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AMD now worth less than it paid for ATI

AMD now worth less than it paid for ATI

AMD reached its lowest share price for more than four years last week and, as a result, its market value dropped to US$5 billion – more than $400 million less than it paid for ATI in July 2006.

AMD reached its lowest share price for more than four years last week and, as a result, its market value dropped to around US$5 billion – that's $400 million less than it paid for ATI in July 2006.

Intel, AMD’s major competitor in the CPU business, has been on a roll for the past 18 months and is now worth around US$162 billion, which makes the chip giant more than 32 times the size of AMD in monetary terms.

Even worse for AMD is that its partner-cum-archrival, Nvidia, has a market cap of around $19 billion, which makes it almost four times as valuable as the struggling platform company.

It’s fair to say things haven’t been going well for AMD since the middle of last year, as its two major rivals launched products that remain largely uncontested even today. Neither the Core 2 Extreme QX6700 nor the GeForce 8800 GTX have been truly surpassed in terms of performance yet and it’s not going to happen until next year.

There are no two ways about it: the Phenom launch was a disappointment. This was largely down to the fact that the company found an erratum in the L3 cache Translation Lookup Buffer, which could cause serious system instabilities in certain scenarios and it prevented the company from launching a 2.4GHz Phenom CPU at the eleventh. AMD issued a TLB fix to motherboard manufacturers to implement into their BIOSes and when the results for the TLB fix came out, it wasn’t pretty.

This wasn’t all that disappointed us about the Phenom launch though, as AMD also prevented all but a select few publications from running their own independent benchmarks on the new CPUs before the launch. I don’t think there was any malice in that choice personally, but it didn’t really help AMD’s street cred when, come launch day, reviews were few and far between.

It’s not all doom and gloom though, because I consider the Radeon HD 3800-series’ launch to have been a success, even though there is a shortage of hardware in the channel at the moment.

Let’s hope that AMD’s fortunes in 2008 change for the better because as an industry we need AMD to continue to innovate and deliver great choice to consumers. In recent times, we wouldn’t have had great products like the GeForce 8800 and Core 2, if it wasn' for AMD's forward-thinking innovations like the Athlon 64 and Radeon X1900-series, which were class leading products at their time of introduction (and continued to be class-leading for much of their lives).

Do you have a thought on AMD's current situation? Share it with us in the forums.

27 Comments

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DarkLord7854 10th December 2007, 08:30 Quote
Heh.
oasked 10th December 2007, 08:40 Quote
Oh dear. I do hope they can make a recovery. If they go down the pan the IT industry is screwed - Intel can charge whatever it likes.
BlackMage23 10th December 2007, 09:00 Quote
Intel can't let AMD go down because then it has a monopoly on the market, which could be a bigger headache for them then having AMD around.
Goverment - Monopoly = Bad
Breach 10th December 2007, 09:08 Quote
I dunno, seems like AMD has been in Intel's shadow since AMD's founding. But in the CPU market it has struck at the core of Intel with better processors until Core 2 came out.

Granted, the numbers seem wide. But remember that AMD just makes CPUs and now GPUs. Intel powers much, much more than just computers, where AMDs market is much more narrow. Intel makes much much more than just CPUs. AMD does not.

Not trying to be a fanboy by any means. I have used AMD for a long time now. They have until now given competitive power against higher priced Intel offerings. The merger cost them a lot, in the end with 1/2 the GPU market in their hands they could in time be quite a force. In the end I go with whatever is best at the time. Though I do like choice, I hope AMD doesn't throw in the towel.
DougEdey 10th December 2007, 09:14 Quote
AMD are investing too much in new untried technologies and getting very poor returns in terms of performance.
WilHarris 10th December 2007, 09:46 Quote
AMD: now worth 1/3rd of Facebook (roughly founder Mark Zuckerberg's entire share). Awesome.
Angleus 10th December 2007, 11:03 Quote
Hopefully its just a cyclical thing, and maybe one day they will release a new CPU thats at least AS good as C2D
DXR_13KE 10th December 2007, 11:34 Quote
if they sink we are screwed.....
Boogle 10th December 2007, 13:47 Quote
Quote:
Originally Posted by Breach
I dunno, seems like AMD has been in Intel's shadow since AMD's founding. But in the CPU market it has struck at the core of Intel with better processors until Core 2 came out.

Not neccesarily, until the first Athlon, AMD released almost direct clones of the Intel CPUs, often cheaper, but also slower. Arguably it wasn't until the Athlon 64 that AMD had a decisive advantage over Intel.

