AMD's slow but steady market share gains
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Fifteen percent, then 15.5 percent, and now 15.8 percent. AMD is gaining back lost ground, Mercury Research says.
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Advanced Micro Devices inched closer to profitability despite posting a huge loss as it struggled to absorb the huge cost of its acquisition of ATI Technologies.
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The software maker is moving along -- but not enough to get investors excited.
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(InfoWorld) - Advanced Micro Devices Inc. (AMD) is moving fast to complete a planned acquisition of ATI Technologies Inc., offering US$1.7 million in salary and bonuses to hire the graphics card vendor's chief executive officer, David Orton. Retaining Orton could help AMD to reach its stated goal of building a single platform to boost its performance in media and data processing and to build a stronger presence in the consumer digital media market, AMD said whenÂ it announced the $5.4 billion offer in July. AMD hopes to build electronics that combine its microprocessors with ATI's GPUs (graphics processing units), and thus maintain its momentum in nibbling away at the market share of rival, Intel Corp. So the company offered Orton a job as senior vice president of the planned 14,900-person company, according to papers filed Wednesday with the U.S. Securities and Exchange Commission. AMD also reported this week that government officials on Taiwan's Fair Trade Commission had approved the deal. AMD expects to clear all other hurdles by the end of October, including the approval of ATI shareholders and Canadian securities regulators. But even asÂ AMD nears its goal, rumors surfaced Wednesday that Intel wants to acquire ATI's rival, Nvidia Corp., the only remaining vendor of the graphics cards used in PCs, gaming consoles, set-top boxes and handheld devices. An industry analyst was quoted by the EE Times saying the rumor is swirling, but he believes it is unlikely. Indeed, such a move would be surprising, given Intel's ongoing corporate reorganization. The company is struggling to meet profit targets and has recently cut costs by laying off 10,500 workers and selling several divisions. Also, Nvidia is growing more expensive by the day, as stock traders see a bright future for the sole remaining independent graphics vendor, boosting company stock from $18 to $30 since AMD announced the deal to buy ATI, as of midday Thursday. Intel does not comment on rumors, a spokeswoman said. A Nvidia spokesman declined to comment, calling the rumors mere market speculation. Â
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(InfoWorld) - Advanced Micro Devices' move to cut overhead costs by outsourcing its chip manufacturing business may backfire in the long run, according to several analysts who have downgraded the company's stock. AMD is struggling it keep its head above water after posting losses of $611 million and $574 million for its past two quarters. The company has also drawn criticism for its manufacturing, with recent reports that it will delay the full-volume launch of the "Barcelona" quad-core Opteron server chip from July to October. That would hobble AMD in its effort to compete with surging rival Intel. Although AMD's Opteron has won over many users of Intel's Xeon server chips since its launch in 2003, that trend is now in a sharp reversal, according to a June 13 report from Jon Peddie Research. In the market for workstation processors, AMD had pushed Intel's share down to 87.6 percent in the first quarter of 2006, but Intel has rebounded since then, reaching 92 percent share in the first quarter of 2007. The building pressure recently prompted some analysts to predict that AMD might stop manufacturing any chips at all and convert to a fully outsourced business model as soon as 2008. AMD said that rumor had come from a "speculative" Goldman Sachs report, but confirmed that the company is trying to focus its efforts on developing chips instead of manufacturing them, according to AMD spokesman Drew Prarie. AMD currently has a deal giving it access to IBM's chip fabrication plant in East Fishkill, New York. Under that arrangement, AMD can perform much of its research and development without having to incur the cost of owning its own manufacturing plant, he said. "We're looking to find ways to extend that model beyond research and development to the full range of the manufacturing supply chain," Prarie said Monday. "That could run the range from increasing the amount of processors we send out for chartered manufacturing, and could also include things like establishing partnerships on the manufacturing side." AMD has already taken some steps in this direction. In 2006, AMD announced a plan to give Chartered Semiconductor Manufacturing a heavier load, asking the firm to begin making the new 65-nanometer scale Athlon chips and other processors. And in May, AMD announced that it hadÂ awarded the job of manufacturing its newest graphics chips to Taiwan Semiconductor Manufacturing Company (TSMC). Now the company may be preparing to expand that model, according to a June 17 report from Citigroup analyst Glen Yeung. AMD is on the verge of making a "transformational move" such as outsourcing a larger share of low-end processors to TSMC, selling a share of the manufacturing capacity in its Fab 30 chip-making plant in Dresden, Germany, or even selling a share in its planned $3.2 billion chip plant in Saratoga County, New York, Yeung wrote. Despite AMD's insistence that such an arrangement would simply allow it to stay in the chip business while cutting costs, the uncertainty makes Wall Street analysts nervous. The Citigroup report lowered its estimate of AMD's future revenue from $1.3 billion to $1.1 billion for the second quarter, and from $5.8 billion to $5.6 billion for the full year of 2007. Those figures would represent a flat performance compared to AMD's performance last year, with $1.22 billion of revenue in the second quarter of 2006 and $5.6 billion for the full year. "We are again lowering AMD estimates, this time for 2Q07 (we had previously lowered 2H07), reflecting our field checks suggesting current conditions are weak," Yeung wrote. While Citigroup recognizes that AMD could be moving away from its own manufacturing and that could help the company cut costs, "we remain on hold for the shares given near-term weakness," he wrote. In contrast, Yeung said Intel would continue to enjoy a competitive advantage thanks to theÂ potential delay of AMD's Barcelona chips, the rising popularity of Intel's new Santa Rosa notebook platform, and the continued sales of Core-family chips for desktop PCs.
