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AMD posts small loss this quarter

AMD posts small loss this quarter

AMD has been unable to match rival Intel's record quarter, posting a small loss despite increased sales.

Intel might have enjoyed its best quarter ever, but underdog AMD is still struggling to compete - posting a loss, despite increased sales.

In financial figures released by AMD yesterday and quoted by HotHardware, the processor manufacturer showed a 40 percent year-on-year increase in revenue thanks to increased demand for mobile-oriented chips and server parts, and a five percent increase on the first quarter.

Sadly, the good news - which AMD's president Dirk Meyer stated was due to "robust demand for our latest mobile platforms and solid execution," - was tempered by an overall loss due - it is believed - to the company's continuing restructuring work with fab spin-off GlobalFoundries. The costs associated with this have left AMD posting a second quarter loss of $43 million (around £28 million).

While the loss will be a concern to the company's shareholders, the rise in revenue appears to indicate that the long-awaited economic recovery is in full swing - and when taken with Intel's bumper quarter, could offer hope to companies which have been sweating through the credit crunch and waiting for the tech sector to pick up again.

For AMD, however, the figures offer a stark wake-up call: either start saving money, or watch as Intel disappears into the far distance.

Are you pleased to see that the technology sector is starting to recover after the vagaries of the credit crunch, or does the news that AMD posted a loss despite increased revenue fill you with dread for the future of the processor market? Share your thoughts over in the forums.

26 Comments

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Phalanx 16th July 2010, 10:52 Quote
Dear AMD,

When you decide to pull your finger out and make products that can rival Intel's Core-i ranges, then I will consider spending money with you. How about developing your own hyperthreading rival, or perhaps designing a new socket? It's about time surely?

Kind regards,
Ph4lanx (ex-AMD owner)
V3ctor 16th July 2010, 10:52 Quote
What the hell... What about ATi's effort? Doesn't it help?

The GTX460 die is bigger than ATi's 5800 series, but nVidia sells the graphic card at 200€, while ATi sells at 300-400€, the profits on the gpu alone must be enormous.

I just hope that Bulldozer saves them, or I really don't see future in them. It will be like VIA... :/

Is that reorganization of AMD that big?
crazyceo 16th July 2010, 10:54 Quote
I'm sure when the GlobalFoundties was announced, they were looking at a far quicker turnround of running costs and it was actually cheaper to go down that route at the time. Are they not supplying the services to other chip makers as stated originally and worked into the running costs? Maybe that's why it's become a problem, they just aren't pricing the service correctly to get other brands to fabricate with them. This was supposed to be AMD's best hand and clearly it's hasn't paid off. Reading AMD's figures, they have perofrmed really badly profit/loss wise for many years. Serious changes need to be implemented but ultimately the heads need to roll and get some new blood in to wake up this sleeping giant and start making some real money for a change.
Artanix 16th July 2010, 11:02 Quote
Quote:
Originally Posted by Ph4lanx
Dear AMD,

When you decide to pull your finger out and make products that can rival Intel's Core-i ranges, then I will consider spending money with you. How about developing your own hyperthreading rival, or perhaps designing a new socket? It's about time surely?

Kind regards,
Ph4lanx (ex-AMD owner)

Exactly this. I upgraded recently, and at all price points intel had AMD beat, I just couldn't justify having an AMD proc when comparing against an equally priced intel.

However, I did switch to an ATI graphics card too, so its not all doom and gloom for AMD :)
mi1ez 16th July 2010, 11:38 Quote
Quote:
Originally Posted by Ph4lanx
Dear AMD,

When you decide to pull your finger out and make products that can rival Intel's Core-i ranges, then I will consider spending money with you. How about developing your own hyperthreading rival, or perhaps designing a new socket? It's about time surely?