In my opinion, Intel won't let AMD sink. Intel haven't exactly been persuing the budget area agressively, leaving AMD a valuable niche, the very same niche AMD have always traditionaly filled. Intel have been targeting the top-end though, making it clear they are the market leader. AMD may not become super-powerful again, but they will certainly still be around.

NV also haven't aggressively targetted ATI, the 8800 hasn't exactly had much of a follow-up since it's launch. No company wants to lose the other, simply because then they would become a monopoly and that's far worse than having a competitor because then the government steps in and destroys your company.
mutznutz 10th December 2007, 15:28 Quote
They should have a scheme similar to the one laptop per child .. buy one AMD processor, give another away ... just to help them out

I'd hate to see AMD go ... I was hoping phenom would be good enough to get them out of the funk they're in ... ahh well
mrplow 10th December 2007, 15:37 Quote
Ummm... just because their share price is crap doesn't [yet] mean the company is doomed, calm down people.
knuck 10th December 2007, 16:48 Quote
Quote:
Originally Posted by WilHarris
AMD: now worth 1/3rd of Facebook (roughly founder Mark Zuckerberg's entire share). Awesome.

whattttttttttt that is just insane ... (!)
julianmartin 10th December 2007, 17:49 Quote
time to invest ladies......
Otis1337 10th December 2007, 18:27 Quote
Quote:
Originally Posted by DXR_13KE
if they sink we are screwed.....

yep we are........ IBM / VIO CPU F-T-W!!!! and SIS graphics all the way!!!!!!
ryanjleng 10th December 2007, 19:23 Quote
Not sure about you guys,

but i am waiting for a further dip in AMD shares after quad-core starts appearing in the middle product range... before purchasing a "chunk" of AMD shares. AMD gross margins for key products will be hit pretty hard in the next 12 months.

Best time to buy is coming up i think.

What is interesting is not the current or soon-to-be available CPUs, but something else in 12-18 months time in the area of DDR3.
completemadness 10th December 2007, 20:33 Quote
Quote:
Originally Posted by WilHarris
AMD: now worth 1/3rd of Facebook (roughly founder Mark Zuckerberg's entire share). Awesome.
Ouch ....
Rebourne 10th December 2007, 21:00 Quote
Well if you want to keep them around, buy their products.
Otis1337 10th December 2007, 23:50 Quote
Quote:
Originally Posted by Rebourne
Well if you want to keep them around, buy their products.


but their products suck.............
kempez 10th December 2007, 23:54 Quote
Quote:
Originally Posted by Otis1337
but their products suck.............

They do not suck. OK they're not up to Intel performance (yet he says with his fingers crossed), but they don't "suck" by a long margin.

AMD die = very bad for the industry
notatoad 11th December 2007, 00:21 Quote
maybe i'll buy a 3870. you know, just to be charitable.
Mentai 11th December 2007, 02:44 Quote
Quote:
Originally Posted by supertoad
maybe i'll buy a 3870. you know, just to be charitable.

Haha I was thinking of doing the same, since you can't get 8800GT's at a reasonable price anyway...
Woodstock 11th December 2007, 03:20 Quote
i would go for 3870 when i upgrade but there more expensive then a 8800gt hear in nz
Amon 11th December 2007, 04:34 Quote
http://img.photobucket.com/albums/v160/ZechsSetsunakute/Ruby.jpg
*caresses Ruby* Don't worry, love. You're gonna make it...

uh I mean... :(
knuck 11th December 2007, 04:37 Quote
in a mud fight, Ruby would kick all the nVidia techno-demo chicks :D
t. arcane 11th December 2007, 07:15 Quote
I don't get why their market share is hitting the bottom, like that. If you look at many retail sellers of complete systemts, thair usually have a wide selection of AMD equipped products.

Here (Denmark), a laptop is more usually sold with an AMD CPU rather than Intel Centrino.
Woodstock 11th December 2007, 07:25 Quote
Quote:
Originally Posted by t. arcane
I don't get why their market share is hitting the bottom, like that. If you look at many retail sellers of complete systemts, thair usually have a wide selection of AMD equipped products.

Here (Denmark), a laptop is more usually sold with an AMD CPU rather than Intel Centrino.


no offence that is just one country, it doesn't mean its the same in every. For example hear in nz intel have more product selection in laptops
sinizterguy 11th December 2007, 07:36 Quote
Quote:
Originally Posted by kempez
They do not suck. OK they're not up to Intel performance (yet he says with his fingers crossed), but they don't "suck" by a long margin.

AMD die = very bad for the industry

Let's see ... There is two products competing for your money. One is decisively better. So, the second one does suck.
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