backtop


Print 75 comment(s) - last by crystal clear.. on Apr 25 at 12:48 AM

Q1 2007 performance is "disappointing and unacceptable" says AMD's chief financial officer

Ten days ago, AMD announced that it was planning to restructure its business due to a significant drop in quarterly revenue. At the time, the company was projecting its Q1 revenue to come in at $1.225 billion USD.

The official numbers are in and AMD has reported Q1 revenue of $1.233 billion USD and an net loss of $611 million USD. The numbers include a charge of $113 million USD due to the acquisition of ATI and $28 million USD for employee stock-based compensation expenses. AMD had revenue of $1.773 billion USD in Q4 2006.

The ongoing price war between AMD and Intel is partially to blame for the reduced earnings. Intel has been aggressively cutting prices on its current processors and AMD has been quick to respond. AMD as a result has witnessed lower average selling prices (ASPs) in addition to lower unit sales.

"After more than three years of successfully executing our customer expansion strategy and significantly growing our unit and revenue base, our first quarter performance is disappointing and unacceptable," said AMD CFO Robert J. Rivet. "We are aggressively addressing the issues that led to our significant revenue decline. We are aligning our business model, capital expenditures and cost structure with the goal of accelerating our return to profitability. Lastly, our customer relationships remain solid, reflecting their confidence in our strategic direction, current and new products, and technology roadmaps."

On a positive note, AMD reported $197 million USD in revenue from its graphics division in Q1 2007. This represented a 19 percent gain from Q4 2006. AMD's next generation DirectX 10-based R600 graphics processor is expected to launch within the next few weeks. The top of the line AMD ATI Radeon HD 2900 XT will feature 320 stream processors, 512-bit memory interface with eight channels, native CrossFire support, 128-bit HDR rendering, 24x anti-aliasing and HDMI output with 5.1 surround sound.

Looking to the near future, AMD plans to get its 65nm native quad-core Barcelona processors out the door during Q3. AMD has high hopes for the processors which will incorporate 2MB of L3 cache and AMD Virtualization (AMD-V) technology. "We expect across a wide variety of workloads for Barcelona to outperform Clovertown by 40 percent," said AMD's corporate vice president for server and workstation products, Randy Allen in January.

The company will not, however, begin production of 45nm processors until the first half of 2008. 45nm processors won’t actually ship until the second half of 2008.

Intel is well aware of AMD's plans and many have suggested that the company released early performance numbers for its quad-core Penryn processors to divert attention away from AMD's upcoming Barcelona. Intel's 45nm Penryn taped-out in January and will begin shipping in the latter half of 2007 -- roughly a year ahead of AMD's first 45nm processor.


Comments     Threshold


This article is over a month old, voting and posting comments is disabled

K10 is very important now
By OddTSi on 4/19/2007 9:42:09 PM , Rating: 5
When the price war started people were wondering if AMD would be able to keep up without going into the red. I guess this answers that.

The problem now is that AMD is HIGHLY reliant on K10 being a hit. If it's slower than Intel's top offering the price war will continue with AMD having to undercut Intel's prices and they won't be able to keep that up without doing some cost-cutting. If it's faster they'll be able to leave their prices slightly higher than Intel's and hope they can sell enough to get back in the black.




RE: K10 is very important now
By DrMrLordX on 4/19/2007 11:25:10 PM , Rating: 2
There's more to it than that. AMD has two trump cards up its sleeves with which Intel can not contend until they release Nehalem-based machines utilizing CSI:

1). Octal-core desktop systems. Remember QuadFX? What happens when you run two AgenaFX chips on a QuadFX board? That's right ,you get 8 cores on a desktop motherboard with unregistered DIMMs. In order for QuadFX to matter, AMD needs to make sure that QuadFX boards are released that are not buggy pieces of crap that cost $400.

2). HT 3.0 and HTX slots. This could make a huge difference depending on how much end-users benefit from buying and using HTX devices.

Performance-wise, we've heard all kinds of vague speculation about how well K10 will perform versus Conroe/Kentsfield and Penryn. Last I heard, overall performance of K10 could be as high as 40% higher per clock than Conroe/Kentsfield, though whether or not that proves to be true and how that data helps us to understand its relation to Penryn's performance remains to be seen. It could be anywhere from 10-20% faster than Penryn per clock, but again, that's just a guess.