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Intel enjoyed improved sales, while AMD did its best to limit the damage during a year plagued by a key product delay.
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While overseas sales are rising smartly, the key North American market is inching along. That could slow this richly valued stock.
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As this year comes to a close, AMD executives won&#39;t be sorry to put 2007 behind them. Battered by rising debt, shrinking market share and mounting financial losses, AMD is counting on a comeback in 2008. But can the struggling chip maker make good on its promises to customers and investors that better times lie ahead?Many of AMD&#39;s current troubles are tied to Barcelona, the first version of its Quad-Core Opteron processor.&#160;Repeated delays of this chip weakened AMD&#39;s finances and undermined confidence in the company&#39;s ability to deliver new products as promised. Rebuilding that lost confidence among corporate users and the financial community won&#39;t be easy and the company can ill afford further missteps.Over the next six months, there are several milestones that AMD must hit in order to get back on track. The first, and arguably most important, involves volume shipments of Barcelona, scheduled to happen during the first quarter. AMD desperately needs this chip to shore up flagging revenue from its commercial business and to take back ground lost recently to Intel in the server market.With a bug that was recently discovered in Barcelona fixed, AMD expects the latest version of the chip to start coming out of its manufacturing plants in January. Barcelona shipments are expected to rise throughout the first quarter, reaching &quot;full volumes&quot; and widespread availability of servers based on the chip during the second quarter, according to Phil Hughes, an AMD spokesman.Another early milestone to look out for involves Shanghai, the second version of the Quad-Core Opteron chip that&#39;s set for volume production during the second half of 2008. AMD will produce Shanghai with a 45-nanometer manufacturing process that is one generation ahead of the 65-nanometer process used to make Barcelona.The numbers used to describe chip manufacturing processes refer to the average size of the smallest features that can be created on a chip. The smaller these features can be made, the better. Making these features smaller gives chip makers the ability to shrink the overall size of a chip, thereby reducing unit manufacturing costs, or to add new features. Chips made using a more advanced process may also consume less power and run faster than other versions. But semiconductor production is as much art as it is science, and moving to a more advanced process is fraught with risks.In the case of Shanghai, AMD will take advantage of the 45-nanometer process to triple the size of the Level 3 (L3) cache, from 2M bytes in Barcelona to 6M bytes. The L3 cache is a shared pool of memory that can be accessed by all four cores on the chip. Each core has 512K bytes of Level 2 (L2) cache. When data is moved out of the L2 cache, it moves into the L3 cache instead of main memory, meaning that the core can access this information more quickly than would otherwise be possible.Like AMD&#39;s existing server lineup, Barcelona and Shanghai also include an on-chip memory controller that further helps to increase performance.The memory structure used in the Quad-Core Opteron is different from Intel&#39;s server chips, which do not use an L3 cache and do not have an on-chip memory controller. Instead, Intel&#39;s quad-core Xeon 7300 server chips have 8M bytes of shared L2 cache. Since Intel processors actually pack two dual-core chips inside a single package, the L2 cache is divided into two parts, with 4M bytes on each silicon chip. Intel&#39;s processors do not use an on-chip memory controller.Boosting the Quad-Core Opteron&#39;s L3 cache with Shanghai should give AMD&#39;s quad-core chips the opportunity to stretch their legs, but the company has to make them first. The first working samples of Shanghai are due out of AMD&#39;s factory in Dresden, Germany, in January, according to recent remarks by Mario Rivas, executive vice president of AMD&#39;s Computing Products Group. If these samples arrive late or suffer from unexpected technical problems, this could delay volume production of Shanghai to late 2008 or even early 2009. Conversely, working samples that arrive on schedule and meet or exceed expectations would give AMD an added boost.Besides the server segment, there are a couple of key product milestones on AMD&#39;s roadmap for desktop and mobile processors that bear watching as well.For example, the company plans a first-quarter rollout of Perseus, a package of chips aimed at PCs for the corporate market and centered on a quad-core or triple-core processor and an RS780 or SB700 chipset. A dual-core version will also be rolled out. During the second quarter, AMD plans to roll out Puma, a chip package designed for notebooks. Puma is based on a new processor, called Griffin, expected to offer better performance and power efficiency than AMD&#39;s existing line of mobile processors.AMD plans to offer additional details of its plans and upcoming products at the Consumer Electronics Show to be held in Las Vegas during January, Hughes said.
