AMD losing money like its going out of fashion

AMD losing money like its going out of fashion

Summary: Another quarter and AMD loses another chunk of change - $600 million to be exact.

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TOPICS: Intel, Processors
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Another quarter and AMD loses another chunk of change - $600 million to be exact.

This latest $600 million loss (amounting to $1.09 a share) comes after two previous quarters of loss - $574 million during Q4 2006 and $611 million for Q1 2007.  Sales rose but revenues slumped due to the aggressive price war AMD is having with Intel.  AMD executives are now pinning their hopes on the quad-core Barcelona, due out August, to boost revenue over the second half of the year.

The direction that AMD is headed worries me because over the past year Intel's main competitor has been hammered so much that it now doesn't offer Intel much of a challenge, and there's always a danger that a complacent Intel will fall back to the lazy 486 days where innovations were few and far between.  Sure, Intel has come out with some killer products lately, but this has been in response to AMD.  Without AMD, I fear that things to stagnate over at Intel.

I'm hoping that AMD has some killer desktop processors lined up for 2008.

Thoughts?

Topics: Intel, Processors

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14 comments
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  • AMD Dead? Not Yet.

    It's probably a little too early to worry about AMD throwing up its hands and going out of business. True, a $600 million loss in its latest quarter looks frightening. But there was encouraging news as well. For one thing, AMD reported sales of $1.36 billion for the quarter versus $1.22 billion in the same quarter last year. That was higher than what Wall Street analysts expected.

    AMD also had a one-time charge of $130 million related to its ATI acquisition, which bit into its earnings.

    Perhaps most importantly, AMD actually gained a little market share in the second quarter. According to iSupply it has about 11.4 percent of the microprocessor market. That's not as good as a year ago when it was about 17 percent, but still indicates things may be picking up.

    Add to that the Toshiba deal to use AMD chips in its laptops, the debut of the Barcelona quad processor and what will likely be higher sales in the third quarter, and things don't look entirely grim for AMD.
    FlyFar
    • That's a pretty big bet

      The Barcelona is starting to look more and more like the PS3 every day. Something that might be great but that we can't get full use of as of yet.

      What I mean by like the PS3 is that AMD is betting heavily on that processor. Unlike Sony though, AMD doesn't have the Blu-Ray Backup plan.

      I am not saying AMD will fold. Intel can't afford for this to happen. That would put them in the same position as Microsoft and they don't want that kind of legal trouble. AMD came about because IBM didn't want Intel to have full control of the processor market. Now that more vendors are in power, I know they won't let Intel put AMD out of business either.
      nucrash
      • Isn't Transmeta still around?

        ]:)
        Linux User 147560
        • Don't get me started on Transmeta

          They moved everything over to R&D. The only other big name chip manufacturer is VIA who owns National Semi-Conductor who bought Cirrix who never really did much to begin with.

          Transmeta made my POS tablet which I thought was cool until I actually wanted to use it to do something.
          nucrash
  • Is AMD cooking its financials?

    There are some folks questioning whether AMD is using interesting accounting techniques to make their balance sheet reflect better news than reality

    Judge for yourselves

    http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_A/threadview?m=te&bn=893&tid=1582831&mid=1582831&tof=21&frt=2#1582831

    http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_A/threadview?m=te&bn=893&tid=1582819&mid=1582819&tof=24&frt=2#1582819
    thetruthhurts
    • Like anyone is going to believe some message board post

      If you have evidence that AMD is cooking their books (kinda difficult under Sarbanes-Oxley) share it with us. Linking to Yahoo message board posts as proof of anything is... well, it's just silly.
      WiredGuy
      • Evidence of Enron doing the same?

        Please point me to the evidence that Enron wasn't cooking its financials until it was too late.
        thetruthhurts
    • Is John Mackey at it again?

      :)
      bidemytime
  • Intel Monopoly

    It's time to split Intel. Like many monopolies, it dominates the market without any commitment to its customers. I remember the glitch that ruined sustained arithmetic processing which Intel wouldn't disclose until exposed. Too bad we didn't have a few more players but AMD can compete if it doesn't have to compete with a cash-bloated giant. Next thing you know, we'll have another Microsoft putting out hardware garbage.
    robapacl@...
    • AMD won't die

      IBM won't let that happen. Nor will anyone else.

      AMD will lose a ton of money, but the government will help them out.
      nucrash
      • I agree - AMD is too tempting as a takeover target

        [i]"AMD will lose a ton of money, but the government will help them out."[/i]

        It is far more likely that someone with deep pockets and a shortage of chips in their inventory will snap up AMD at bargain basement prices. Of course, they may still be in the chip business but will it be PC processors?
        bportlock
  • Monopoly? Hardly....

    Intel's positioning seems fierce today, it was yesterday, and it's bound till' some day, far in the future. But AMD will (And quote me will,) make some kind of stand against Intel; then, now, and forever.

    It sounds like a movie plot, arguably so, but it really wasn't so long ago that AMD overtook Intel in relative speed, because unlike Intel, AMD is not plagued by huge profiteering habits, political instability and scandals, and even loss of interest. If everyone's driving a Civic, who's driving a Mustang?

    For example, while Intel was stuck making 'Pentium' chips, (Remember those bundles of heat?) and in pure MHz terms, smoking the competition while they were at it, AMD looked beyond the big Gz' and saw that the computer chip was an inefficient blob of mass. They saw past Intel's glaring patents, and began to look at making the chip an efficient unit, where the quality of a 'cycle' was given more respect than purely how fast the cycle was completed. (Sounds like love-making... ssssss. touchy. touchy.) AMD began to emerge as a real threat, something Intel hadn't seen in a long time.

    AMD has the capability to make huge innovations; it has much more room to grow than Intel. As for now, AMD will be, for a while to come, a hugely fluctuating company. When the time's right, AMD will pull out the big guns again, forcing Intel to draw once more- All in the name of their consumer's big bucks. A monopoly, Intel's hardly a company.
    lilsim89
    • AMD too big for their britches

      I do agree with you. But I think much of AMD's current problem is that they moved to the main stage rather quickly and Intel basically pulled the rug out from underneath them as AMD was about to take the mic. AMD needs to scale back a bit, as they have been doing. They need to stop focusing on all this marketing crap and focus on becoming a better company.

      I think their first mistake was the lawsuit against Intel. The should have taken what money they had and reinvested in R&D to keep pushing forward in chip design. Unfortunately they thought of themselves as a one trick pony and acted as such to make a sucker punch at Intel while they were hot.
      nucrash
      • Agree 100%

        Tried to be like Intel too fast instead of focusing on niche.
        thetruthhurts