K10 offerings will hit speeds as high as 2.9 ghz at launch fo what it's worth.


RE: K10 is very important now
By OddTSi on 4/20/2007 12:27:59 AM , Rating: 2
1) Look up Skulltrail (I believe that's what Intel's calling it now).
2) It could turn out to be a HUGE thing for AMD, but it's HIGHLY unlikely that it will do so just in this coming processor generation. That is more of a long-term thing.


RE: K10 is very important now
By Lakku on 4/20/2007 12:39:54 AM , Rating: 3
K10 offerings that are dual core will hit 2.9, but are probably going to stay there until the new year. The quad cores will supposedly launch at 2.5GHz or so. Already, Intel has trumped AMD. Penryn will launch around the time Barcelona does, and by Intels numbers released, looks to have a 5 to 10% advantage per clock over current C2D's and C2Q's. Add that to the fact they will launch in the low to mid 3GHz range, and AMD has a huge advantage to make up, though I think they may be able to. Also, that 40% increase number comes from ONE benchmark AMD has let no one actually see in person. I will wait to see, but AMD certainly isn't looking rosy at the moment.


RE: K10 is very important now
By deeznuts on 4/20/2007 3:19:05 PM , Rating: 2
I thought Anandtech said a few weeks ago K10 will launch at 2.0-2.2


RE: K10 is very important now
By defter on 4/20/2007 1:30:27 AM , Rating: 3
LOL, this is very funny.

quote:
1). Octal-core desktop systems.


A couple of questions:
1. How many users (percentage of total PC users) benefit now from quad core on the desktop?
2. How many users will benefit from choosing 8-core system instead of 4-core system for desktop?
3. How many users will pay now >$2000 (those Barcelona based quad core FXs won't be cheap, and then you need to have an expensive motherboard) for 8-core system?
4. How many users that answered yes to all above, don't have enough money to pay small (relatively to $2000) premium for FB-DIMM? Anybody can get 3GHz, 8-core desktop system now...

quote:
2). HT 3.0 and HTX slots. This could make a huge difference depending on how much end-users benefit from buying and using HTX devices.


These things will provide a zero benefit to the end users. End users don't put DSPs or FPGAs to their PCs. HTX/Torrenza is aimed for a small niche among server/workstation users.


RE: K10 is very important now
By leidegre on 4/21/2007 1:51:17 AM , Rating: 2
This reminds me on an old comment, which roughly can be summarized as:

"If you build it, they will come."

The idea of an 8-core desktop solution today is just odd, and probably expensive. But what happens when software develops to harness those cores? Obviously we'll never see a 800% increase in perfomance, over a singel-threaded application, but at one point the number of cores on your system, will eventually endup becoming a performance multiplier.

Anyway, I'll probably buy the K10 just for the sake of AMD, and as long as it aint a really poor bargin.


RE: K10 is very important now
By Axbattler on 4/21/2007 7:13:31 AM , Rating: 2
Timing and cost are crucial elements here. If the 8-core desktop solution can beat the competition without a huge cost premium, it will be a winner. People did not complain about the A64 not because they were thinking '64 bit applications will eventually get here', but because the A64 was often better than the competition even at the time even in 32bit app, and was priced at a level people could afford. In that sense, the 64bit element was gravy (that's not to say no one took advantage of it - but I am quite sure most were happy using it under 32bit WinXP).

If the 8-core system can't beat the competition the majority of the time and/or without a huge premium. I am sure that they will still sell - like the P4 Extreme, Athlon FX did. But such releases will only appeal to a fairly small amount of individuals, and if the AMD chip is still slower per core - then I suspect Intel will remain in a more attractive position for most. Personally I will go for the best within my budget. I have no issue going with AMD or Intel. Of course, I'd like AMD to stay in the market to provide competition. But it's up to their products to convince me.


RE: K10 is very important now
By osalcido on 4/22/2007 9:07:25 PM , Rating: 2
They already Built a QuadFx..... nobody came ;-)


By Laughing all the way 2220 on 4/23/2007 7:32:38 PM , Rating: 2
Yes Intel has deep pockets but that doesn't mean they always have the best technology. It goes back and forth, back and forth. Just because AMD posted a loss after integrating ATI- come on people that was like expected. This will not hurt AMD that much. What they have gained is something that will cost Intel a bundle to match- but I don't see Intel heading the integrated graphic-CPU core direction.

