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AMD appoints new CEO as losses continue

Discussion in 'AMD Overclocking' started by sillyputty, Jul 20, 2008.

  1. sillyputty

    sillyputty Guest


    AMD has replaced Hector Ruiz with Dirk Meyer as its CEO, as the
    company reported its seventh consecutive quarterly net loss on

    AMD's board has elected Meyer to the CEO spot effective immediately,
    AMD said. He was previously president and COO and has been with AMD 12
    years. Ruiz will become executive chairman and chair of AMD's board of

    The chipmaker also announced that it has decided to divest its
    handheld and digital TV businesses. The company had merged the
    businesses into its consumer electronics group after the 2006
    acquisition of ATI. Last week, AMD announced it would take a charge of
    $880 million related to impaired assets of those businesses.

    AMD's revenue from continuing operations for the second quarter rose 3
    percent from a year earlier, to $1.35 billion. But the company still
    posted a net loss of $1.19 billion, or $1.96 per share.

    Second-quarter revenue fell 7 percent compared with the previous
    quarter. Unit shipments declined a little and average selling prices
    fell more, the company said.

    "We have a company rich with great people, great products, great
    spirit and a lot of great potential," Meyer said on a conference call
    following the financial announcement. "Looking at the recent past, we
    have not been living up to that potential. Looking forward, we will."

    Ruiz, who remains chairman, will continue to oversee the "asset smart"
    strategy initiated under his watch to make AMD less capital-intensive.
    The company would not provide more details on what sort of deals the
    company will make to carry that out.

    Meyer, who is also taking on the title of president, said he plans to
    focus AMD more narrowly on large-volume "sweet spots," namely PCs and
    volume servers, and increase its focus on execution, including
    dependable delivery of products and efficiency.

    AMD has suffered from product delays as it struggles against a much
    bigger competitor in Intel.

    The company expects to achieve sustained profitability beginning in
    the second half of this calendar year on the strength of new products
    and lower costs, executives said.

    sillyputty, Jul 20, 2008
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  2. sillyputty

    Blig Merk Guest

    Didn't realize how bad AMD/ATI was doing. AMD stock is 1/10th of what
    it was 2 years ago ($4 now vs $40 then). They lost almost $4 billion
    this past year. Intel market capitalization is over 60 times AMD.
    Intel made a net profit of over $7 billion in the same period. Intel
    is rolling out dual and quad core 45nm and AMD still hasn't been able
    to come out with 45nm at all. Intel is working on 32nm with over 16
    cores for next year.

    We could see AMD/ATI fail next year.
    Blig Merk, Jul 21, 2008
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  3. sillyputty

    geoff Guest

    AMD once had a clear-cut opportunity to distance itself from Intel
    .. . . but that assumes a static situation. If AMD took the lead and/or had
    new technology, Intel would offer those guys, the techs, big bucks to work
    for Intel. That game goes back and forth.

    It seems AMD needs new technology to shoot ahead of Intel.

    geoff, Jul 21, 2008
  4. sillyputty

    Blig Merk Guest

    It looks like buying ATI was like taking a poison pill. Yeah, the
    current set of ATI graphics cards are doing alright but they also
    don't seem to be priced to make any huge profits. Plus, once Nvidia
    gets 45nm versions of the GX260 and GX280 on the market towards the
    end of the year at just about the same price point, they are going to
    clobber the ATI cards since the GX260 (lower end) is about even with
    the HD4870 (high end) in performance right now.

    The AMD/ATI financials are here. AMD stock value is 1/4 of what it was
    last year at the same time. There are a lot of big negatives on their
    balance sheet:


    And this page has even more details. Wow, all of AMD is now worth less
    than half of what they paid for ATI in 2006! Looks like that was a
    really bad move.


    "This quarter's results bring AMD's total losses to $5.5 billion in
    less than two years."

    "AMD's total market value is now about half of the $5.4 billion it
    paid for graphics-chip maker ATI in 2006."

    "In December, AMD delayed the widespread release of a new chip called
    Barcelona because the product was running too slowly and causing
    errors with some software."
    Blig Merk, Jul 21, 2008
  5. sillyputty

    Dave Guest

    I'm not so certain. In the short term, the numbers seem to suggest that AMD
    buying ATI was a bad move. And the future might indeed show that it was a
    bad move.

    HOWEVER, in the context of how hardware components are going to evolve over
    the next (roughly) ten years, AMD is still in a better position (after
    purchasing ATI) to compete with Intel / nvidia in the LONG run. That is, if
    their current financial problems don't totally doom the company to

    You need to keep in mind that the CPU, as we know it today, will soon be
    replaced by the GPU. In other words, AMD would have to start producing
    higher-end "graphics cards" (graphics chips really) or go out of business.
    This applies to Intel as well, but Intel has been kinda sorta dabbling in
    graphics chips for a long time. So Intel wouldn't necessarily need to buy
    an ATI or an nvidia to prepare to retool for the new platforms on the near
    horizon, where the GPU takes over the CPU functions.

