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AMD's revenue decimated by poor demand

AMD's revenue decimated by poor demand

Lower than expected demand for AMD's products and a slow market in general have been blamed for a massive 10 per cent quarter-on-quarter drop in revenue.

AMD's latest financial results demonstrate just how much the company needs its latest Trinity accelerated processing units (APUs) to be a success: the company's revenue has dropped by 10 per cent quarter on quarter.

While the company had warned its investors that a dip was on the way, it drastically underestimated the extent of the problem: rather than the predicted one per cent revenue drop, the company's third quarter revenues are down 10 per cent compared to the previous quarter.

It's not just revenue, either. Margin - the profit made on each sale - is down to around 31 per cent, from a forecast 44 per cent. Although belt-tightening measures at the company helped trim operating costs by 7 per cent quarter-on-quarter, it's clear that something significantly more drastic is required to keep its investors on-side.

AMD has put the blame for the significant shortfall on a general slowdown in the market - with many people who would normally be buying new computers waiting for the release of Windows 8 later this month - along with a drop in demand for selected products. This latter gave AMD a serious hit to its margins, with an estimated $100 million inventory written down - suggesting AMD produced hardware on a volume which significantly exceeded demand.

Since announcing the results, investors have reacted surprisingly positively: although pre-market trading saw the company's stock drop by 8.13 per cent, it has since recovered to $3.20 per share - just $0.05 below its ending price on Tuesday.

The company can't rely on the generosity of investors for long, however. AMD is going to have to prove itself in the next quarter - which means further cost-cutting measures, smarter production schedules and a big push for its latest budget- to mid-range Trinity APU chips.

39 Comments

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Phalanx 12th October 2012, 12:46 Quote
"Slowdown in the market" my ass. Make a decent product and stop whining like a little child, AMD!
wafflesomd 12th October 2012, 12:48 Quote
Quote:
Originally Posted by Phalanx
"Slowdown in the market" my ass. Make a decent product and stop whining like a little child, AMD!

I really like the APU's they've put out so far :(
TheDodoKiller 12th October 2012, 12:50 Quote
I'm guessing AMD thought that Bulldozer would be the be all and end all, and it's not. Oh well. Maybe this will persuade their shareholders to try and get the company to design something worthwhile.

Anyway, didn't they get that guy from Intel that was good at drawing processors or something?
Dave Lister 12th October 2012, 12:52 Quote
Maybe it's time they went back to one of their older more successful chips and reworked it. Isn't that what intel did when they were being slated for the P4 ?
greigaitken 12th October 2012, 12:56 Quote
a rare correct use of decimated. usually its used instead of obliterated.
Gareth Halfacree 12th October 2012, 13:02 Quote
Quote:
Originally Posted by greigaitken
a rare correct use of decimated. usually its used instead of obliterated.
You have no idea how pleased I was that the drop was ten per cent on the button. Decimated is such a good word, but I refuse to use it unless I can use it literally.
Snips 12th October 2012, 13:59 Quote
"Maybe" "If only" "We need AMD as competition for Intel" "best bang for buck" "AMD64 beat P4" "When (insert tough name here) comes out, it will trounce Intel"

How many times will we all say the above in an AMD topic about them being crap?

Stick a fork in them, they're done!

Would the arguement now be for ARM to be Intel's nearest rival?
fix-the-spade 12th October 2012, 14:25 Quote
Possibly Snips, although ARM's big problem is that they don't manufacture anything themselves, being a pure design company really hurts their income and investment power. I can't see them truly competing with Intel long term (as in 10+ years from now).
.
I think AMD's circling the drain as far as retail CPUs go. It's impossible to justify and FX chip when an i5 is faster across the board, cheaper and uses less power all at once.

