AMD needs answers for Intel's server onslaught
One of the first things the new CEO of AMD will have to tackle is the chipmaker's standing in the server processor race.
As AMD reported its fourth quarter results---the company reported an in line quarter with better-than-expected earnings of 14 cents a share on revenue of $1.65 billion---it became clear that Intel put the hurt on its smaller rival in the data center.
Analysts noted that AMD had trouble maintaining average selling prices for server chips. Intel's quarter was powered by server processor pricing.
Interim CEO Thomas Seifert replied:
I'm not going to make a secret out of it that we were disappointed with our performance in this segment in the fourth quarter. This is one of the areas where we see significant room for improvement, and that's one of the areas I would like to refer to when we talk about picking up the pace. We think we have a good product portfolio in place, but we have to work on our go-to-market strategies, and this will be one of the emphases moving forward.
Indeed, AMD, which didn't comment on the departure of Dirk Meyer, has a bevy of uncertainties ahead. The company needs to answer the server question, needs to show traction with its Fusion platform and needs an answer for tablets. Simply put, AMD can focus on execution right now---something executives reiterated constantly---but the new CEO will have to address some big questions.
Here are some of the key quotes from AMD's call.
On tablets, Rick Bergman said:
Tablets present a wonderful opportunity for AMD. I've been in the PC industry 20-plus years. We've really struggled to get into the living room, and it's clear that tablets are finding their way into the living room, a real consumer experience. And as consumers start to utilize these tablets, they start to demand a better end user experience, which invariably means processing power, incredible graphics, and credible video. We are seeing a number of design win opportunities for us. As we develop new products in that category, we will account for those new trends and the new market opportunities.
On potential market share for the Fusion platform, Seifert said:
We are not going to provide any market share projections at this point in time. However, I think you can read and hear the excitement we feel for that product and the momentum we have generated. So we feel confident to gain significant market share in this segment with this platform. And this ultimately will be reflected in the shipment numbers and in the ramp numbers.
On the CEO search, Seifert said:
The search is obviously a priority, and the committee is moving the process forward to ensure that we select a person with the right vision, experience and track record to lead AMD into the future and to create increased shareholder value over time. While we don't plan on communicating further until the search process is concluded, we will update you, should events warrant.