Toshiba gives price-cutting AMD the nod
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No longer just Intel inside Toshiba is to start shipping laptops with AMD processors, effectively bringing to an end its exclusive partnership with Intel.â¦
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If you&#39;re in the market for a new notebook computer it&#39;s your lucky day, Intel has announced a major price cut on its chips for mobile notebooks.
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(InfoWorld) - After a break of several years, Toshiba is about to introduce a laptop computer powered by an AMD processor. The world's number-four laptop PC maker said the new machine will be available soon in the U.S. and Europe. It will be aimed at the entry-level sector of the market, said Junko Furuta, a spokeswoman for Toshiba in Tokyo. No other details about the laptop were immediately available, although Toshiba suggested its U.S. and European divisions could be making an announcement soon. The design win for AMD comes as it is stepping up the pressure against rival Intel in the expanding laptop sector. Intel has just launched its new Santa Rosa laptop platform, and in response, AMD is readying its own platform called Puma, however that isn't likely to launch until mid-2008. The two companies are locked in competition at the bottom-end of the market too. AMD scored the contract to supply chips for One Laptop Per Child's "$100 laptop," after which Intel introduced its own machine for emerging markets, the Classmate PC. Toshiba stopped using AMD chips in laptops around 2001 -- something that was highlighted in court documents when AMD launched an antitrust suit against Intel almost two years ago. AMD alleged that Toshiba dropped the use of its chips after receiving a "very substantial" payment from Intel. Toshiba was receiving "market development funds" from Intel worth about $25 million to $30 million per quarter, and those would be jeopardized if it used AMD chips, the lawsuit alleged.
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The latest losses at chipmaker AMD are not as bad as  expected, thanks to surging sales of laptops.
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(InfoWorld) - Global PC sales have slowed a tad over the past few weeks as the market waits for Intel to announce new price reductions, market researchers said. The world's largest chip maker is widely expected to publish a new price list on July 22 that shows lower prices for microprocessors aimed at the desktop PC market. The company regularly updates its pricing, but doesn't disclose when or how much prices will change, an Intel spokesman said Thursday. Still, PC makers in Taiwan, as well as analysts and market researchers said they receive word of price changes ahead of time, and that the expected Intel price reductions were the reason Advanced Micro DevicesÂ announced microprocessor price cuts earlier this month. AMD slashed prices on its top-of-the-line desktop PC microprocessors by a few hundred dollars, and now offers six AMD Athlon dual-core microprocessors for below $100 each. The AMD move was aimed atÂ pre-empting Intel's anticipated July reductions, according to a report by investment banking firm Goldman Sachs Group. The expected price cuts are a continuation of Intel's battle for market share against rival AMD. It's a fight that has been great for users, particularly in desktop PCs. Microprocessors are among the most expensive parts in a PC, so price cuts on the chips usually lead to better deals for users, either on lower PC prices or more add-ons, such as better DVD drives, more memory, or larger hard disks. The market share battles have also prompted both Intel and AMD to boost technology, resulting in more bang for a user's buck. The price war hasn't been so good for the companies. Intel's stock fell 4.8 percent to end at $25.06 per share on the NASDAQ stock exchange Wednesday, a day afterÂ the company reportedÂ a lower than expected profit margin for the second quarter. Analysts blamed the price war. The fight with Intel has caused AMD to report weaker earnings in recent quarters, and analysts are not optimistic about its second quarter earnings, which it will report later Thursday in the U.S. "We believe the worse than expected gross margin, higher than expected R&D [research and development] spending and low quality earnings leverage (tax rate changes, sold depreciation, etc.) will cast a shadow over [Intel's] stock," wrote Michael Masdea, chip analyst at Credit Suisse Securities (USA), in a recent report. He predicted that Intel gained market share on AMD in the second quarter, based onÂ its earnings report. Market researchers were not able to say exactly how muchÂ the PC marketÂ has slowed over the past few weeks, but indicated that the weaker sales have shown up in various places in the PC component supply chain. Slower trading in the DRAM (dynamic RAM) market, for example, caused prices to drop last week, according to DRAMeXchange Technology, which runs an online DRAM trading site. The company blamed the anticipated Intel price adjustments for the declines. Â
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In an announcement before semiconductor engineers in San Francisco this morning, AMD and IBM put forth proof of what could be their breakthrough process - their response to Intel in the race to reduction.  It could pull AMD back even with Intel by 2008, if Intel doesn't respond in the intervening months.