Now if they took the FM2 set up to higher performance levels that would be interesting. Quad/hex core processor and a 78xx graphics chip? A true all in one chip for the high end would be interesting. Although I shudder to think of the tdp...
Shirty 12th October 2012, 14:26 Quote
Decimated is such a brutal word.
CAT-THE-FIFTH 12th October 2012, 15:55 Quote
It seems the PC market is starting to slow down:

http://www.telegraph.co.uk/technology/9601247/PC-market-to-shrink-for-first-time-in-a-decade.html

It seems even Intel is not immune from this:

http://newsroom.intel.com/community/intel_newsroom/blog/2012/09/07/intel-lowers-third-quarter-revenue-outlook

"Intel Corporation today announced that third-quarter revenue is expected to be below the company's previous outlook as a result of weaker than expected demand in a challenging macroeconomic environment. The company now expects third-quarter revenue to be $13.2 billion, plus or minus $300 million, compared to the previous expectation of $13.8 billion to $14.8 billion."

If the juggernaut which is Intel is having lower sales than expected,then a much smaller company like AMD is hardly likely to be able to do any better IMHO.
DaBigDog 12th October 2012, 16:08 Quote
Realistically the Llano and Trinity CPU's are perfect for the majority of consumers, now whether it's because people are so used to buying Intel or AMD are not getting into the reseller/builder market with the right support structures I can't tell.
I didn't hear that much about shortages in production and an inventory write down of $100m says they have plenty of stock so where are all these desktops and notebooks ?
I've been looking to buy an A8-3870 desktop for a friend (will wait for A10 now) and there are very few choices out there and quite a few of them are overpriced looking at the component costs. Unless you specifically look hard for and AMD unit - you are just not going to find one, it's like AMD are giving the business to Intel....
.//TuNdRa 12th October 2012, 17:01 Quote
It's down to a few simple factors; Less processors/computers are being bought at the second. Ergo; Less money going towards AMD and Intel, Secondly; AMD really needs to pull something out of the bag.

Do what Intel did with the Core2's; Pull out something impossibly good and walk all over Intel for a generation. That's all that will save AMD from continually loosing market share if this keeps up. FX was a big, brave idea and if they fix the bugs in it (Including the hideous memory controller issues); It'll be much better for it, but they needed that back at launch, i'm afraid it'll be too little too late if this keeps up.
Guinevere 12th October 2012, 17:42 Quote
Quote:
Originally Posted by greigaitken
a rare correct use of decimated. usually its used instead of obliterated.

Definitely the correct use if you're living in fear of an advancing Roman legion but here and now in 21st century, it's wrong more often than it's right. (But it does depend on which dictionary you use)

The 'historic' usage does indeed mean to put one in ten to death, but the correct modern usage is to remove a large portion of something, or reduce the strength or effectiveness of something.

"Their striker decimated the opposing teams defence" means the defence was outplayed. It doesn't mean a tenth of them were run through with a Roman Spatha.

"In the year 18 the legionaries of third legion Augusta were decimated under orders of Lucius Apronius" means that one in ten were killed by their new commander.

There exists an educated cross section of people who bring out their definition of decimation as an act of linguistic oneupmanship. I know this because I used to do it myself - getting annoyed when I heard 'incorrect' usage of the word.

The trouble is... and this really annoyed me when I found this out... it's not actually correct. It's wrong to criticise those that use decimation to mean something other than to kill one in ten.

Like many many words decimation has a historic meaning and a modern meaning and the modern meaning has been in use for quite a long time. Some dictionaries use the term 'obsolete' to define the ancient usage.

http://oxforddictionaries.com/definition/english/decimate
http://dictionary.cambridge.org/dictionary/british/decimate
http://dictionary.reference.com/browse/decimate
http://vocabulary-vocabulary.com/dictionary/decimate.php
http://www.collinsdictionary.com/dictionary/english/decimate
http://www.thefreedictionary.com/decimated
http://en.wiktionary.org/wiki/decimate
http://www.vocabulary.com/dictionary/decimate
http://www.macmillandictionary.com/dictionary/british/decimate

In fairness Websters still lists the historic / obsolete definition above the more recent usage.... so maybe I will start going back to telling people they're using it wrong after all.

http://www.merriam-webster.com/dictionary/decimate

My terrible sporting example is unfortunately a typical example of the modern 'correct' usage of the word. I'd be much happier if we kept 'decimation' to the historic meaning which means to punish by killing one on ten.

