- Jul 1, 2005
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ATI still hurting AMD
- Thread starter Wreckage
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TurtleCrusher
Lifer
- Apr 20, 2008
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I think NVIDIA Focus Group Members only say that because they want Ati around for competition.
Without ATI, an 8800GT let alone a GTX285, might not even exist. We might still be fiddling with Geforce 3's.
Without ATI, an 8800GT let alone a GTX285, might not even exist. We might still be fiddling with Geforce 3's.
Arkaign
Lifer
- Oct 27, 2006
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*sigh*
I always thought it was a boneheaded move to buy ATI. Not that ATI was bad or anything, just that AMD should have held their assets and focused on improving their CPUs. With a megagiant like Intel for competition, there's no room for funny business.
Cheap integrated video is what dominates 90%+ of PCs and notebooks anyways, and even the Nvidia and AMD integrated video chipsets are not a high-margin deal. Better to make a competitive cpu lineup that has an ASP of ~$200 than to dilute you resources, both at the administrative level and at the finance level.
I always thought it was a boneheaded move to buy ATI. Not that ATI was bad or anything, just that AMD should have held their assets and focused on improving their CPUs. With a megagiant like Intel for competition, there's no room for funny business.
Cheap integrated video is what dominates 90%+ of PCs and notebooks anyways, and even the Nvidia and AMD integrated video chipsets are not a high-margin deal. Better to make a competitive cpu lineup that has an ASP of ~$200 than to dilute you resources, both at the administrative level and at the finance level.
Yep.
Back when this happened, many were proclaiming the imminent death of NVIDIA and possibly Intel even (!)- no one would be able to withstand the new super company AMD/ATi.
Turned out that what happens when you add two second place companies together with a lot of debt to finance the merger you get two second place companies crushed by debt load.
AMD should have stuck to what they do best, they had no need of ATi. Likewise, I don't know that ATi needed AMD management.
- Jul 1, 2005
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Originally posted by: taltamir
ok lemme rephrase that... ATI is losing a lot less money than the CPU department
That I can agree with.
I think AMD should have just went into a licensing agreement with either ATI or NVIDIA 2 years ago for whatever they needed.
Of course if the economy was still rolling like in the late 90s they could have just shrugged off a coupla billion like it was nothing. Now it's hard to shrug off a free coupon for coffee.
Originally posted by: taltamir
ok lemme rephrase that... ATI is losing a lot less money than the CPU department
LOL! (for real)
I think the key here is AMD would have been in a lot better shape without the debt of buying ATi.
They never had more than 22% of the market or thereabouts, and seemed to get along for years as "second choice".
The Ati purchase was a very bold move on their part, given the debt and competition.
If it would have paid off they'd be wizards, as it did not, they get to wear the pointy cap and have people like us point and say "Fools! You should have known".
Sometimes you win, sometimes you lose...
I honestly believe the AMD/ATI merger will prove to be a good move in the long term... if they survive that long.
Denithor
Diamond Member
- Apr 11, 2004
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DAAMiT strikes again...
I really wish AMD had been able to partner/merge with nVidia instead, I think that would have made a much stronger team (nV had better chipsets for AMD cpus & was on the cusp of the G80 release - which would have provided much needed funds for the last few years).
I really wish AMD had been able to partner/merge with nVidia instead, I think that would have made a much stronger team (nV had better chipsets for AMD cpus & was on the cusp of the G80 release - which would have provided much needed funds for the last few years).
- Jul 1, 2005
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That would have just dragged NVIDIA down. The smartest thing AMD could have done is just license graphics tech from either ATI or NVIDIA. That's what Intel, Microsoft and Sony did.
I bet they could have purchased everything they needed for $100 million plus a small cut for each chip sold.
I didnt like the merger when it happened and the news years after are proving my worst fears right.
If AMD wanted an integrated platform they could have spent less money and developed one.
If AMD wanted an integrated platform they could have spent less money and developed one.
AMD paid way too much for ATI AND took on too much debt to make the purchase. The write downs are a direct result of AMD's overpaying. AMD purchased ATI just as ATI was preparing to roll out two consecutive generations of uncompetitive products while nVidia seemed to hit its stride with the G80.
Thank goodness, for AMD and all PC gamers sakes, that ATI is back on track and even seems to have an edge on nVidia with the RV770 and derivatives. nVidia may have the absolute performance crown, but ATI offers very competitive products at all price points that it can manufacture for less money and sell for more profit than nVidia.
I agree the purchase of ATI was a bold, farsighted move on AMD's part, but it still seems to have been a mistake. AMD's Fusion concept of CPU/GPU all-in-one may indeed turn out to be important in several years time, but it won't do AMD any good if AMD does not have the money to implement it (or if the company has gone bankrupt).
AMD could have used the cash it earned from the good old days of S939 Opterons and Athlon64 X2s to help it deal with Intel's resurgence (you couldn't have seriously expected Intel to keep f'ing up on the desktop and server CPU front forever, right?). Instead, AMD blew all of that cash and took on piles of debt to buy ATI, which has backed AMD into perhaps a fatally tight corner. Add on top the terrible outlook for the semiconductor market in 2009 which is even having a serious impact on Intel, and AMD's near term prospects look grim. It pains me to say it, but because of its poor execution and bad business decisions in the last few years, I think that AMD's days are numbered. It's a shame.
Which will suck, but you're likely right.
On the graphics front, NVIDIA will keep after ATi because even people not necessarily using stereo/physX/CUDA likely won't want to make sure they never can by purchasing ATi except at bargain prices. (not to mention every game they launch tells them "Buy NVIDIA")
On the CPU side AMD has nothing comparable to high end Penrynn, let alone i7. Why would anyone buy a AMD motherboard when everyone currently has LGA775, and upgraders have no choice but 1366?
On the chipset side, people will keep not buying AMD chipsets because there are no competitive AMD CPUs, and they can get CF (if they want it) on Intel boards and not hamstring themselves.
About all AMD has going on now is the 4800 series are really good cards, but even with that they've been forced to low margin sale prices by other factors.
Bleh.
It's got to be really really depressing at AMD/ATi now, considering another tenth of the people you know as an employee there just got dumped, and if you're still there you got a big pay cut if you're management or engineering.
THAT will have huge fallout too.
If you're an engineer and making $150,000 a year and your manager tells you "Guess what? Now you make $135,000!" your first move is to send your resume' to every company that might hire you. You likely just lost your discretionary income or what you're investing- either way you walk and walk fast in a climate like that.
The guys who don't end up reading "Who moved the Cheese" while trying to figure out how to live on $2K month unemployment vs $10K a month income.
It's just bad news anyway you cut it.
I disagree...the new Phenoms are fairly competitive (not with i7) and they're drop-in replacements in most AM2+ motherboards. They did a decent job (not spectacular) with the new CPUs and if prices are competitive they'll sell I think.
Amd will go bankrupt, as the economy will get worse and may never return to same type of consumer toy driven model. Nvidia will last a bit longer, but awaits the same fate. Outside of Intel, the tech industry is awash in red ink.
- Jul 1, 2005
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Arkaign
Lifer
- Oct 27, 2006
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Yeah they're far from terrible. But the CPU business is brutal, particularly these days. With the amount of R&D and sunk costs to recoup, you need to come up with something that will command a high ASP.
If the top AMD Cpu is performance equal + or - a few % of a $600 Intel Cpu, then they can sell theirs at or near the same price. If Intel lowers prices on theirs, it causes a ripple effect on the whole lineup, and thereby the ASP. With their top Cpu competing only with a midrange Intel solution, and with more price cuts coming, it's looking like they will have to lower their top-end desktop Cpu to the ~$200 range to sell them. This means the lower-end CPUs get even cheaper, bringing AMD's ASP down to the basement once again.
It's unsustainable. AMD's last real profitability was when they ran the tables with S939, and ASPs in the $200+ range, with top-end prices at the $1k range for desktop CPUs.
With i7-tech Intel processors moving in on Opteron in backoffice setups, it's uglier than ever.
I'm bending my brain trying to figure a path out of this for AMD, but it's bad.
Some ideas :
(1)- Sell ATI. This is pretty much impossible due to massive debts, and would amount to giving up.
(2)- Chapter 11, or another form of organized restructuring. Risky, but would potentially write off a lot of debt. Investor confidence is already on the floor, so not much to worry about there (I gambled on AMD stock, which looks to be going nowhere).
(3)- Cut costs everywhere. This may be their only chance, and looks to be the path they're choosing. It's the time-tested 'turtle' technique that big corps use to weather recessions. Unfortunately, they didn't bank the $$$ they made in the good times, so now that the bad times are here, it seems unlikely that they have a very optimistic chance of pulling through.
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