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The hits keep on coming for AMD

Last week, reports began to swirl around the internet that AMD slashed 5% of its workforce. AMD denied the reports and issued a statement saying, "We did not have a workforce reduction."

It appears that the reports of job cuts were true; however, the size and timing of the layoffs were wrong. According to Information Week, AMD plans to axe off 1,600 employees before the close of September -- this would represent a 10% reduction in AMD's current workforce of 16,000 employees.

The jobs are a necessary move to help lift AMD from the gutter in terms of financial performance. AMD did not disclose which locations or what positions within the company would see the bulk of the workforce reduction.

AMD had a rough 2007 and reported revenues of $1.77B and a $1.722B loss during the closing quarter of the year. 2007 yearly totals saw AMD with $6.012B in revenue and a net loss of $3.379B.

AMD expects that Q1 revenue will come in at roughly $1.5B or 15% lower than Q4 2007 -- the loss came from an unexpected decline in every market that AMD competes.

We will still have to wait a few days longer to hear the full damage report for AMD's Q1 earnings. Despite the already grim forecast, AMD is looking forward to the latter half of the year when it will push its 45nm processors to customers.

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Capital Investments
By Hydrofirex on 4/7/2008 9:43:03 PM , Rating: 2
an unexpected decline in every market that AMD competes.

And the credit crunch continues... with the R word floating around is it any wonder that businesses and consumers are spending a little less of their discretionary income?

Someone is going to have to buy AMD; they are not doing a good job at competing with Intel. I'm Standing behind my belief IBM would be perfect. Maybe a Sun then? Well, someone is going to buy them if this continues.



RE: Capital Investments
By Master Kenobi on 4/7/2008 9:54:34 PM , Rating: 2
IBM doesn't want to deal with it. AMD does not fit into the IBM business model. Sun is also largely going the same way IBM is in terms of business. Best bet would be either an investment firm.

RE: Capital Investments
By Slappi on 4/7/2008 10:11:26 PM , Rating: 4
If AMD's stock price keeps going down I might buy them.

RE: Capital Investments
By Hydrofirex on 4/7/2008 10:15:40 PM , Rating: 2
I keep hearing that here, but I don't see why any firm with complementary patents and R&D wouldn't jump at the chance to get into the consumer market with an established brand. An investment firm is going to do nothing for AMD. You might as well break it up and sell it piece by piece.

I definitely hear you, but I don't find it to be a compelling argument.


RE: Capital Investments
By StevoLincolnite on 4/7/2008 10:44:46 PM , Rating: 2
OR allow Via to swallow AMD, Would be perfect they already bought out Cyrix and S3, so why not AMD and ATI?

RE: Capital Investments
By defter on 4/8/2008 2:43:34 AM , Rating: 2
I keep hearing that here, but I don't see why any firm with complementary patents and R&D wouldn't jump at the chance to get into the consumer market with an established brand.

Because it would be a very expensive chance, if someone buys AMD, they inherit AMD's huge debts, then they need to pour several billions in each year to R&D and new FABs to stay even remotely competitive.

In addition, "getting in the consumer market" means competing directly against Intel and NVidia starting from disadvantageous situation. AMD has already failed this game. Why would AMD fare any better than before if a another company would buy it? The risk/reward ratio of fully acquiring AMD is simply HUGE.

An investment firm is going to do nothing for AMD. You might as well break it up and sell it piece by piece.

Unfortunately, this seems to be only reasonable alternative. E.g. sell GPU patents/technology to NVidia, sell FABs to some foundry (TSMC, Chartered, IBM) and so on. Then AMD could continue its life as fabless, VIA like, niche CPU designer.

RE: Capital Investments
By eye smite on 4/8/2008 12:20:20 PM , Rating: 2
If someone were to offer to buy AMD, I'm sure they would ask alot more than the current stock prices. They would take a Yahoo type stance and valuate the company on many more things than just the stock prices and it wouldn't exactly be cheap.

RE: Capital Investments
By crystal clear on 4/8/2008 6:50:40 AM , Rating: 3
An investment firm is going to do nothing for AMD. You might as well break it up and sell it piece by piece

An investment firm brings in a new management team & additional financing.

Thats what AMD needs right now better management & additional financing.

The current management team should be fired-first before any of those AMD employees to be fired, in the near future.

AMD has the best available technology/designs - all just waiting to be implemented.

Do some reading, like the links below-

Inside Barcelona: AMD's Next Generation

Barcelona is the first revision to AMD’s microarchitecture since 2003. Rather than starting from scratch, Barcelona builds on the previous generation and subtly improves almost every aspect of the design. In many ways, this mirrors the evolution of computer architecture – there are very few techniques that can give a large boost on a wide spectrum of applications. Instead, architects are turning to many smaller improvements, just as AMD has done with Barcelona. The only obvious trick left in the bag for AMD is multithreading, which could provide a big boost in a future microarchitecture, such as the K10. However, this style of conservative, consistent design has worked very well for AMD in the past.

Barcelona is a solid improvement across the board and should give AMD momentum across several key markets. The performance advantages will be decisive for HPC applications and MP servers, other areas will be close in performance. Hence, there is quite a bit to look forward to in the near future with the debut and performance numbers for Barcelona. No matter what, AMD's engineering teams deserve kudos for a solidly executed product.

Inside Nehalem: Intel's Future Processor and System

After you have done this, you will agree with me.

I would turn AMD into a R&D company focusing exclusively on R&D & license its technology/designs/patents.

There are plenty of profits in such a venture.

As for an Intel competitor-

Competing with Intel in the future is going to be extremely difficult for AMD technically & financially.

Just as there is a R&D alliance of IBM of which AMD is a member,this should be extended to manufacturing & marketing.
That would imply a common architecture/platforms etc.

In short only such a alliance can effectively compete in the future with Intel.

AMD alone cannot do so & eventually collapse.

RE: Capital Investments
By crystal clear on 4/8/2008 6:56:09 AM , Rating: 2
The articles mentioned in the links provided were written
by "David Kanter".

RE: Capital Investments
By eye smite on 4/10/08, Rating: 0
RE: Capital Investments
By MrBlastman on 4/8/2008 9:55:10 AM , Rating: 3
It would be icing on the cake if... Nvidia were to buy AMD.

That would make my day. They have the market cap superiority (though market cap meant nothing in the Sirius -> XM merger) and have demonstrated a far better approach to providing revenue and bottom line growth.

They have weaker sales but that has never stopped anyone. The biggest drawback would be Nvidia owns ATI so that would reduce competition (bad) - but, they bought out 3dfx and treated us with a far superior product afterwards (geforce), so they aren't full of hot air and slash and burn aka EA.

I'd prefer that to VIA any day as VIA has provided me with nothing but displeasure, annoyance and frustration over the years with their motherboard products.

Just another idea to add to the pool.

RE: Capital Investments
By Phynaz on 4/7/2008 10:25:14 PM , Rating: 4
IBM already has an x86 license.

If they wanted to be in the commodity cpu business, they would be.

RE: Capital Investments
By sgtdisturbed47 on 4/8/2008 1:52:27 AM , Rating: 2
AMD is going down, has been going down, and will continue to go down until they either go bankrupt or get bought out. AMD already bought ATI which was on it's own way down for a long time, but since AMD can't compete with Intel or nVidia, it makes perfect sense to can 1,600 employees in order to try to stay in business.

It's as simple as this: you either beat the bigger and better by coming out with something revolutionary, or stay behind and cater to a different niche. AMD already pulled from the enthusiast market by shutout, and now they need to just spend their money more wisely and back off of the high-end gaming market. If they continue to spend money on high-end gaming hardware, they will be bought out or bankrupt in 2 years, guaranteed.

RE: Capital Investments
By teckytech9 on 4/8/2008 1:34:26 PM , Rating: 1
Quite the contrary. There are foreign and domestic interests that won't see the collapse of AMD anytime soon. AMD has a history of launching comebacks, as anyone who has invested in the company knows that. Just look at the stock chart histories.

As for them backing out of the high-end gaming market, is a complete farce, since they invented it in the first place - remember 3DNow? Just wait till the next generation of CPU/GPU's from AMD are released. It follows from their acquisition of ATI, that AMD now has the "know-how" to release these new batches of processors to the market ahead of their competitor. In hindsight, I just think that AMD should have consulted with NVDA first, but now that ATI has been swallowed, a future AMD-IBM-NVDA alliance would be just awesome, if it ever happens.

Now if they can just get that secret gate ingredient mystery solved to speed everything up.

RE: Capital Investments
By crystal clear on 4/8/2008 2:14:49 PM , Rating: 2
Just to update you on something-

Toshiba samples Cell-based HD GPU

Toshiba has begun sampling the graphics chip it hopes will beat Nvidia and AMD at the GPU game: the Cell-derived SpursEngine SE1000.

The IBM alliance is hard at work - no place for Nvidia.

"Young lady, in this house we obey the laws of thermodynamics!" -- Homer Simpson
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