    I know it might be hard for some people to imagine, but the CPU as we know
    it today is quickly becoming obsolete. Graphics chips have advanced so far
    and become so powerful that soon it will be unnecessary to even install a
    CPU in a computer. The graphics processor will soon be so powerful, that
    asking the GPU to also perform the CPU functions will be like tossing a bag
    of concrete in the back of your pickup. Will the "engine" notice the extra
    load or slow down at all? Nope. Likewise, the CPU functions, if handled by
    the GPU, will not noticeably slow down the GPU at all.

    That is the future of the PC platform...no video card, just a video chip
    (GPU) on the mainboard, where the CPU used to be.

    So it was the RIGHT thing for AMD to buy ATI. It was their only route that
    might possibly lead to the long-term survival of the AMD corporation. Was
    it a mistake? I think in the long run one of two things will happen:
    1) AMD/ATI will overcome current financial problems and survive long enough
    to produce the new GPUs (which function as CPUs also) that bring the
    combined corporation back to profitability.
    2) AMD, as a corporation, might go bankrupt or be sold to Intel or nvidia
    or someone else. But IF this happens, it will not be as a result (direct or
    indirect) of the purchase of ATI. Without ATI, option 2 would have
    happened, eventually. The purchase of ATI was the only thing that MIGHT
    prevent it.

    I'm hoping 1 will happen. -Dave
    Dave, Jul 21, 2008
  6. sillyputty

    Blig Merk Guest

    That is a nice dream but that is all it is. GPU stands for Graphics
    Processing Unit and CPU stands for Central Processing Unit. GPU's are
    highly specialized for very specific types of calculations and have no
    basic Input/Output capabilities (talking with external devices). Even
    the recent efforts at a supercomputer on the desk are using general
    purpose CPU's with GPU accelerators. Yes, there are physics
    accelerators and video transcoder code being transported over to the
    GPU now and they are able to process those types of operations much,
    much faster than a CPU. But then, look who is doing that. Nvidia, not
    ATI. The video transcoder accelerator is coming for the Nvidia GPU
    very soon.

    No, the decision to buy ATI at such a huge price just at the time they
    did, was a very bad move for AMD. It diverted a lot of financing and
    resources away from their CPU development at the least affordable time
    for them. It stalled their 65nm fabrication to allow Intel enough time
    to get their Core 2 Duo out and it has basically shackled them from
    even getting close to 45nm when Intel has had 45nm Wolfdale out for
    several months now. Now, Intel is making such a huge profit that they
    are slashing the price of Wolfdale by 30%. They know this is like
    chopping off AMD at the knees right after kicking them in the nuts.
    AMD can't recover from this. They don't have a magic rabbit under a
    hat to pull out. AMD is shedding assets now like a garage sale. They
    might not totally collapse but it is a good possiblity it will split
    apart into AMD and ATI again, to be bought off by other companies.
    Blig Merk, Jul 22, 2008
  7. sillyputty

    geoff Guest

    Hopefully amd has another rabbit in their hat, but it's unlikely. looks
    It isn't that simple. A programming language used by many customers had the
    same issues, to the point where the company put in its 10-Q how bad the
    market was and no one wants the product and there is no future for it.

    What really happened is they were bought by another company and the language
    is being happily used by many.

    The suggestion that there will be a big hole, once called AMD, is not
    reality either.

    geoff, Jul 22, 2008
  8. sillyputty

    Dave Guest

    It's not a dream. Within 10 or 15 years maximum, main internal components
    will likely be sold as one card, probably called a mainboard. But it will
    have everything built in. ONE chip on that card, the GPU, will handle CPU
    and GPU functions. Current GPUs have no basic input/output capabilities.
    But it would be trivial to add those capabilities to a GPU...especially for
    a company like AMD, if they were starting with a decent GPU designed by
    ummmmmmm...ATI, perhaps. :)

    The only thing I'm wondering about is, will we be able to upgrade that card
    by replacing the chip, like we currently can do by replacing the CPU or
    replacing the video card? Or will we have to replace the whole "mainboard"
    to upgrade? -Dave
    Dave, Jul 22, 2008
  9. sillyputty

    Dave Guest

    Well if desktops get as integrated as laptops, that won't be all bad. It
    might lead to some really powerful PCs, cheap. To see what I mean, look at
    video cards sold today, and over the last few years. When a new video card
    comes out, it is praised as being really powerful and fast, blah blah
    blah...and it's typically pretty expensive, relatively speaking. But within
    a year (sometimes less) that same $200 or $300 video card can be found on
    sale for like $50 after rebate. And it's no less powerful than it was when
    it first came out. It's just that it's no longer the fastest thing on the
    market, so it can't really be sold at a premium price point anymore. But
    it's still got way more processing power than the vast majority of computer
    users / builders need.

