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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.

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This doesn't help me much
By Setsunayaki on 4/21/2007 4:25:41 AM , Rating: 0
AMD has a serious problem...They have a limit of 5042 Integer Performance (CPUMark 2.1). A 3ghz dual core and 2.4ghz single core, per core get the same number. They are bottlenecked by the hypertransport and high multipliers. They however have HIGH floating point performance. 573 is the fp performance of the X6800. 1200.5 is the fp performance of the fx-62.

A 1.6ghz A64 (2.4ghz downclocked to 1.6ghz) beats out the X6800 in Floating Point performance and at a lower multiplier, but gets squashed by more than double in Integer performance.

The problem with AMD quad cores or octal cores is that if they are based on the same Athlon lines, they will have to break the Integer performance bottleneck. They will have to improve the technology, not just add more cores.

Intel has two things on their side...They have low multipliers and high overclockability. The E6300 can be overclocked to 400 x 6 on stock cooling and in the time it takes for an A64 to complete a cycle, the E6300 has completed two full cycles and accessed twice. This means double the data and access running through. Secondly if you hit 400 x have around 650 fp and 12600 integer performance (CPUMark 2.1 scores). However vs an FX-62 or 72...The E6300 (400 x 7) access twice in the time it takes for the FX to access once (x 7 vs x 14 - 15). This really means that the double access in the same time really wipes the floor with the Athlon line.

I dont mind Quad or Octal cores.....but I dont just want "more cores", I want better performance and technologies and it seems that Intel is just raising the front side bus to get better performance and not actually improving the core 2 duo processors internally outside of a process shrink (from 65nm to 45nm).

Intel needs to improve Floating Point Performance. AMD needs to improve Integer Performance...However Intel has low multipliers (You can go down to x 6) and access a lot faster than AMD processors and high overclockability.

This is what Killed Intel Pentium 4s...A64s had the Hypertransport, Low multipliers at x9 - x 12 at the time. The P4s had x 12 - x 19. The AMD processors accessed faster and had more optimizations...Now Intel did the exact same thing to AMD, only they raised the bus..made a completely new architecture and now have LOW multipliers (the highest is 11).

The Athlon line has really reached its limit thanks to the Memory Controller and Hypertransport. This means that AMD is simply adding more cores......

Overclocked to 2.8ghz, a single core of the E6300 can beat out a dual core A64 processor's combined SMP performance. (I have tested this thoroughly...)It also beats out the X6800 stock speed (according to CPUMark 2.1).

AMD needs a new processor altogether..a new design. This is my belief. The A64 was amazing for years and still is great at Floating point, but those high multipliers combined with intels low multipliers, new architecture and high overclockability really are spelling doom for the athlon line. I don't think the Hypertransport can keep up....

If Im running at 2.4 and 2.8ghz and have found the difference between 4ghz (E6400 at 500 x 8) integer performance from a 2.8ghz (400 x 7 e6300) is 4% (according to CPUMark 2.1 scores), then I rather buy a e6320 for the extra 2MB cache that can give 2 - 10% performance increase on 2.8ghz and that would be the limit of the processor itself.

AMD really is in trouble and it seems their best way out is to combine with their aquired ATI and develop an Octal Core processor to be 4 CPUs and 4 Graphic processors and put them together to see where that gets them.

This is my opinion, Im not trying to Flame...I just think that there is a lot of work ahead. We have to remember that just giving higher buses and more cores is not the answer....We need to see better processors and I dont see a plan or roadmap for better processors ahead....just more cores and more caches as well as some die shrinks.

"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan
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