Kind regards,
Ph4lanx (ex-AMD owner)
This you mean?

http://tech.icrontic.com/articles/amd-in-2010-part-2-bulldozer-bobcat-llano/
javaman 16th July 2010, 11:44 Quote
Problem is they have to invest heavily to catch Intel up not only in R&D but PR. They could have super fast chips but if no one knows about them whats the point? All that costs money and intel is a very well oiled PR machine which contributes to their success (Pentium 4/D anyone?). The battle for AMD isn't just as simple as designing a new product, its making sure that in the process they don't sink themselves because they didn't do a good job with what they already had no matter how bad it is and realistically it still good for the "bread and butter" segment of the retail market but it won't pull in the big profits like high end or server side. I say alot of money has been spent in launching and promoting their server range which is where the biggest gains can be found. With Opteron more established maybe they can reap what they've sown over the next year. The new architecture can't arrive soon enough for them tbh. Bulldozer could be another major turning point.
Phalanx 16th July 2010, 11:45 Quote
Why yes, just what I meant! However I could only refer to what they've got out currently in my "letter" ;)
Krayzie_B.o.n.e. 16th July 2010, 12:22 Quote
Sorry AMD as I've faithfully stuck by you even though your CPUs were second class. Well I'm tired of being second class as my next build is definitely going to be Intel (Core i7 950). I can only recommend AMD to people who just "browse the internet" when I build their computers as anyone who needs to do more I say get Intel core whatever

As far as ATI the GTX 460 has me very interested but I think I'll go with a HD 5850 CF set up as the HD 5850 for a few dollars more beats a GTX 460 in the games I like to play.

I hope AMD/ATi new architectures is more on level with Nvidia/Intel as I'm jumping the AMD ship and maybe even ATi.

Myabe bulldozer will bring real competition like the Athlon 64 did waaay back in the day.
rickysio 16th July 2010, 13:20 Quote
DbD 16th July 2010, 15:12 Quote
Tbh this is why many still eventually expect AMD to go bust. Even in the best quarter ever - their DX11 cards ruled the market - they are still making a loss - the same happened in the past when the A64 was the best cpu on the market. Then there's the fact they are well behind or completely missing from new markets (gpu compute, handhelds, 3D, etc) suggesting they aren't aggressively investing for the future and combine that with the huge amount of debt they still have and you wonder if they will still be with us in a few years.

Compare that to Nvidia who's allegedly sold hardly anything and have cards that are far to expensive to make, they have also been locked out of the chipset market by Intel bullying - sure it was a bad quarter for them but they still made a profit.

I don't know what AMD is doing, but it obviously isn't doing it right!
yakyb 16th July 2010, 15:26 Quote
guys correct me if im wrong but
Quote:
he processor manufacturer showed a 40 percent year-on-year increase in revenue

they made more money than before its just that they are reinvesting it all (plus a little bit more)back into the company (GF) hence they made a small loss this year

its like saying, i earned £1500 this month but i bought some new insulation and a more efficient boiler for the house total £1600 so made a loss this month.

also did AMD not announce a few months back they would no longer be competing at the very top end cant find a link anywhere

dont forget they made an absolute boat load on the AMD Intel settlement and this is what they are probably reinvesting
BlackRaven 16th July 2010, 16:32 Quote
I was on the AMD camp for a long long time but now my new build is i7-750.
Sure it was more expensive than the AMD build would have been but only a little.
They will have to come up with better performance and with that get to the same pricing point as Intel.
pearl.of.wisdom 16th July 2010, 17:36 Quote
Personally, I don't think that the future for AMD could be more rosy. Global Foundaries is going from strength to strength; just recently annoucing the introduction of EUV lithography in 2014 ish, more customers then they can sake a stick at, more investment from from aitc [whatever thy're called], ontario is ahead of track if some reports can be believed - and should offer outstanding performance against Atom, the mobile division is finally picking up design wins after bloody years, Llano & Zambezi have both been sampling for months ; Llano a quad core genuine acp part with 480 rv8 series sp's and a max tdp of 57w?! and Zambeizi should put AMD back into the top performing cpu range again; three hugh product launches for the end of the year / early next ; one massively revised ultra low power architecture, one brand new architecture for the high end - who's performance journey only begins in 2011 - and one new finally birthed processing concept that will probably replace the CPU by 2015 or around. What's not to like? Competition, competiton and more of that c word.
knutjb 16th July 2010, 20:40 Quote
What is glaringly missing is that they came in $110M HIGHER than expected. Looking at just the loss is misleading. Please tell the whole story.
l00king 16th July 2010, 23:18 Quote
Wow, so much negativity...

Don't forget AMD is one-twentieth the size of Intel, so I am sure that them not having an offering that competes with the Core i series is not due to them having their finger up their ass.

