Sunday, March 25, 2007

AMD current strategy analysis

Ruiz is making all the right moves.

1) CPU biz: flood the market with low price AM2 CPUs, take market share at all cost. Intel becomes just another supplier fighting for a piece of the pie. All AM2 PCes can be upgraded to K10 later.

2) GPU biz: the AMD integrated graphics are as good as Nvidia's. The only crap is Intel.

23 Comments:

Blogger LeeCooper said...

Just one month away!

They are coming!!!

8:26 PM, March 25, 2007  
Blogger lex said...

LOL.. posting have been far and few here.. The pretender and his cumm lappers are getting thirsty for some more BS from the Doctor.

When is INTEL going BK sharikou.

Here is little AMD spending billions on fab upgrades on a 65nm factory that is ramping late. They have their 1st new generatoin architecture in 5 years finally coming.. where is it, where are the benchmarks... I'd expect a leak if it was really good.. but haven't heard anything yet.. not one thing. Chances are its good, but not great. Probably beats Core2 in 50% of benchmarks. But guess whats the problem. its a pretty big die with AMDs little capacity it won't do much for the only line that matters.. the bottom line. AMD sucking red for the rest of the year.

Lets see what is coming, Penrym on 45nm with big honking caches... that is 4 45nm factoriies pumping leading edge silicon and 4 65nm pumping Core2s at the bottom. All mkaing money for INTEL...

What was your prediction.. BK in 2008 for AMD was it now Sharkiou... you are too stupid to even be entertaining anymore

8:31 PM, March 25, 2007  
Blogger R said...

Dr S, two things are correct “Intel graphics are crap” and “AMD is flooding the market”, however we’ll have to wait to see if the strategy is correct.

8:54 PM, March 25, 2007  
Blogger Poke said...

Penryn will frag Barcelona. 8800 Ultra will frag R600. AMD's chipsets are pure garbage. And in 2008, Nehalem and CSI will finish off AMD once and for all.

Hector Ruiz better prepare his resume.

AMD BK Q2'08.

11:05 PM, March 25, 2007  
Blogger Giant said...

Since when is "late summer" one month away? K10 is coming in "late summer" according to Hector Ruiz. "Late summer" is August. That's about 4 -> 5 months away. They will paper launch it then. It won't be available in any reasonable quantity until October.

K10 is too little too late. Penryn will easily frag K10.

AMD BK 2Q08.

1:21 AM, March 26, 2007  
Blogger Roborat, Ph. D. said...

1) CPU biz: flood the market with low price AM2 CPUs, take market share at all cost. Intel becomes just another supplier fighting for a piece of the pie. All AM2 PCes can be upgraded to K10 later.

unfortunately, nobody wants an obsolete am2. AMD is already double stuffing the channel and are giving away cpu's at a loss yet it still losing marketshare from Intel. Sorry, strategy not working.

2) GPU biz: the AMD integrated graphics are as good as Nvidia's. The only crap is Intel.

And yet Intel maintains its 55% market share in this performace-irrelevant segment.

AMD BK in Q2'08. you're spot on.

5:23 AM, March 26, 2007  
Blogger KingRichard said...

Well, it is soon time for 2006 Q1 processor marketshare report from ISuppli!
Can't Wait!!!
And I DO agree with Sharikou... Intel GFX suck!
Just wait till Dell gets develops the second "generation" of Dell AMD Desktops using AMD on-board gfx! Woohoo!!

6:51 AM, March 26, 2007  
Blogger LeeCooper said...

:)hm

GPU one month away, AMD is preparing the biggest launch in history of graphics chips.
K10 one month away from the first benchmark which will destroy Intel's dreams in the attempt to destroy AMD.
I don't understand these bunch of sick people and their their malice towards AMD, or maybe I do.
You are all frightened of AMD.

K10 will be 300% faster on floating point than K8!

http://www.syndrome-oc.net/articles.php?article=94&lang=en

LOL

7:26 AM, March 26, 2007  
Blogger TheKhalif said...

Though I don't agree with Intel's demise, I do beleive that AMD is n a good position as even though have their highest debt they increased revenue by 91% in 2006 and captured 25% of the world market including nearly 30% server share.

AM2 is not useless or obsolete. It still powers games at more than acceptable frame rates and now is 75% cheaper.

That means that dual core boxes from AMD can be as cheap as NetBurst while being n the same balpark as Core 2.

690G has sown to be an excellent chipset and I would say that 790G will be even better.

Cheap BTX will go out to the masses for their digital home stuff.

IBM has reported that Power 7 will be Opteron-compatible so I think IBM will be buying plenty 1207/1207+ sockets in the future.