So you can't decimate financial figures... but you could decimate political figures for messing up the countries financial figures.
Donteatmypanda 12th October 2012, 17:52 Quote
Back in 2009 was really pleased with my phenom ii x4955be for all-round gaming joy. I was going to buy an intel processor at the time but when pushed for costs then chose to go amd after reading the reviews here.
Their push for am3 board & ddr3 offered noticeable smoother performance all round when compared to my friend's older intel cpus at that time and felt proud for a moment or two until all my pc gaming chums went to i7 chips! Since then its hardly been that tempting to continue with amd when scanning through the benchmarks on this site and others - was so disappointed when I read the first bulldozer reviews so lets agree the proof is in the pudding and 2009 was a ways back so come on amd show me the pc gamer chip 2013!
Phalanx 12th October 2012, 17:54 Quote
Quote:
Originally Posted by Guinevere
*snip*

Wow. Just... Wow.

(That's not in awe, by the way.)
rollo 12th October 2012, 18:25 Quote
Im surprised one of the major players have not brought AMD out by now. Would not cost alot to buy the shares. Samsung, Apple could both use the proccessing plants if both plans to move into there own chips come to pass.
billysielu 12th October 2012, 19:21 Quote
tip: stop making products we don't need/want
towelie 12th October 2012, 19:50 Quote
Hang in there AMD you still have purpose in this world god forbid Intel owning 100% of the market
SexyHyde 12th October 2012, 20:41 Quote
The FM2 chips look to rule everything under the i5 which is a good achievement when you look at what they have been through and what they have to work with. I think AMDs chance of getting on par with Intel will take 5-10 years if ever. Having them put out a high end chip that beats Intel is is nigh on impossible.

All you language snobs need to realise language is in constant evolution with dictionaries logging new words and changed meaning after they have gained popular usage.
play_boy_2000 12th October 2012, 22:18 Quote
I think part of the problem is that PC technology has evolved to the point that upgrades don't really seem necissary for your average home/office user anymore. The other 2 computers in my house that are heavily used are both 45nm core2duo's @ 3.0-3.5Ghz (OC'd, just because I can) and I have no intention of replacing them anytime soon.

The only saving grace is that SSD's still arn't standard kit in your average dell/lenovo/acer PC.
Guinevere 12th October 2012, 23:36 Quote
Quote:
Originally Posted by Phalanx
(That's not in awe, by the way.)

http://xkcd.com/386/
dicobalt 12th October 2012, 23:43 Quote
The problem? AMD made a server CPU then put that CPU in laptops. Strategy fail.
ssj12 13th October 2012, 02:40 Quote
You think this is bad news; try this http://www.nordichardware.com/news/71-graphics/46718-eu-cripples-future-graphics-cards-exclusive-.html

The EU is killing the graphics market with their changes.. AMD could suffer much worse in the future because of new legislation.
javaman 13th October 2012, 03:02 Quote
AMD need to work on an arm alternative with their GPU bolted on. It would be a more effective way until software catches up with APU's on x86. How many things have came out since quick sync for intel for example? Do a Nvidia and take the bull by the horns and design your own products or use arm to enhance processor design and focus on the area your good at, graphics.
SirFur 13th October 2012, 18:10 Quote
Quote:
Originally Posted by Guinevere
http://xkcd.com/386/

