Mobile divison at AMD are all profitable and have been so since last year.

Got a link to back that up?????

How about this maybe....
http://techreport.com/discussions.x/14311

"Looking at market share, JPR's numbers suggest that AMD actually lost a fair amount of ground to Nvidia in Q4 despite the arrival of its Radeon HD 3800 series. Nvidia reportedly expanded its slice of the desktop graphics card market from 64% in the third quarter to 71%, leaving AMD with less than a third of all shipments"

Q4 was last year...and the 38xx only arrived near the end of it.