AMD just has the worst most thankless job in the world (except for mine).
They keep Intel honest and people just talk doom ad gloom because Intel decided to undervalue the market to hurt AMD.

I'm not even sure why they aren't being looked at about abusing their monopoly position.

Anyway,

ALL HAIL THE DUOPOLY!!!

7:56 AM, March 26, 2007  
Blogger Giant said...

Things just keep getting worse for AMD:

http://www.theinquirer.net/default.aspx?article=38487

Currently, WoodCrest and Clovertown are making a killing in the server space, mounting unbearable pressure on AMD to deliver its quad-core Barcelona processors. However, the saviour will not come in Q1 or before mid-Q2, in fact, so AMD's Q1 numbers have taken a bit of a pounding.

AMD was committed to delivering between 1.1 and 1.2 billion dollars in CPU revenue, but the number we are hearing now is hovering between $800 and $900 million, $300-400 million off the mark.


You can bet that AMD will post another huge loss.

This is just more confirmation of what we all know is true:- AMD BK Q2'08. After posting another loss AMD's stock will crash to less than $10.

9:25 AM, March 26, 2007  
Blogger Jeach! said...

After posting another loss AMD's stock will crash to less than $10.

We have the real savy investor here! Everyone knows that AMD will post losses for the upcoming quarters, didn't need an article to point that out.

Second, here is an investment lesson for yuu:

The stock has already absorbed that news

But hey, don't let me stop you from proving me wrong and shorting the stock!

10:54 AM, March 26, 2007  
Blogger Jeach! said...

Although I don't believe AMD is in as bad a case as most Intellers will try to let us believe, I do fear the extend to which this price war is expected to go... or might go.

Here is a general idea of a product life-cycle:

CASH -(a)> R&D -(b)> MANUFACTURE -(c)> INVENTORY -(d)> SALES -(e)> ACCOUNTS RECEIVABLE -(f)> CASH

Generally speaking, the cash used (a) in the life-cycle should eventually be converted to even more cash (f).

Although I agree with you that AMD has amazing products coming out within the next 18 months, if Intel does reduce its 4-core processors by 50%, that might not stop sales, but will probably prevent a profit.

If Intel continues this war (and I believe they will) without limits, and reduces prices even more in the long run, they can prevent AMD from profits even though they have a superior product. This would eventually hurt Intel too, but who do you think could last the longest playing this game? Intel, without a doubt. Well this is my next point...

Ruiz might still have a hidden card in his game, but you need some serious imagination and being open minded for this... here goes:

What if Ruiz will play Intels 'longevity' game by issueing AMD shares and convertible bonds. This could in theory wipe out AMD's debt and clean up its balance sheets with a few billion in cash to spare. This would be easy for AMD to do, but hurt current investors. On the other hand Intel wouldn't be able to do this so easily and so fast.

So if AMD did end the year with no debt and large amounts of cash on hand, Intel would be forced to give up the price war game knowing that AMD is no longer threatend and would easily hold out.

I believe this is the game that Ruiz and AMD will be playing!

11:16 AM, March 26, 2007  
Blogger netrama said...

"This would eventually hurt Intel too, but who do you think could last the longest playing this game? Intel, without a doubt. "

Any idea of how many quarters Intel can last at this rate..before it shows up losses ?? Can an body point me to some specific data ??

11:52 AM, March 26, 2007  
Blogger TedsPlace said...

When you have to throw 2-4 MB of cache on a chip to keep up with your opponent...this tells me their design is "CRAP"

4:53 PM, March 26, 2007  
Blogger Roborat, Ph. D. said...

TedsPlace said...
When you have to throw 2-4 MB of cache on a chip to keep up with your opponent...this tells me their design is "CRAP"


keep up? you mean the massive 40% performance and efficiency advantage C2D has? Or you mean keep up like AMD did with a 4x4 LukeiamyourQuadfather! monstrosity, polar ice cap melting of a disaster just to try and close the gap, keep up?
Please do enlighten us with how AMD is trying to keep up right now?

5:21 PM, March 26, 2007  
Blogger Roborat, Ph. D. said...

netrama said...
Any idea of how many quarters Intel can last at this rate..before it shows up losses ?? Can an body point me to some specific data ??


Intel gain revenue share last quarter while AMD shed 10% gross margin. Extrapolate that to today. AMD building up inventory, issuing a warning while analysts have hinted that Intel is on track with earnings.
if you're asking when will Intel post a loss, then the answer is never. they're gaining on all fronts while AMD seemed to be alone in losing share and revenue.
Intel is very far away from posting a loss. They have never posted a loss for more than 2 decades. people tend to forget how solid intel's finances are.
typically intel stops being aggressive when their margins are hit significantly. but the last earnings report, intel showed that it sees it can maintain its current margin at 49-50% while continuing to fight for market share. looks like Intel can go on forever as well with its current road map.