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Japanese electronics group Toshiba Corp  posted a 38 percent rise in quarterly operating profit on Monday, thanks to sales of its flash memory chips and thermal power plants, and it raised its full-year outlook closer to market estimates.
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Japanese electronics group Toshiba Corp  (6502.T) posted a 38.4 percent rise in quarterly operating  profit on Monday, thanks to strong sales of its flash memory  chips, and it raised its full-year outlook closer to market  estimates.
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(InfoWorld) - Toshiba and Micron TechnologyÂ have settled a number of outstanding lawsuits regarding alleged patent infringement and theft of trade secrets related to computer memory chips. Under terms of an agreement announced Friday, Toshiba will purchase some Micron patents related to semiconductor technology and license patents previously owned by Lexar Media, which wasÂ acquired by MicronÂ earlier this year. Toshiba will pay $288 million to Micron in return for the patents and licenses, Toshiba said. The amount is substantially less than the $465 million inÂ compensation awarded to LexarÂ by a California court in 2005. The payment has been on hold since late last year after Toshiba succeeded in having the damages reconsidered andÂ filed an appealÂ seeking to overturn the original guilty verdict. Earlier this year Lexar raised the stakes by asking the U.S. International Trade Commission toÂ bar the importÂ of some of Toshiba's NAND flash-memory chips and products containing them. The ITC action will now be dismissed, along with others at the U.S. District Court for the Northern District of California and the California Court of Appeals, Toshiba said. Toshiba became business partners with Lexar when it invested $3 million in the company in 1997 and acquired a seat on its board of directors. According to Lexar's original complaint, Toshiba sat on the board for two and a half years and gained access to the company's product plans and technology, while at the same time working with Lexar rival SanDisk. Â
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Two days after it lost an important ally in the high-definition format battle, Toshiba put on a defiant face at the Consumer Electronics Show and declared the HD DVD format is a long way from being dead.&quot;We remain firm in the belief that HD DVD is the format best suited to the wants and needs of consumers,&quot; said Akio Ozaka, head of Toshiba America Consumer Products, at a news conference. He said Toshiba was surprised by the announcement, which came on Friday, that&#160;Warner Bros. was dropping HD DVD&#160;and exclusively backing Blu-ray.&#160; &quot;We are especially surprised that this decision was made in spite of the significant momentum that HD DVD has gained in the U.S. market and other regions.&quot;Warner was the only major Hollywood studio releasing movies on both formats and the decision to go with Blu-ray Disc meant Toshiba has only two major studios, Paramount and Universal, backing its technology.The decision also left Toshiba with a potential public relations disaster as it came just days before CES, the annual North American gathering of the consumer electronics industry that kicks off officially here on Monday. In response to the Warner news the HD DVD Promotion Group canceled its news conference, leaving some to conclude that backers of the format were ready to concede defeat.&quot;As you can imagine this is a tough day for me,&quot; said Jodi Sally, vice president of marketing for digital audio and video products at Toshiba America Consumer Products. &quot;It&#39;s difficult for me to read all the pundits declare that HD DVD is dead. Clearly the events of the last few days have led you to that conclusion but we&#39;ve been declared dead before.&quot;But Toshiba might have a hard time convincing the analysts and media that follow the battle closely that HD DVD is still in the race.&quot;It&#39;s interesting the CEO said he was surprised. I think that&#39;s an understatement. Devastated would probably be more accurate,&quot; said Peter King, an analyst at U.K.-based Strategy Analytics, who attended the Toshiba news conference.&quot;They really have an uphill battle,&quot; he said. &quot;They are left with a couple of the smaller studios but there is no doubt the major studios have voted with their feet. It&#39;s hard to see now what they can do. Maybe focus on the PC market as a format, but they have a major struggle and that was very clear today.&quot;King wasn&#39;t willing to call the battle over just yet but he said a lot would depend on comments made during CES by other industry leaders, like&#160;Microsoft founder Bill Gates, who is scheduled to speak in Las Vegas Sunday evening.But if the battle is over then what&#39;s bad news for Toshiba will be good news for consumers and the consumer electronics industry, he said. &quot;Everybody in the industry can get behind one format [and] start promoting. The message will be simple and clear, prices will come down and it&#39;s a good thing for the industry.&quot;Toshiba said 1 million HD DVD players are currently in the market in North America.In a statement issued on Saturday the company also expressed surprise over Warner&#39;s move &quot;despite the fact that there are various contracts in place between our companies concerning the support of HD DVD.&quot; On Sunday it didn&#39;t elaborate on those contracts or what its next move may be in the march to make HD DVD the de facto replacement for DVD for high-definition content.