LOL!! That's awesome...I love it!
IvanIvanovich 13th October 2012, 18:14 Quote
If AMD dosen't get something worthwhile in the CPU side soon, they will end up like VIA. The only thing saving AMD is the graphics division at this point. They were defineatly wise to have bought ATI, otherwise who knows how bad off they would be right now.
AMD can compete at the low end against Atom, but after that it's no contest. Lets be honest here. For those that integrated graphics are good enough, the HD3000/4000 graphics are good enough, but with a much faster and more effiecient cpu that is less power hungry and cooler running. AMD has also failed on pricing too, with not enough margin of lower cost compared to intel to sway the buyer in the mid range. In the top range they have already given up even trying to compete against intel at all.
ChaosDefinesOrder 13th October 2012, 19:45 Quote
Quote:
Originally Posted by ssj12
You think this is bad news; try this http://www.nordichardware.com/news/71-graphics/46718-eu-cripples-future-graphics-cards-exclusive-.html

The EU is killing the graphics market with their changes.. AMD could suffer much worse in the future because of new legislation.

hang on, did I just read that right; the EU have started the ball rolling on legislation to cap GPU performance? It looked to me like "if your GPU is above this bandwidth, you can't sell it" and this limit is only slightly higher than current cards?
SMIFFYDUDE 13th October 2012, 21:43 Quote
I didn't come for the article but whether or not 'decimated' was used correctly.
ssj12 13th October 2012, 22:15 Quote
Quote:
Originally Posted by ChaosDefinesOrder
Quote:
Originally Posted by ssj12
You think this is bad news; try this http://www.nordichardware.com/news/71-graphics/46718-eu-cripples-future-graphics-cards-exclusive-.html

The EU is killing the graphics market with their changes.. AMD could suffer much worse in the future because of new legislation.

hang on, did I just read that right; the EU have started the ball rolling on legislation to cap GPU performance? It looked to me like "if your GPU is above this bandwidth, you can't sell it" and this limit is only slightly higher than current cards?

yes, you did read that right.
Gradius 13th October 2012, 23:40 Quote
Global crysis!
dolphie 14th October 2012, 03:29 Quote
I don't like hearing about bad things happening to AMD. Because without them, we are screwed. Imagine how much Intel CPU's and nVidia graphics cards will cost if they had no competition.

ssj12 14th October 2012, 04:07 Quote
Quote:
Originally Posted by dolphie
I don't like hearing about bad things happening to AMD. Because without them, we are screwed. Imagine how much Intel CPU's and nVidia graphics cards will cost if they had no competition.

read the linked article i linked to and both intel and nvidia are both cursing as much as AMD is.
siliconfanatic 14th October 2012, 21:42 Quote
i may be an intel/nvidia follower, but i agree. amd is good for a least one thing to me: keeping the giants prices down.
Kovoet 14th October 2012, 21:53 Quote
Not good news. Always been a a red card fan

Sent from my Nexus 7 using Tapatalk 2
Griffter 15th October 2012, 09:31 Quote
maybe the investors are positive cos they know amd chips are in xbox720 and or ps4 as the rumors would tell us.... food for thought. so they will get their money
javaman 15th October 2012, 16:43 Quote
Quote:
Originally Posted by Griffter
maybe the investors are positive cos they know amd chips are in xbox720 and or ps4 as the rumors would tell us.... food for thought. so they will get their money

Are those designs not sold for a one off payment meaning AMD doesn't get a continuous revenue stream?
LennyRhys 15th October 2012, 17:42 Quote
Quote:
Originally Posted by rollo
Im surprised one of the major players have not brought AMD out by now. Would not cost alot to buy the shares. Samsung, Apple could both use the proccessing plants if both plans to move into there own chips come to pass.

AMD should invest in Intel shares - they'd probably get a higher return that way. :D
l3v1ck 16th October 2012, 09:30 Quote
Poor CPU's = poor demand. Simples.
Tyinsar 16th October 2012, 19:54 Quote
Where are all the ITX boards for these?
ITX motherboard with MSATA = very compact & capable system. 150W is near the peak of what the bricks for pico-PSUs can supply but it is possible.

I thought that was the point of APUs but mainly I see ATX & MATX boards. :(
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