So AMD posted a loss big deal. Intel posted a loss last year as well.

It's so tiring and such a bore to hear the banter back and forth. Intel has always had and probably always will a powerful single chip solution. AMD has countered with an excellent chip but with incredible intercommunication between CPUs for multi-proc systems. Intel is the champ and AMD is the underdog challenger. If AMD could knock out Intel it would take years! Innovation will win the day and I don't see much of that in the Intel camp. Intead they've passed off Netburst as giving the user a better internet experience. Yes I've been to the Intel tradeshows. They need to come up with practical, unique ideas not just copy what AMD is doing.


RE: K10 is very important now
By Thorburn on 4/20/2007 7:24:55 AM , Rating: 2
quote:
K10 offerings will hit speeds as high as 2.9 ghz at launch fo what it's worth.


Where did you get this nugget of information from exactly?

From what I've heard K10 is going to 2.6GHz max, and thats by the end of the year with a launch speed of closer to 2.4GHz.


RE: K10 is very important now
By defter on 4/20/2007 1:23:50 AM , Rating: 2
quote:
If it's slower than Intel's top offering the price war will continue with AMD having to undercut Intel's prices and they won't be able to keep that up without doing some cost-cutting.


The problem isn't the performance, it's the volume. Intel will price it's E6700 at $183 in Q3, this chip will be faster than any K8-based CPU, including hypotethical 3.2GHz model. Even if Barcelona is clearly faster to Intel's CPUs, it won't help much in Q3 or Q4 2007 if >90% of AMD's dekstop shipments will be K8 based and thus sold below $180....


RE: K10 is very important now
By wrekd on 4/23/2007 10:57:06 AM , Rating: 2
quote:
The problem isn't the performance, it's the volume. Intel will price it's E6700 at $183 in Q3, this chip will be faster than any K8-based CPU, including hypotethical 3.2GHz model. Even if Barcelona is clearly faster to Intel's CPUs, it won't help much in Q3 or Q4 2007 if >90% of AMD's dekstop shipments will be K8 based and thus sold below $180....


Barcelona is a workstation/server chip ment to take on Xeon not an E6700. I don't think AMD expects this chip effect desktop shipments in the 2nd half of 2007.


RE: K10 is very important now
By Roland702 on 4/20/2007 10:43:24 AM , Rating: 2
I do agree with you. The only things that seem to be keeping AMD afloat atm is the deal with dell and people wanting to build cheaper computers consisting of say a X2 3600+ as they are still a bit cheaper ($90~ AUD here for me). However that's not to say that intel's recent price drops aren't so bad and that if you can afford the extra for a e4XXX chip then you mase well get one.

K10 and R600 are really important for AMD/ATI to regain market share and beat intel/nvidia. If anything AMD should have waited a bit longer to purchase ATI if they knew they were going to get their butts kicked performance wise from intel in the form of conroe/allendale.

Since I am getting some inheritance soon I am going to go get myself a new rig. I can't be bothered though for AMD/ATI to release their new parts, so for now I think I might get myself a E6600 and a 320MB 8800gts or a 7950gt (seeing as the G80 drivers have a variety of different problems here and there).


RE: K10 is very important now
By monkeyboy33 on 4/23/2007 5:29:48 PM , Rating: 2
I don't like intel's business practices, and I haven't purchased a PC based on their processors since 1995.
The intelligent consumer should look at the bigger picture rather than be a FPS fanboy with blinking LED fans and neon IDE cables who slavishly buys the processor with the higher MHz number.

Face facts, the Q6700 the Core2 and the P4 wouldn't even exist if not for competition from AMD. Without them, intel would continue to give us a souped up Pentium III at godawful prices and justify it by making commercials of dancing college students telling us intel is cool.

I will not buy intel, period. Maybe they will shape up and I might consider it in a few years.


"We’re Apple. We don’t wear suits. We don’t even own suits." -- Apple CEO Steve Jobs

Related Articles
Intel Unveils "Penryn" Performance
April 17, 2007, 9:11 PM
AMD Talks Details on K10
April 14, 2007, 11:46 AM
ATI Releases More "R600" Details
April 12, 2007, 8:06 PM













botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki