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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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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
"I f***ing cannot play Halo 2 multiplayer. I cannot do it." -- Bungie Technical Lead Chris Butcher
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