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AMD Suffers 'Major Setback,' Losses of Another Half-Billion Dollars

By Scott M. Fulton, III, BetaNews

April 19, 2007, 5:21 PM

In what AMD President and COO Dirk Meyer called a "major setback in the strategic transformation of our company," AMD posted an historic loss for a microprocessor company, admitting an "unacceptable" hemorrhage of $504 million for the first quarter of this year, on revenue of $1.23 billion - a 7% drop annually, and a 30% drop over the previous quarter.

CPU shipments were down in all segments for the quarter, very sharply, with gross margin plunging to an abysmal 31%. AMD had already reported a $529 million loss in the fourth quarter of 2006.

At the start of its quarterly earnings report to analysts, Meyer stated the key to healing his company will be to accelerate its shift to the 65 nm lithography process, while at the same time slowing the transition of one of its fabrication facilities to 200 mm - one of its lower priority production form factors. The company will also accelerate its efforts to produce its new ATI 600 graphics card series next month. "Our customers want us to win," Meyer said.

Click here for new details on AMD's challenges ahead.

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By CarLox

posted Apr 23, 2007 - 7:58 PM

hey you should read this bullsh!t http://www.winbeta.org/c...php?id=7021&catid=1

Score: 0

By ce la vie

posted Apr 23, 2007 - 6:39 PM

there are sooooooooo many egos at amd, i don't know where to start.

Score: 0

By stubbo

edited Apr 20, 2007 - 10:35 AM

But we must have a real competitor to Intel otherwise we end up getting shafted on prices if they have no competition.

AMD must find a way to be competitive again or we all loose.

Score: 0

By burfadel

posted Apr 21, 2007 - 5:41 AM

The problem with AMD is not completely to do with the company itself. Intel has got the name, and the company that has the name is usually the one that succeeds, regardless of whether it has the better item or not.

My case point is the Athlon 64 vs Pentium 4. The Athlon 64 was cheaper and much faster than the Pentium 4, and was advertised, but people will insist on buying one thing (Intel) regardless of the other options.

I know someone who was in charge of selecting computers for an organisation that required several hundred, most of which would be for word processing but with some processing required as well. He opted for a Celeron based system which cost the same as a lower end Athlon 64 system. They did buy one Athlon 64 system because one of the head persons insisted on having one... The problem is that most of these computers, although not that old, can't do half the stuff they're required to do. The athlon 64 system is over-used for those purposes. When questioned the person who bought the computers still insists the Celerons are better and faster just because they're Intel. This is despite the fact that the superior performance of the Athlon 64 is staring him right in the face!

This is common amongst people. I'm not saying people should be anti-Intel, or anti-Amd, or anti-Nvidia or anti-ATI (AMD, lol), but what people should be doing is buying what best and best suited at the time.

Video cards are a little different, there seems to be less people that are insistent on one brand that another.

AMD needs to stay at the forefront after their next processor release. It sounds interesting and I hope the new processor has SSSE3 and SSE4 instructions as well.

SSSE3 is an additional subset to SSE3, and I have heard from some people that the benefits of SSSE3 are greater than that of SSE3 due to the usefulness of the extra instructions.

SSE4 is supposed to be a great leap forward with the SSE instructions, and with a DIVX 6.6 beta test recently done (look it up!) is supposedly halved the processing time!

Score: 0

By kashin

posted Apr 21, 2007 - 1:25 AM

I sure hope AMD recovers, and soon. I would really hate to see Intel regain their full blown monopoly and drive prices back up. When nobody's competing with Intel head on, they get lazy and stop innovating. It's great to see their Core Duo finally being a decent chip that doesn't heat up like a furnace, consume lots of power and run slow. I pretty much described the P4 with that last part. If AMD hadn't kicked Intel in the knee, they would still be insisting GHz meant everything and keep selling you those crappy P4 chips.

Score: 0

By deminicus

posted Apr 20, 2007 - 8:53 AM

simply put it, they seriously need to pull a hail mary equivalent technology leap.

Score: 0

By DudeBoyz

posted Apr 20, 2007 - 4:41 AM

They made a masterful stroke by combining hardware 64 bit on a hardware 32 bit chip to ease the transition. Put Intel's Itanium to shame.

But their insistence on transitioning from Socket 939 to Socket AM2 seems to have hit them hard. Instead of dropping Socket 939 like a hot rock, they should have continued parallel development of Socket 939 and AM2 for at least a year.

With Core 2 Duo blowing AMD away on performance, if abandoned Socket 939 users had to buy a whole new motherboard and type of memory just to get a faster AMD chip, they might as well just give up on AMD as AMD had given up on them, and buy a Core 2 Duo setup.

By being so callous to their 939 customers, they undermined much of the loyalty they had gained from users, giving them no reason to stick with AMD.

If they had kept supporting Socket 939 as well as implimenting AM2, and users only had to purchase a single chip to upgrade, I think a lot more would have done that instead of going to Core 2 Duo.

All that coupled with the massive overhead of the AMD-ATI merger is a lot for a company to swallow.

You basically alienate your previously loyal user base then have to absorb an entirely new company into the fold. Not a good bit of timing.

Score: 0

By alphatrigon

posted Apr 20, 2007 - 12:55 AM

DOH!!! AMD was reaching too much anyway. They road on a concept that was only temporary for too long, until Intel got wise to it and kicked it up 5 notches.