    Same thing could happen when desktops get integrated to the point where just
    about everything (except power supply) is on one card. When a new design
    comes out, I'm sure you will pay a few hundred bucks for it...or wait until
    next year and get it practically free after rebate.

    Only bad thing I see is that you won't be able to customize a PC as much as
    you can do today. For example, if you really love ATI video solutions but
    your favorite mainboard brand decides to use nvidia GPU, then you have a
    choice to make, and you can't get everything you want. Today, if you want
    an Asus brand mainboard with a ATI video card for example, you can do it.
    Or you can buy an nvidia video card or a Intel mainboard or.... -Dave
    Dave, Jul 22, 2008
  10. sillyputty

    geoff Guest

    Well if desktops get as integrated as laptops, that won't be all bad. It
    I doubt it, the price/performance ratio of laptops is abysmal. If desktops
    become like laptops, companies will create marketing levels, want more, pay

    The PC industry is struggling now, if the industry used the integrated
    approach, it would make their lives that much harder.

    geoff, Jul 23, 2008
  11. sillyputty

    fusion Guest

    1) Dirk Meyer was and is in charge of production, AMD is where it is
    mostly because of Meyer's multiple manufacturing decisions, now he is
    the CEO,no more excuses.

    2) Meyer is an ex-Intel guy,and his buddies in Israel, where Intel
    manufactures Centrino and others with special
    circuits ,gates,instructions, etc., always had the idea to put all
    CPU's world production over there ONLY, they are fanatics,they don't
    believe in competition like we do in the USA, I DON'T TRUST MEYER AND

    3) AMD must be under christian control or we will lose the Internet
    as we know it, because with only Intel,we are all gone....
    fusion, Jul 23, 2008
  12. sillyputty

    geoff Guest

    Well if desktops get as integrated as laptops, that won't be all bad. It
    It just occurred to me, we have that now, integrated systems, to a certain
    degree with a MAC.

    My dad got a MAC, one piece unit except for the keyboard and mouse. I've
    worked on integrated systems as well, like HP Unix boxes.

    If the PC industry switched to that then it would drive them out of business
    for home users pretty much.

    geoff, Jul 24, 2008
  13. sillyputty

    Dave Guest

    You can't compare the two. More than half the cost of a typical laptop
    is the display. Plus, many components are restricted to save on heat
    generation and power use. So of course the price/performance ratio of
    laptops is abysmal compared to desktops, and that wil likely never
    Like video cards today? Like I said before, that's not bad. -Dave
    Dave, Jul 25, 2008
  14. sillyputty

    rickman Guest

    Are you old enough to remember when there were at least five different
    companies making x86 CPUs? What happened to them all? They were
    going under, unable to compete with Intel (and AMD to some extent) and
    were bought by other companies who wanted the licenses to manufacture
    x86 CPUs with the Intel microcode. I remember that National bought
    one and after a few years of not knowing what to do with it sold it
    off again. I believe that was the unit that is now part of ASUS
    marketed as VIA chips. Another ended up with ST Micro which now makes
    very low end x86 CPUs for embedded work.

    None of these companies are making any product that is sold into the
    desktop/laptop market place in any significant manner.

    If (or should I say When) AMD is taken to the auction block it will
    likely be split up. Many of its assets are worth something in
    themselves, for example the foundries. ATI is another significant
    asset if AMD doesn't run it into the ground trying to stay alive. The
    CPU portion of its business may or may not fit well into anyone else's
    business model. If you ran a billion dollar company, would you want
    to pay even $0.10 on the dollar to get into competition with Intel???

    I have been watching AMD as a stock for almost 20 years. I was able
    to pick three times in its history when it was down for the count and
    I was certain that it would be back on its feet in a year. I made
    significant money on this as did a few of my believing friends. But
    like others have said, they don't have any rabbits up their sleeve
    this time. There is nothing in the works that will let them compete
    again with Intel. They are a full process node behind assuring that
    Intel can undercut them and still make money.

    Every year AMD is losing money equivalent to the entire market cap of
    the company. They are going to start selling off assets to try to
    stay afloat. But they won't be able to borrow any more money and
    their days are numbered. Even if the economy turns around big time,
    they likely won't be able to pull up their average selling prices
    enough to make a profit.

    This can't continue long. Someone posted about the "long term"
    outlook for AMD... well we are all dead in the long run and AMD is
    likely dead in the short run.

    Oddly enough, the only feasible bailout for AMD is Intel! They won't
    want to be alone in the marketplace because of all the anti-trust
    issues. So they may find a way to funnel some cash into AMD, enough
    to keep them afloat. But I'm just speculating there.

    rickman, Aug 2, 2008
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