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Server unit performs well and APUs remain a promising competitor, despite general losses

Advanced Micro Devices, Inc. (AMD) still is in a very uncertain position.  Its GPUs are currently getting outpriced and outcompeted by NVIDIA Corp. (NVDA).  On the CPU side, it is shining in certain niches -- heavily threaded applications (with Piledriver server chips) or lightweight, inexpensive mobile CPU+GPU system-on-a-chip designs (with Trinity) -- but in many cases Intel Corp. (INTC) is the better buy.

Add to the mix that AMD is restructuring its leadership and plotting a switch to ARM Holdings Plc.'s (LON:ARM) proprietary CPU architecture, and you have quite a combustible mixture.

But AMD surprised investors with a better than expected fiscal fourth quarter, triggering over a 10 percent jump in the company's stock in today's trading.

Overall analysts expected, after write-offs were considered, that the company would post a loss of $0.20 USD/share ($146M USD), according to a survey of 27 analysts by The Financial Times.  AMD delivered a loss of a mere $0.14 USD/share ($102M USD).  Revenue was $1.16B USD; more in line with analyst expectation of $1.15B USD, a figure that marks a 32 percent drop year-to-year, and 9 percent drop quarter-to-quarter.

For the year 2012 marked a return to losses for AMD, after two years of narrow profitability.


The jump in shares was less a reflection that AMD's performance was good and more of a reflection that it wasn't as bad as was expected.  Overall AMD still has tough questions to answer.  But it can take comfort in that its cost cutting appears to be cutting losses at a faster than expected rate.

AMD is currently laying off 14 percent of its global workforce in a plan that "will be substantially completed in Q1 2013".  Other potentially good news for AMD includes that its report that it renegotiated its agreement with GLOBALFoundries, a move which could lower its operating costs.  

Also in the good news column, AMD reports server revenue rose, thanks in part to fruits of the SeaMicro acquisition.  AMD acquired the niche server maker for $334M USD in March of last year.  SeaMicro specializes in dense, power-efficient custom server designs for markets like cloud computing.  While small, the company is highly regarded in the enterprise sector.

For AMD, the good news is that cash bleed has slowed.  Now the company must refocus itself with a new vision, as it looks to close the wound altogether and seek a path to profitability.

Trinity in the wild
AMD will likely remain focused on APUs like Trinity [center].
[Image Source: Jason Mick/DailyTech]

Stay tuned as there's also other emerging storylines surrounding the company.  There's the pending allegations of intellectual property theft, which may or may not implicate NVIDIA in receiving AMD GPU secrets.  And late last year, rumors of a potential sale of AMD surfaced.  While those rumors have mostly quieted, AMD's losses could make it a potential acquisition target if the right buyer were to emerge.

Source: FT



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Next gen consoles
By jonnybradley on 1/24/2013 6:37:58 AM , Rating: 2
I have read rumors that both Microsoft and Sony will be using AMD in there next gen consoles. This would be good custom for them if the rumors turn out to be true.

Also dose anybody know what is inside the new steam box, have tried looking into this but with not much success.

Like them or not we all need a stong AMD to stop intel monopolizing the x86 market.




RE: Next gen consoles
By FITCamaro on 1/24/2013 8:10:46 AM , Rating: 2
Well one thing to consider is that with the last Xbox, Microsoft owned the rights to the AMD GPU. AMD designed it but didn't make money off the sale of each 360 because they didn't own the rights to the hardware.

If this proves true for the new consoles, then they really wouldn't make much off it beyond what they've already made.

Nvidia showed Microsoft what happens when they don't own the silicon in their console so last time they rectified that problem and I don't see them going back to it. I could be wrong though and maybe AMD gave them a hell of a deal with re-negotiations of parts prices built into the contract (those negotiations were what got Microsoft pissed off at Nvidia).


RE: Next gen consoles
By jonnybradley on 1/24/2013 8:52:01 AM , Rating: 2
interesting thanks for the info, I hadn't really thought about this. So if the same deal was struck then there probable would be a one off fee.

Xbox 360 uses intel cpu tho right. Anybody have info on how this deal works for both?

Anywho all speculation at the moment, time will tell.


RE: Next gen consoles
By Colin1497 on 1/24/2013 9:59:21 AM , Rating: 2
Original Xbox used an Intel CPU. 360 uses a PowerPC based processor from IBM called Xenon.


RE: Next gen consoles
By FITCamaro on 1/24/2013 9:57:50 AM , Rating: 2
The 360 uses a custom multi-core PowerPC chip designed by IBM that Microsoft also owns the silicon to.


RE: Next gen consoles
By SAnderson on 1/24/2013 12:31:40 PM , Rating: 2
Not having rights doesn't mean they can't make money off the hardware. They can make money selling the chips to Sony whether or not those chips go into a Sold xbox or not. Qualcom/Broadcom doesn't make money off each phone sold, they get money from Samsung/HTC/etc because they bought the chips.


RE: Next gen consoles
By LRonaldHubbs on 1/24/2013 3:13:51 PM , Rating: 2
I think what FIT means is that AMD didn't own the design and does not fab the chips. That means AMD got paid up front for the design, and since Microsoft owned it they could source the hardware from any fab they please. If Microsoft still chose to have AMD fab the chips then yes AMD would make money from those sales. However, these days AMD is fabless. Microsoft would likely source the chips from Global Foundries, but they have the option of going to TSMC if they choose to do so, because they own the design. With the original Xbox nvidia owned the GPU design, so Microsoft had no choice but to source the chips from nvidia, which in turn sourced them from TSMC.


RE: Next gen consoles
By TakinYourPoints on 1/24/2013 4:37:06 PM , Rating: 2
quote:
Also dose anybody know what is inside the new steam box, have tried looking into this but with not much success.


The Steambox is two things. One is a suggested form factor spec for other companies to follow (small, quiet, good performance, no optical drive, HDMI, can fit in a living room). The other is Valve's own device, and that isn't as clear.

The only thing certain about Valve's Steambox is that it will come running Linux (you can install Windows yourself if you wish). Because of that I do not think it will be using AMD parts. AMD's Linux drivers aren't nearly as good as NVIDIA's, this has been an issue for a long time. Valve has also been working directly with NVIDIA for over a year getting Source running well under Linux, improving L4D2 performance from 6fps to over 300fps.

Obviously this doesn't guarantee anything, but the fact that Valve's Steambox will ship with Linux implies that NVIDIA hardware is a stronger possibility.


RE: Next gen consoles
By FITCamaro on 1/25/2013 8:15:27 AM , Rating: 2
I would say it's a definite since AMD hasn't invested as much into Linux support as Nvidia has.


RE: Next gen consoles
By TakinYourPoints on 1/25/2013 5:37:41 PM , Rating: 2
Yeah, they're way behind in that regard, makes Nvidia an obvious choice.


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