Chip Makers Delay a Merger of Their Memory Divisions
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STMicroelectronics and Intel announced a delay in the merger of their unprofitable memory units.
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Concerns over AMD's succession plans come at a difficult time for the company, and revive that old tug-of-war between marketing and engineering.
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The world&#39;s largest chip maker, Intel, is changing its approach to making faster computer microprocessors. It has dropped plans to release a four gigahertz version of its flagship Pentium 4 chip.
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Faced with two technologies, companies are already picking sides over intregrating flash memory into PCs.
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AMD has delayed general availability of some key products until early next year, when it projects the chips, along with other new processors, will return it to profitability.The biggest hit went to its quad-core microprocessor, code-named Barcelona, which it needs to compete against Intel among server vendors. The chips, along with AMD&#39;s desktop platform, Phenom, won&#39;t be generally available to customers until the first quarter of next year. The products were supposed to ship in volume by the end of this year, but&#160;a technical design error in the chips caused AMD to slow the schedule so it could apply a fix, said Dirk Meyer, the company&#39;s president and COO in a meeting with analysts on Thursday.The company&#39;s Puma platform, a set of chips aimed at laptop PCs, will also be delayed until the second quarter of next year, a costly miss considering the fact that the laptop PC market is growing at around 30 percent per year.AMD also reduced its planned spending on new production lines to $1.1 billion from a previous estimate of $1.7 billion and said all its business divisions wouldn&#39;t return to profitability until next year.The statements caused AMD&#39;s stock to fall as much as 5 percent during early trading on the New York Stock Exchange, before rebounding to down just 1.8 percent, at $8.81 in the afternoon. The market was still open as of this writing.AMD executives apologized for missteps, such as the delay in Barcelona.&quot;We blew it, we&#39;re very humbled by it, we learned from it, and we&#39;re not going to do it again,&quot; said Hector Ruiz, chairman and CEO of AMD. He said AMD would go back to its habit of under-promising and over-delivering.To start, the company will be on a path to break even financially by the second quarter of next year and return to profitability by the end of the third quarter, he said. The financial performance will be boosted by the launch of several new products in graphics, chipsets, digital TV processors, and more, not including the delayed products.The company forecast its processor shipments will rise at least 15 percent next year, while graphics processor shipment growth will be greater than 6 percent, digital TV processors more than 13 percent, and handheld chips up 8 percent.AMD&#39;s gross margin will rise to between 46 percent and 50 percent next year, up from 37 percent during the past four quarters, said Bob Rivet, chief financial officer of AMD.&quot;We&#8217;re in a massive product refresh. In 2007, we were living on some old stuff. 2008 is all new stuff, and we believe it will yield goodness,&quot; he said.
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Intel will miss its 2004 product cost-reduction targets because of a widely publicized string of product delays and problems, but those missteps are largely behind it now, the world&#39;s largest chipmaker said on Tuesday.
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Although computer memory chip prices are expected to slide by midyear as chip makers plow money back into new production lines, analysts expect prices to stabilize later this year.
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A competing chip from rival Advanced Micro Devices will likely arrive several months earlier.
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AMD has delayed rollouts of its higher-speed enthusiast level quad-core CPUs for at least one quarter.
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With Christmas just 11 days away, you have to wonder what Hector Ruiz is going to find under his tree. It&#8217;s been a terrible year for Advanced Micro Devices, and the chipmaker&#8217;s analysts conference on Thursday did nothing to spread holiday cheer.Confirming what many in the chip world had suspected for some time, CEO Ruiz and other AMD execs fessed up that bugs in its new quad-core Barcelona server and Phenom desktop chips will&#160;delay these key next-generation technologies.The technical problems will delay general availability of the fastest version of the chips for three or four months. Customers willing to settle for slower clock speeds will be able to get the processors sooner; for example, AMD will ship a 2 gigahertz version of the Barcelona first, instead of the expected 2.5 gigahertz speed. In either case, the chips will be close to a year late; the original target date was the first quarter of 2007.AMD STUMBLES AS INTEL SPEEDS AHEADThe problem couldn&#8217;t come at a worse time. AMD has struggled all year to close the performance gap between its high-end chips and Intel&#8217;s. Barcelona, the company had promised, would restore its technical supremacy. Indeed some analysts said they had expected the quad-core server chip to do just that. &#8220;At 2.5 gigahertz it