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Amid further delays of AMD&#39;s quad-core server chip and plans to write off goodwill from the acquisition of ATI, AMD executives are going to face tough questions when they meet financial analysts in New York Thursday.AMD preempted the analyst meeting with the announcement Wednesday that it plans to take a material charge for impaired goodwill from its US$5.4 billion acquisition of graphics chip maker ATI. But AMD didn&#39;t say how big that charge will be, promising to announce the amount within four days -- a span of time that implies details of the charge will be revealed after the analyst meeting.Goodwill is a financial term that describes the difference between the price that one company paid to acquire another and the net value of the assets that it acquires. This difference, or goodwill, reflects the intangibles that a company acquires, such as the reputation and intellectual property of the acquired company.AMD initially recorded goodwill of $3.22 billion from the acquisition of ATI. That was reduced to $3.17 billion at the end of September, primarily due to changes in income-tax liabilities recorded by the company. AMD&#39;s decision to write off a significant portion of this goodwill is a recognition that ATI is no longer worth the price it paid last year.The expected charge further dims AMD&#39;s gloomy financial outlook. The company has so far lost $1.6 billion this year on sales of $4.2 billion. By comparison, AMD recorded a $410 million profit on sales of $3.9 billion during the first nine months of 2006. At the same time, AMD borrowed heavily this year to keep its operations moving, issuing $3.7 billion in notes that are convertible into company shares.AMD received a further boost last month with a $608 million investment from a company owned by the Abu Dhabi government, but the company still faces significant challenges.Those challenges are reflected in the decline of AMD&#39;s gross margin since last year, partly as a result of the ATI acquisition, which brought lower-margin products into AMD&#39;s lineup, but also because server chips represented a lower percentage of the company&#39;s microprocessor sales. Server chips are generally more expensive and have higher margins than processors used in desktops and notebooks, and strong sales of server chips would give a badly needed boost to AMD&#39;s financial situation.The problem is that AMD&#39;s latest server chip, the Quad-Core Opteron formerly known as&#160;Barecelona has been repeatedly delayed,&#160;giving rival Intel an opening to expand sales of its own server chips at AMD&#39;s expense.After recently discovering&#160;a bug in the Quad-Core Opteron that stopped shipments of the chip, AMD now expects the processor, launched in September, to finally ship in large volumes sometime during the first quarter of 2008. That means the Quad-Core Opteron might not be available to most customers until March, six months after its launch and more than one year after the first pre-production samples of the chip were made available to server makers.While analysts will be looking for more detailed guidance on when AMD expects to ship Quad-Core Opteron chips in volume, they will also be looking for information on the next version of the Quad-Core Opteron, called Shanghai. AMD promised to ship Shanghai during the middle of 2008, but the company has yet to produce working samples of the chip.&quot;We will have initial samples also in January. I&#39;m fairly confident that those puppies are going to boot, and then we can have a follow-up conference call and I&#39;ll tell you, &#39;The sucker is booting,&#39;&quot; said Mario Rivas, the executive vice president of AMD&#39;s Computing Products Group, responding to a question about Shanghai during a recent interview with CRN.Whether that means AMD will release Shanghai in mid-2008 as promised remains to be seen.Shanghai is a 45-nanometer &quot;shrink&quot; of the problematic Barcelona chip, which is produced using a 65-nanometer process. These numbers represent the average size of the smallest feature that can be created on a chip, and smaller is generally considered better.Moving to a more advanced production process offers chip makers several benefits, such as reducing unit production costs by making the chip smaller or adding more features, such as additional on-chip cache. But the move to a more advanced process also carries risks, such as the possibility of lower production yields that can result in limited availability or chips that run at lower clock speeds than expected.Along with these issues looming over AMD, there are questions about the future of Hector Ruiz, the company&#39;s CEO and chairman. As head of the company, Ruiz ultimately bears responsibility for the company&#39;s recent performance problems and the impending write down of goodwill from the ATI acquisition. For months, there has been speculation within the industry that Ruiz would be forced to step down from his current position.However, that&#39;s unlikely to happen, according to a Reuters report citing comments made by Ruiz in a television interview to be aired by CNBC Europe later today. During that interview, Ruiz named AMD President and COO Dirk Meyer as his successor, but scotched speculation he plans to step down next year, the report said.