More to the point, there are lots of reasons to like AMD in the mainstream segment. Their value for money is great. You don't need to buy a new motherboard each time you upgrade your processor and their motherboards in general are cheaper. Yeah, the gaming crowd is up-in-arms cause AMD gets blown away in the benchmarks, but when it comes to real world usage they hold their own very well.

There's lots of people who don't game, and just want a processor that will be reasonably quick at a reasonable price, and for that group AMD does just fine.

And guess what, AMD's stock is up 88% year over year vs. 13% for Intel. As much as AMD would like to win over the hearts and minds of the enthusiast crowd, they will do just fine catering to the budget market.
crazyceo 17th July 2010, 04:06 Quote
Quote:
Originally Posted by pearl.of.wisdom
Personally, I don't think that the future for AMD could be more rosy. Global Foundaries is going from strength to strength; just recently annoucing the introduction of EUV lithography in 2014 ish, more customers then they can sake a stick at, more investment from from aitc [whatever thy're called], ontario is ahead of track if some reports can be believed - and should offer outstanding performance against Atom, the mobile division is finally picking up design wins after bloody years, Llano & Zambezi have both been sampling for months ; Llano a quad core genuine acp part with 480 rv8 series sp's and a max tdp of 57w?! and Zambeizi should put AMD back into the top performing cpu range again; three hugh product launches for the end of the year / early next ; one massively revised ultra low power architecture, one brand new architecture for the high end - who's performance journey only begins in 2011 - and one new finally birthed processing concept that will probably replace the CPU by 2015 or around. What's not to like? Competition, competiton and more of that c word.

But that is all if's and but's which have Intel and Nvidia breathing down it's neck in every department. AMD cannot fight on every front any longer. The Global Foundary was supposed to be bringing in the cash now and it isn't. It has priced itself out of the competition with other brands going elsewhere. I no longer feel they can say "but the ATi division is holding itself up" when the figures show although it made profits in their best quarter it was well below expectations.

A clean sweep at the top is the first drastic action needed. New and fresh thinking, even headhunt from the competition since the competition has been doing so well.

What doesn't help AMD in anyway is their unforgivable PR/Marketing department. We have had even on this site interviews and statements about products and the competitions products that when scrutinised just don't stand up at all. That's just misleading the very people they should be trying to keep hold of. Fanboyism aside, just in this very few in the topic so far have come forward as clear AMD fans who are just sick and tired of being promised the next big thing but then let down after they have soent their hard earned cash. It's not just the odd product either, it's the whole stable.

Yes one or two products can hold their heads up but the competition is already all over them in price, performance and quality.

AMD need to change now or I am truly sorry to say we may not see it lasting any longer. Look at any industry in the world today and you will see big players going under, companies who have been running for decades, centuries. Is this industry any different? Can it save one of it's biggest players?

I hope so.
leexgx 17th July 2010, 04:47 Quote
Chipset side
seem perfect to me allways loved AMD motherboards (the Asus M4A3200 barebone case comes with basically every thing {Esata/firewire - Display Port,DVI,HDMI,VGA - 4 USB ports on the front 6 on the back and an card reader }But no USB3 yet, never knew you could fit so much into an backplate for just £90

GPU side
if AMD could sort out there drivers for the ATI cards (and fix the noise issues coming from the video card when under load) i would buy them (last 5850 i got was the worst sound i have ever heard coming from an video card before yes my GTX480 does it but only if i put my head next to it, anti post > Fan noise and heat is Overdone no different from my older GTX280 or i say its dam right more quieter then my 9800GX2) Drivers NEED to be working every realse not 6 months later and please revert back to XP classic CCC as the New CCC under vista or higher is anoying as you have to click for more times to find what your looking for, Currant issue now is CF page will not even Show in CCC, Hardware info page in CCC says its disabled when its NOT so most likey going to ebay the 2 4850 cards and get an GTX460 or single 5850 (not up to me as its not my system)
why i not norm buy ATI video cards as there cards are good (not perfect Noise issues) but drivers are unpredictable


CPU side
need to fix the heat issues with the Phenoms they just run to hot under load and require big heatsink or get motherboard to Fix there BIOS to supply the correct voltage (seem to over volt by 0.15v in most cases as they seem to run quite happy at 1.2-1.25v)
Lazy_Amp 17th July 2010, 06:09 Quote
Quote:
As part of the results, AMD reported a $120 million equity loss related to its manufacturing spinoff, GlobalFoundries. Excluding that loss and some other items, AMD would have reported a profit on a non-GAAP basis of $83 million.

http://www.businessweek.com/idg/2010-07-15/amd-s-profitable-streak-ends-with-net-loss-in-q2.html

Yeah, it is a bit unfortunate, but it's not all bad news.

