Who is worth more, you or AMD?

Who is worth more, you or AMD?

Summary: Can a reporter make more than AMD in a year? One person's analysis of AMD's financial status says so.

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TOPICS: Processors
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I'm not sure how affluent ChipLand readers are. But I assume you are well off, since you can afford a computer and some form of Internet access. But, according to News.com's Michael Kanellos, it's possible that you've made more money in your career than AMD has in it's lifetime. Mr. Kanellos, in a column (not a news story) examining AMD's history of financial losses (link: here), claims he's been able to personally make more money than AMD. On a reporter's salary to boot. Granted, Mr. Kanellos is figuring in for AMD's acquisition-related costs, such as those associated with its multi-billion-dollar purchase of ATI Technologies in October 2006. Keep that in mind if you check out the link.

Mr. Kanellos is trying to be humorous. But it's pretty clear that AMD is in some financial trouble at the moment. The company's first quarter revenue came in at $1.23 billion, some $370 to $470 million lower than its original projection for first quarter revenue of $1.6 to $1.7 billion, resulting in a $611 million loss. AMD saw the effects of the ATI acquisition, lower demand for desktop PCs and also competition from Intel during the quarter. I believe AMD's senior executives when they described the situation as the company being caught in a perfect storm. (On April 9, I even described it as a perfect storm myself.) 

The question for AMD, now, is how quickly can it set sail and get out of the way of this storm? Right now, it is struggling against Intel's higher-performing Core 2 and Xeon 5x00-series processors. AMD also burned some cash in the quarter, which sparked talk about its cash flow and speculation that it may have to borrow additional money before the end of the year. I still believe that the speed at which AMD can turn itself around is directly related to how quickly it can get its next set of products to market and just how well those chips perform. Barcelona, its first quad-core Opteron server chip, is due out fairly soon and will be shipping in systems in the third quarter. AMD will follow that with dual-core and quad-core desktop chips. The company claims that Barcelona will outperform current Intel quad-core Xeon chips by as much as 50% in floating point performance. If it lives up to those expectations, AMD should have a winner on its hands. After all, it would like to take home more money than Mr. Kanellos will in 2007. Nothing personal, Michael. AMD just wants to be profitable. 

Topic: Processors

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