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(InfoWorld) - Advanced Micro DevicesÂ is investing $7.5 million in energy-efficient chip company Transmeta, which has beenÂ battling falling revenueÂ and widening losses. The investment, announced Friday, comes a year after AMD said it wouldÂ resell Transmeta's Efficeon processorsÂ in PCs for developing countries, and three months after Transmeta said itÂ faced delistingÂ from the Nasdaq stock market because of its low share price. Transmeta shot to fame in the late 1990s when the vendor said it was developing a groundbreaking line of ultra low power processors for notebooks PCs. The Crusoe chips did not sell as well as expected, however, due to product delays and disappointing performance. Transmeta did secure a few licensing deals, notably in Japan, but it also wracked up heavy losses. In January 2005 the vendor announced job cuts and said it would switch its focus to licensing its power management technology to other companies. Later that year Transmeta agreed toÂ sell its Crusoe chips to Hong Kong companyÂ Culturecom TechnologyÂ for $15 million in cash. Last year's deal with AMD, to resell Transmeta chips in Microsoft's pay-by-instalment PC initiative, raised the vendor's prospects again. But in March Transmeta said it faced delisting from the Nasdaq because its stock price fell below $1 for more than 30 consecutive days. Transmeta's stock closed at $0.70 a share on Thursday, but it jumped 50 percent in premarket trading Friday on news of AMD's investment. Transmeta reported revenue of $2.1 million for its first fiscal quarter in May, down from $19.5 million in the same period a year earlier. Its losses widened to $18.7 million, from $1.7 million in the first quarter of 2006. AMD made its investment in exchange for Transmeta stock. The chip vendor called Transmeta "an innovative force in the industry" and said it had been a key ally in bringing AMD's AMD64 technology, the basis of its Opteron chips, to market. "Our investment will support Transmeta's technology development work and AMD's efforts to leverage Transmeta's innovative energy-efficient technologies to the benefit of AMD's customers," Dirk Meyer, AMD's president and chief operating officer, said in a statement. Separately, Transmeta said in a regulatory filing last month that David Ditzel, the company's co-founder and its first CEO, was resigning from the vendor's board of directors effective June 15. He'll receive a severance payment of $210,000 in three installments, the company said. Ditzel may do consulting work for the company until June 2008, according to the filing. Â
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Investors and consumers were warned the bad news would come, and it came as predicted. AMD took a stunning charge of $1.6 billion in one quarter, to account for value from the ATI merger it now realizes may not materialize.
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Toshiba announced an aggressive campaign to bolster its HD DVD movie disc format against Sony-backed Blu-ray technology, cutting prices on players to as low as $149.99.
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The electronics giant plans to sell its operations for making microchips used in its PlayStation game console to Toshiba, pulling back from the heavy investment needed.
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Advanced Micro Devices will receive preferred shares in exchange for its investment in company whose financial performance has fallen lately.
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Japanese electronics group Toshiba Corp.   posted a jump in quarterly operating profit on Monday,  thanks to solid flash memory chip prices and power plant sales,  and raised its full-year outlook by 12 percent, closer to  market estimates.