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AMD announces plans to toss out its dead weight.

The news coming out of AMD hasn't been on the most positive note in the past few weeks. The company announced in early April that it will cut 1,600 jobs by the end of 2008 representing 10% of its workforce. The reason for the cuts came as a result of steep declines in every business arena that AMD competes.

Four days later, the company's Chief Technology Officer, Phil Hester, stepped down from the company with no replacement in sight.

Today, AMD released even more unsettling news in the form of its Q1 2008 earnings report. As previously forecasted by AMD, revenue fell 15% from the previous quarter to $1.505B and the company experienced a net loss of $358M. Operating losses totaled $264M and the company faced a charge of $50M due to its 2006 acquisition of ATI.

"A seasonally weak first quarter was amplified by a challenging economic environment for consumers and lower than expected revenues of previous generation products, resulting in lower than expected revenues in all business segments," said AMD CFO Robert J. Rivet. "However, we are encouraged by the market acceptance of our Quad-Core AMD Opteron server processors as well as our new chipset and graphics offerings."

After experiencing an entire year of losses, AMD is now looking to restructure its business. The company will now put all of its divisions under the microscope and make the decision to sell off some of its underperforming units in order to become profitable in the second half of 2008.

"It is clear that our business environment has changed from just the second half of last year when we saw some of our non-core businesses on a path to growth and profitability. That is now questionable," said AMD CEO Hector Ruiz.

"As a result, we are embarking on a significant restructuring of our company to address the following: We need to intensely scrutinize all of our businesses in order to ensure that our core x86 and graphics products are on a healthy path to leadership and profitability," Ruiz continued. "We also need to scrutinize our non-core business and see how they fit into our plans toward growth and profitability."

AMD's consumer electronics division could be a prime target for cuts according to Technology Business Research analyst John Spooner. "It makes sense because it's not a core part of their business, and they can’t really afford to focus on consumer electronics at this point," said Spooner. They need to focus on processors for PCs and servers as well as graphics."

AMD is indeed ramping up to unleash a new wave of processors and graphics cards for consumers. As reported yesterday DailyTech, AMD is working on its quad-core 45nm Shanghai processor architecture along with its 6-core and 12-core variants.

On the graphics front, AMD is preparing for the launch of its successor to the Radeon 3850/3870 graphics processors. Radeon graphics processors based on the new RV770 core are expected to debut under the $300 price point.

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RE: No Sympathy Whatsoever..
By blaster5k on 4/18/2008 11:25:23 AM , Rating: 2
AMD has some great chipsets, making their platforms pretty appealing for some of us. They also still have a lower idle power draw, as shown in the Anandtech article that came out today. This makes them great for home servers and media PCs.

Of course, their graphics offerings have been a bit lackluster and performance per watt of their processors can't compete with Intel. Their mobile platforms are still inferior. And Phenom isn't a very appealing product at all.

RE: No Sympathy Whatsoever..
By Pirks on 4/18/2008 3:23:09 PM , Rating: 3
Speaking of chipsets - AMD offers the best integrated 3D video on the market (780G) and very low priced 45W single and dual cores, so any budget conscious PC builder can get helluva bang for a buck, and AMD, fortunately, realizes this is their strongest argument, and they are going to hammer it into nVidia and Intel, by keeping ahead of them on their 3D manufacturing process front (where's your 55nm chips, greeny boys, doh doh? missed it again, jen sun, 'cause you like it from Intel, huh?)

It points at fairly strong possibility of AMD being first to market with integrated CPU/GPU chip, and IF they can catch up with Intel in manufacturing process with the help from IBM (say hello to 32nm blue otellini ass :P) then maybe they will be okay.

Sooo... by looking at how 780G poops on every competitor including nVidia and how Phenom B3 is rolling out while keeping it price competitive with Intel quads, I say it's too early to bury or hate AMD. They still have some aces up their sleeve, they still have technological leadership with 3D manufacturing process and tight-integrated quads and multicore scalability for enterprise and memory controllers etc - they may survive, who knows. Why hate them? I've built myself a new intel gaming PC, but these days I'm eyeing some 780G sweetness with cheapo dualcore 45W AMD silicon to build an mATX box for my parents - just some internet video stuff, ya know - quiet, CHEAP, no video card ever needed with 780G - look ma, Intel is beaten again! Although for gaming AMD kinda sucks if you want ultimate performance, I agree with that.

I'm just saying that while Intel and nVidia are both pooping on AMD when the best performance is needed - AMD remains very attractive for the VAST majority of PC builders, those who value bang for the buck first and the most! So why hate AMD anyway?

RE: No Sympathy Whatsoever..
By V3ctorPT on 4/18/2008 4:54:09 PM , Rating: 2
I have a 780G mobo... just bought it a week ago for my second pc... bought a X2 2350BE, 2gb of mems and there it goes... cool, quiet and it doesn't break my wallet in electricty bills... Sure intel have excelent processors, but what made me buy this AMD platform was the price and the watts :P. AMD maybe down but i congratulate them for this price/performance/watt chip7 :P

RE: No Sympathy Whatsoever..
By crystal clear on 4/20/2008 9:09:07 AM , Rating: 2
Both you guys should read this-

AMD 780G: Preview of the Best Current IGP Solution

"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer

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