would have beaten any Intel products,&#8221; said analyst Nathan Brookwood of Insight64. &#8220;But at 2 gigahertz, it&#8217;s bringing up the rear,&#8221; he said.Intel, meanwhile, has corrected many of the problems that dogged it earlier in the decade. &#8220;AMD isn&#8217;t competing against the Intel of two years ago,&#8221; said Dean McCarron of Mercury Research. Intel has had quad-core chips in the market for about a year. To be fair, its chips are based on a somewhat simpler design; Intel gets to four cores by packaging two dual-core chips together. By contrast, AMD&#8217;s design integrates four cores on one chip, a more efficient solution, said McCarron. Except that AMD&#8217;s approach reduces yields and thus raises manufacturing costs, he added.There was earlier speculation that Barcelona&#8217;s problems were related to the ATI graphics chipset, but the problem turns out to be deeper, at the chip level. AMD has said it is related to the translation lookaside buffer (TLB) in the processor&#39;s L3 cache.DOUBTS ABOUT A QUICK FIXIn the Thursday conference, analysts had expected discussion of the company&#8217;s &#8220;asset light strategy,&#8221; which will apparently entail outsourcing more manufacturing to foundries such as Chartered Semiconductor or TSMC. But they didn&#8217;t get it, and the lack of details made CEO Ruiz&#8217;s promise to return to profitability in 2008 less credible to Wall Street. AMD&#8217;s financial performance has been terrible, losing money for four straight quarters. Part of the reason: Intel and AMD have engaged in a bloody price war, a struggle that has been very tough on the smaller company&#8217;s profit margins. But the Barcelona and Phenom delays are serious self-inflicted wounds.AMD&#8217;s stock lost another few points yesterday and has now shed about 40% in the last two months and a bone-jarring 56% since the beginning of the year. At $8.84 a share, Thursday&#8217;s closing price, the stock is at its lowest ebb since the summer of 2003. Ironically, AMD has so far&#160;rewarded Ruiz with pay raises.
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As time change nears, some companies are still struggling to patch their computer systems.
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German DRAM (dynamic RAM) maker Qimonda put the construction of an advanced semiconductor factory in Singapore on hold and slashed its planned capital spending for 2008 after reporting a steep first-quarter loss.The company blamed a 40 percent&#160;drop in DRAM prices&#160;for a &#8364;598 million ($866.3 million) net loss in its fiscal first quarter, which ended Dec. 31. Qimonda&#39;s sales reached just &#8364;513 million during the period, down 56 percent from the &#8364;1.17 billion in sales it reported one year earlier.A massive 73 percent drop in DRAM prices over the course of last year has memory chip makers scurrying to realign their business strategies. On Tuesday, Qimonda&#39;s joint venture partner, Nanya Technology, and their joint venture,&#160;Inotera Memories, both posted losses and announced&#160;lower spending&#160;on new production lines for 2008.Qimonda had much the same to say. The company cut its proposed capital spending for fiscal 2008 by &#8364;250 million down to a range of &#8364;400 million to &#8364;500 million. Due to the reduction, the construction of a new 300-millimeter (12-inch) memory chip plant in Singapore has been put on hold, Qimonda said in a statement.The DRAM market took a turn south last year as companies built too many new factories and demand for new PCs armed with Windows Vista failed to meet expectations. The resulting glut sent DRAM chip prices tumbling.The contract price of 1Gb DDR2 (double data rate, second generation) DRAM chips that run at 667MHz fell to $1.81 each as of Jan. 21, according to DRAMeXchange Technology, which operates a clearinghouse for the chips. The chips were $3 each at the start of October, when the current price slump hit.Qimonda noted the 40 percent decline in the October to December period was one of the strongest declines ever, and that even previously announced measures to cope with the price slide could not compensate for the difficult market environment.The company also said it is already reassessing its outsourcing strategy. Qimonda has worked with several partners in Asia to contract manufacture its chips and in technology transfer schemes aimed at sharing the cost of research and development. These partners include Semiconductor Manufacturing International (SMIC) of China, as well as Nanya Technology and Winbond Electronics of Taiwan.&#160;
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Intel has delayed its planned entry into the widescreen high-definition television (HDTV) market until next year.
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Cancels release of desktop chip in shift away from megahertz towards cache tweaks to improve processor performance.
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Four years later, chip maker still struggles to compete with AMD and Intel.
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BEIJING (AFX-ASIA) - Intel Corp said it is delaying the delivery of its first chip for projection television sets, while rival Advanced Micro Devices Inc is moving on schedule to an advanced manufacturing process, the Wall Street Journal reported.
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Taking stock. As 2004 winds down, Intel (nasdaq: INTC - news - people ) management isn&#39;t likely to grow nostalgic: The year saw a series of production glitches and delivery delays at the chip maker, and it