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Still carrying the weight of costs related to last year&#39;s&#160;acquisition of graphics vendor ATI, AMD recorded its fourth straight quarter of net losses Thursday.
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Still expects profits in Q3 '08 AMD says its chugging ever-closer to profitability. Perhaps it's right. The chip fabbing second-banana's losses shrunk in the fourth quarter of '07 â well, sort of.â¦
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Advanced Micro Devices Inc. (AMD) saw its short streak of quarterly profits come to an end, as sales growth slowed in the fourth quarter due to competitive pricing for its flash memory products, the company said Tuesday.
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Advanced Micro Devices , the world's second-largest maker of computer microprocessors, on Thursday posted a narrower-than-expected quarterly loss thanks to strong chip prices and shipments, sending shares up 3.5 percent.
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x86 platform ousting others AMD regained a few percentage points of world microprocessor market share from its arch-rival, Intel, the latest, second-quarter figures from market watcher iSuppli show.â¦
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(InfoWorld) - After watching its market share for the North American desktop PC market slip in a soft third quarter, Advanced Micro Devices Inc. (AMD) will seek greater profits in 2007 throughÂ a new family of quad-core server chipsÂ and itsÂ acquisition of graphics chip maker ATI. "From a customer perspective, our integration is completed," said Henri Richard, AMD's chief sales and marketing officer during the company's annual analyst meeting in New York on Thursday. The companies still face several years of work to reach their goal of launching a combined processor and graphics chip called Fusion, but since closing the deal in October, they have already combined sales forces, supply chains and manufacturing facilities. In the short term, that will enable "the new AMD" to benefit whenÂ Microsoft's launch of the Windows VistaÂ OS sparks increased demand for visual capability in PCs. "Vista will change the paradigm of how people relate to their PCs and their criteria for selecting devices in 2007. That emphasis on a more visual experience will give AMD an edge," Richard said. AMD will also use the ATI acquisition to enter the fast-growing consumer electronics market in 2007, selling more video processing chips as demand rises for digital and high-definition TV, and selling more embedded chips as handheld devices converge the capabilities of cell phones and PCs, he said. AMD expects 19 percent growth for its chips used in the handheld sector and 44 percent growth in digital TVs. In the meantime, AMD will focus on its bread-and-butter product, the Opteron server chip. AMD plans to increase its revenue from microprocessors and chipsets by 20 percent in 2007, twice its prediction for the industry's growth rate. Chip-making rival Intel Corp. regained some ground in the desktop and server markets in recent months with its Core 2 Duo and dual-core Woodcrest Xeon chips. But AMD is poised to defend its turf. The company demonstrated a four-chip server using laboratory versions of its "Barcelona" quad-core Opteron chip at the meeting. Compared to AMD's own dual-core server chips, the design marks a 40 percent to 70 percent improvement in processing power and a 60 percent improvement in performance per watt. AMD plans to launch that chip for high-end servers in the second half of 2007, and update it with a "Shanghai" model in 2008. The company also plans to expand from its stable of processors designed for two, four and eight-chip servers in 2007 by launching "Budapest,"a quad-core Opteron chip designed for the single-processor servers used in the small business market. AMD will also improve its Turion and Sempron notebook chips, extending battery life with a more efficient "Hawk" model in 2007 and "Griffin" model in 2008. Together, those products will help return AMD to a better mix of products, Richard said. "We had been heavily reliant on the desktop sector. Now our server and laptop segments are growing faster, so we will soon reach the industry average." AMD has already started designing an eight-core server chip, set for release in three years, but has no plans to build chips with even more cores. "I think most people recognize the industry made a mistake getting into the megahertz wars, because we should have been more focused on the efficiency of the overall platform. And we would make another mistake if we got into a core war," said Phil Hester, AMD's chief technology officer. "You'd scratch your head if someone tried to sell you a 16- or 32-cylinder car and ask 'Why on earth do I need this?' You really need something whose capabilities are matched to what you'll use it for every day."
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AFTER THE FEVERED speculation earlier this week about Dell using AMD microprocessors, the unthinkable nearly happened yesterday. The price of a share in AMD finished on the NYSE exchange yesterday at $21.
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Steady but unspectacular growth might leave investors wanting a bit more kick.
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Over the past six months, the usual strict hierarchies of the chip world have seen some rearranging. Perennial underdog Advanced Micro Devices (AMD:NYSE - news - research) has made impressive strides with