5:34 PM, March 26, 2007  
Blogger abinstein said...

"you mean the massive 40% performance and efficiency advantage C2D has?"

Sometimes I do think that Intel could get away with its BS claims because there are just too many brain damaged people to buy them in.

C2D simply has no 40% perf or eff advantage over any AMD cores released after 2003.

11:52 PM, March 26, 2007  
Blogger abinstein said...

"Any idea of how many quarters Intel can last at this rate..before it shows up losses ??"

With almost 50% gross margin during a bloody price war - I don't think Intel's going to post loss in short term.

And it goes without saying that I don't believe the "BK" claim by our dear host, either. :p

11:54 PM, March 26, 2007  
Blogger Ho Ho said...

tedsplace
"When you have to throw 2-4 MB of cache on a chip to keep up with your opponent...this tells me their design is "CRAP""

You do know that K10 will have a total of 4.5MiB of cache on die, roughly twice what later K8 CPU's have?

I still wonder what will happen once Intel has IMC and no more need for massive amounts of cache ...

2:10 AM, March 27, 2007  
Blogger Jeach! said...

"Any idea of how many quarters Intel can last at this rate..before it shows up losses ??"

Too many numbers are kept secret and thus makes it extremly difficult. It can be deduced throught an extensive analysis of their financials.

"if you're asking when will Intel post a loss, then the answer is never."

Dream on buddy! Their day will come... I don't know exactly when, but it will come.

"With almost 50% gross margin during a bloody price war - I don't think Intel's going to post loss in short term."

That is where you and many others are wrong. That is why Sharikou's BK theory 'may' be plausible in a worst case scenario for Intel.

Some of you see the billions in profit as secure. But what you don't realize is that there isn't a 1 to 1 correlation between revenue and profits (linear).

What I mean is that if Intel's revenues were to drop by say 50% after Barcelona has been out for 6 months. This wouldn't mean that the profits are also reduced by 50%, but contrary to belief they may be entirely wiped out.

So in other words for each 1% drop in revenue, this could reduce profits by 10%. And the more the revenues drop, the larger the profits decrease, making the profitablility curb a non-linear one. This is due to Intel's shear size (and bloat).

The reason it is hard to calculate how many quarters it would take before Intel shows a loss is that you have to know the exact equasion for this curbe. Only Intel knows that right now.

But to prove my theory, just look at the year 2006. Intel's revenues dropped by 11%, but their profits dropped by almost 50%. This would be worst in 2007 because Intel has increased its expenditures (FABS) vs. time to depreciate and it costs them more to produce processors than it did a few years back.

6:04 AM, March 27, 2007  
Blogger Ho Ho said...

jeach!
"Their day will come... I don't know exactly when, but it will come"

You know eternety is a long time, especially the end part of it ;)

"That is where you and many others are wrong."

Even when intel would start giving away its CPUs for free it would last at least until Q208. For as long as it gets any money for them it won't BK any time in the forseeable future. Going from loss to BK takes a long time, especially for Intel since it has quite a bit of money saved up.

On a similar note, AMD won't BK either.

"That is why Sharikou's BK theory 'may' be plausible in a worst case scenario for Intel."

Could you describe that scenario with numbers on how big the loss has to be for Intel to be forced to declare BK in Q208?

8:14 AM, March 27, 2007  
Blogger TedsPlace said...

Each to his own but if Intel had such a market share as posted in here & other places, theory being Intel should have a stock pricing of $50. From all the sales pitching that is broadcast. But....the latest today is AMD $13.52 & Intel $19.09. Not much of a gap. Wall Street isn't buying all the PR's coming out of Intel or their deceiving benchmarks they showed the financial market. Look for a Securities investigation soon concerning the benchmarks PRS.
Tick Tock Tick Tock!

11:32 AM, March 27, 2007  
Blogger Dr. Yield, PhD, MBA said...

Silly Ted mumbled:
But....the latest today is AMD $13.52 & Intel $19.09. Not much of a gap.

Ah Ted, you have a broken FPU. That would translate to the market values AMD at $7.5B and Intel at $110.1B. I would say that 14.7X more valuable is a pretty big gap.

Compare Price to Sales Ratios instead? Intel is valued at $3.14 for every $1 of sales, AMD at $1.32. Clearly the market sees a tangible difference between the two businesses.

And no, the SEC doesn't care about benchmarking PR. As I am not a lawyer, I can't say the benchmarking comparisons are legal, but I can say with great certainty it is not securities fraud.

12:36 PM, March 27, 2007  

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