Bobcat/Ontario is what to focus on here, pushed up to this year. A low power dual core with integrated GPU (not some good for nothing Intel GPU either), this is the nail in Atom's coffin, thank god. I'm excited finally for a netbook with actual guts, one that can run HD video and even games no problem. Since it's on track for release before Christmas, sure to see excellent sales from that.

Sorry that there's not an enthusiast part ready for you guys, but realistically, companies make their profit off of the Mainstream and the Server markets.
Goty 17th July 2010, 07:21 Quote
Quote:
Originally Posted by pearl.of.wisdom
Personally, I don't think that the future for AMD could be more rosy. Global Foundaries is going from strength to strength; just recently annoucing the introduction of EUV lithography in 2014 ish, more customers then they can sake a stick at, more investment from from aitc [whatever thy're called], ontario is ahead of track if some reports can be believed - and should offer outstanding performance against Atom, the mobile division is finally picking up design wins after bloody years, Llano & Zambezi have both been sampling for months ; Llano a quad core genuine acp part with 480 rv8 series sp's and a max tdp of 57w?! and Zambeizi should put AMD back into the top performing cpu range again; three hugh product launches for the end of the year / early next ; one massively revised ultra low power architecture, one brand new architecture for the high end - who's performance journey only begins in 2011 - and one new finally birthed processing concept that will probably replace the CPU by 2015 or around. What's not to like? Competition, competiton and more of that c word.

Haven't you heard? It's cool to bash AMD again.
pearl.of.wisdom 19th July 2010, 17:11 Quote
'Scuse me, I must have missed the memo ; there was a time when it wasn'tcool to bash AMD?
crazyceo 19th July 2010, 21:22 Quote
Quote:
Originally Posted by pearl.of.wisdom
'Scuse me, I must have missed the memo ; there was a time when it wasn'tcool to bash AMD?

But was such a long time ago now, the years of bad performances just seem to roll into one big cool bash against them.
crazyceo 20th July 2010, 08:27 Quote
Quote:
Originally Posted by himaro
I'm suprised by this, the ATI part of AMD is selling like wildfire because of the fails of Nvidia. It's a shame.

but even with Nvidia's "fails" they still manage a pretty decent profit. Something even in it's best earning quarter AMD cannot seem to do!
Action_Parsnip 20th July 2010, 20:01 Quote
Is this the kind of loss where depreciation of assets and one-off charges were to blame? or was it an operating loss kind of ....loss.

Lol at the recent upgraders. Enjoy your lack of an upgrade path. Seriously being an ass-hat aside, next year offers some much more exciting things.
l00king 20th July 2010, 21:47 Quote
It's all about the spin. Tom's Hardware in the U.S. told this same story in a more positive light, and the forum comments were a lot more positive: http://www.tomshardware.com/news/financials-globalfoundries-sale-radeon-phenom,10881.html
Xini 21st July 2010, 21:20 Quote
Hmm the press say buy intel, the market buys intel and shoves it in everything, then people exclaim that AMD are making losses and why don't they just improve things....

Sounds like a fundamental lack of understanding of marketing and how companies makes money. In other words, if no one buys their chips cause everyone says that Intel is better then they have no money to make better chips and even less motivation. Not everyone is motivated by being told their useless.

Besides, I used to have a Q6600 and I researched it and bought an AMD965BE cause at the same performance point Intel were significantly more expensive and any performance difference they were pulling in separate tests seemed inadequate to reason the extra cash (hence how I bought a 5770 for a 24" monitor and yeah it runs everything perfect ta). Personally I spent money on bottle necks rather than headline items.

Anyhow the point being that the press will tell you that Intel chips are faster and all the jive going on about them, what they don't tell you is the perceptible difference if you're not benchmarking the processor. I'd reckon that the actual end user difference is a whole lot less than people make out.
Yslen 26th July 2010, 11:10 Quote
So they make a ton of money from great sales and immediately invest it in developing future products and restructuring the company to make it more efficient... how's that a bad thing? If they'd sat on their behinds and watched the money come in they'd have made a profit, but what they've done is far more sensible.
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