Dang it...3dfx did that but some companies always repeat those mistakes.

Score: 0

By PostDeals

posted Apr 19, 2007 - 11:16 PM

Intel does have you beat, especially with their new offerings and architecture. I may go back to intel on my next processor purchase. It was a great run while it lasted. I know the price has always been an option and thats why I went with AMD but recently especially since the ATI merger I think they have lost sight and you can't survive after loosing 500 million dollars, investors will not let you.

Score: 0

By ladylust

posted Apr 19, 2007 - 10:08 PM

I like AMD but I always new Intel was the horse to back. AMD will be around for a while, and it is needed to keep Intel on its toes - but Intel will always dominate.

Score: 0

By Niro

posted Apr 19, 2007 - 8:17 PM

But, but...I thought AMD "wasn't worried"??

Score: 0

By Alex Stevens

posted Apr 19, 2007 - 6:18 PM

I wonder which company will buy AMD.

Score: 0

By VikingBlade

posted Apr 19, 2007 - 9:32 PM

IBM or Sun (long-shot).

Score: 0

By mjm01010101

posted Apr 19, 2007 - 8:20 PM

Nvidia.

Score: 0

By PC_Tool

posted Apr 19, 2007 - 9:07 PM

lmao..

That would be funny. Well, until the complete lack of competition in the GPU market kills any hope of innovation.

Score: 0

By computershack

posted Apr 20, 2007 - 9:38 AM

Is there anything worth innovating for after the DX10 range?

IMO all that they're doing in bringing in faster CPUs and GPUs for the home market is allowing software producers to get away with putting out overbloated poorly optimised s***e.

Take Battlefield 2. It needs 2GB to run decently. WTF is that all about? Graphics and gameplay wise, there's not anything out of the ordinary. Plenty of games manage far more with far less.

Score: 0

By PostDeals

posted Apr 19, 2007 - 11:17 PM

Not ture, I think we may finally see prices level off and people looking at the processor market. Too many chips out and nothing that can fully utilize the full potential unless you are looking at the Enterprise market.

Score: 0

By Heero

posted Apr 19, 2007 - 6:14 PM

Ouch...

Score: 0

By CarLox

posted Apr 19, 2007 - 8:26 PM

I agree with you homs, OUCH!!!!!

Score: 0

By Bobbitchin

posted Apr 19, 2007 - 6:03 PM

Maybe buying ATI was not such a good idea.

Score: 0

By Neoprimal

posted Apr 19, 2007 - 6:24 PM

It's not ATI's fault. It's AMD's ridiculous push at trying to win over core duo 2 interests by undercutting their own premium CPUs by as much as 50%. Now that they're feeling the bite maybe they'll become realistic again and price their CPUs accordingly.

Score: 0

By Alex Stevens

edited Apr 19, 2007 - 6:44 PM

Even AMD said that the ATI aquisition caused their huge loss last year. They expected to make it back but it didn't work out the way for them. The article was posted here some time back. The whole thing was a huge blunder and now they are paying for it. It drained their resources and now they are having serious problems getting their new fab up and running. The company is going broke.

Score: 0

By Hellcat_M

posted Apr 19, 2007 - 8:56 PM

They should have just partnered up on projects instead of a full buy out, with the option to buy later. Now they just jumped in and took a huge gamble and its not working for them. Hopefully they can pull out of it or someone will help them out. Maybe IBM should buy them not that their not making Mac processors anymore.

Score: 0

By perrywilson78

posted Apr 19, 2007 - 7:40 PM

AMD cpus are a generation behind Intel now and it looks like AMD is going to make ATI a full generation behind nvidia.

Score: 0

By Heero

posted Apr 19, 2007 - 8:59 PM

I wouldn't go that far...

Remember it took Intel 3 years to catch up, and it hasn't been close to a year yet. Intel is using 65mn parts, and 128SSE sets. AMD will be releasing them soon-esk.

Sure, this is a majot setback for AMD, but I wouldn't count them out quite yet. Let's give them another 2 and half years. (Mind you I don't think they have enough money to last that long)

Score: 0

By Alex Stevens

posted Apr 19, 2007 - 9:47 PM

Intel dwarfs AMD though, they had the money to spend those three years. AMD is in serious trouble if someone doesn't bail them out (or buy them out). I really don't want that to happen, I like AMD and we need the competition but things are not looking good for them right now.

Score: 0

By PostDeals

posted Apr 19, 2007 - 11:19 PM

Maybe microsoft can buy them out.

Score: 0

By cap737

posted Apr 23, 2007 - 5:47 PM

Whoa now!! The EU would have a fit about that one!!

Score: 0

By kashin

edited Apr 21, 2007 - 1:28 AM

"Maybe microsoft can buy them out."

Woah, I hope not! I'd rather see Google buy them out. They seem to have money to burn.

Score: 0

By SouthPark

edited Apr 20, 2007 - 11:00 AM

I don't mind. As long as AMD survives, I'll go the AMD way - any day. I'm an AMD fan.

Score: 0

By mjm01010101

posted Apr 20, 2007 - 11:59 AM

I was since 1999. However I couldn't ignore Core 2 Duo.

Score: 0

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