AMD Q414 results

[krumme]

@pablo

Your scenario for a restructuring plan implies AMD is a business made for making business for AMD shareholders.

Using GF (and thereby Mubadala) as a bank - eg the 200M - is seen 10 times before (what do we know about the conditions btw ? ), and just shows that is not the situation. That is aparently not in Mubadalas interest. Even a eg. zen cpu that is superior will not change that radically. It doesnt really matter. Mubadala will make sure, AMD is just floating enough to move some GF capacity, but not more than nessesary - the wsa and whatever makes sure of that - , because the rest goes to AMD shareholders. That also shows how attractive it is to buy AMD stocks.

Now that is the sort of ruling seen in europe in the pre enlightment age from stupid kings, and it asumes you got all the excellence yourself, and have unlimmited access to funds. The latter seems to be the case.

Mubadala can hardly sell AMD, but if, who should buy GF capacity then?

Now who in their sane minds will do long term business with that? I wonder what Sony / and MS wrote in the console contracts to get rid of that burden ? (besides GF ofcource).

 

[krumme]

This summer Samsung is printing tons of 14nm finfet Apple A9 cpu, using GF as a backup for capacity. And skylake on 14nm is about the same timeframe.
At the same time AMD is trying to bring Carizo to the market using 28nm GF process. Its incredible idiotic and a waste of ressources.

(edit: pls. dont give me that about transistor price, consumers dont care about that, what matters is margins and profitability)

 

[boozzer]

I don't know why people think AMD's new flagship GPU is going to actually draw 300W... at this point, even AMD doesn't have its final specifications hammered down yet. And that engineer may have been just "sprucing up" his résumé.

I honestly don't give a damn about the wattage as long as it isn't over 400 watt on load. all I care about is performance when gaming. if 300 series flagship card is over 25% or faster over 980, I am sure the smart gamers would pick them up, even if there aren't many of them left.

 

[mrmt]

Some quotes:

http://seekingalpha.com/article/283...-results-earnings-call-transcript?part=single

Lisa Su - President and CEO
Yes, Harlan. So, thanks for the question. Let me give you some color on that.

So if you take a typical PC seasonality, would be about minus 7% or so, and typical game console seasonality is probably a little bit more than that. What we said in the prepared remarks is that we are taking an opportunity to correct the channel inventory in computing and graphics. So, you know, overall down minus 15%, that is more heavily weighted towards computing and graphics than towards enterprise, embedded and semi-custom.

(...)

Lisa Su:

So I think overall when we look at the OpEx side of the house, it is probably true that, on the CG side, it's where the expenses are coming down, more than probably in the embedded, enterprise and semi-custom. But overall we are managing the OpEx in line with revenue while protecting the investments on the R&D.

(...)

Lisa Su - President and CEO
Sure. So the way I would say it is something like this. It's clear that our mobile products are very competitive. We've invested heavily in mobile. And you see that with some of the successes that we've had. Relative to desktop, mobile and desktop actually share a lot of technology. So, certainly there's a lot of sharing there in terms of the cores and the IP and the designs.

There are things that we will do to improve the competitiveness of our desktop products as we go forward. And so again, I view it as a market that we know well. And within the spend envelope that we've already defined, we will continue to compete in both the desktop and mobile markets.

(...)

Lisa Su - President and CEO
I think the key for us, as I said, is on EESC, the enterprise, embedded and semi-custom, I think we have a good path. Some of it will depend on what the market does with game consoles and we'll just have to see how that develops over time.

I think on the computing and graphics business, we can improve our execution and there is a lot of focus, at least from my standpoint, to ensure that our 2015 product launches are quite strong. So that's important for us to really stabilize that business, and that will certainly be key to our second half performance.

Basically computer and graphics business is poised to another plunge, internally it is going to shrink and they still refuse to provide guidance for the second half of the year. All they can say is that they aim to "stabilize" the business. 2015 will be a long year.

 

[mrmt]

At the same time AMD is trying to bring Carizo to the market using 28nm GF process. Its incredible idiotic and a waste of ressources.

I think this has more to do with Globalfoundries not having a viable 14nm process until last year than with AMD willing to waste resources on 28nm. It was the 28nm way or the highway for them. Being tied to GLF sucks.

 

[Idontcare]

I think this has more to do with Globalfoundries not having a viable 14nm process until last year than with AMD willing to waste resources on 28nm. It was the 28nm way or the highway for them. Being tied to GLF sucks.

Yeah what people have to recognize is that GloFo licensing Samsung's 14nm process basically only helped the customer's of Samsung who might be interested in having wafers processed in a GloFo fab instead of a Samsung fab.

Because the design time for the IC's are 3-4 years. And the only people who would have been designing for Samsung's 14nm design rules and parametrics are customer's who had intended to have them fabbed at Samsung.

Anyone who was designing for GloFo's 14nm-XM node completely lost out. Their design efforts up to that point were for naught. And if they wanted to have anything produced on Samsung's 14nm, be it at GloFo or at Samsung, then the clock started over for them on that fateful day (or however earlier they were informed of it).

AMD is on 28nm because they really got screwed in having GloFo as a foundery for their x86 chips. Had they been with TSMC then at least they'd have had some 16FF+ designs well underway, or if they had been with Samsung then they'd have some 14nm designs well underway (and able to fab them at GF if they so chose).

But that isn't what happened, so their sub-20nm designs are definitely going to be a year behind where they had wanted them to be and for no fault of their own.

 

[ShintaiDK]

Some quotes:

http://seekingalpha.com/article/283...-results-earnings-call-transcript?part=single



Basically computer and graphics business is poised to another plunge, internally it is going to shrink and they still refuse to provide guidance for the second half of the year. All they can say is that they aim to "stabilize" the business. 2015 will be a long year.

Seems the graphics division is a lost cause as well now. Unless they can pull out some kind of extraordinary miracle in Q2/Q3. We are talking about a combined CPU and graphics division that may be as a low as 500M$ revenue for the Q. And an R&D budget completely shattered.

 

[mrmt]

Seems the graphics division is a lost cause as well now. Unless they can pull out some kind of extraordinary miracle in Q2/Q3. We are talking about a combined CPU and graphics division that may be as a low as 500M$ revenue for the Q. And an R&D budget completely shattered.

The GPU division is far cheaper to fund and has the most promising outlook. It's far easier for AMD to fight Nvidia: They don't have a node handicap, they aren't tied to GLF there, their graphics IP might add value to the embedded business and the R&D gap between them and Nvidia is significant but not unsurmountable.

I think the real trouble is with their CPU division: They will fight either Intel or the other ARM players, the value of the CPU division is highly questionable for their embedded business and they do have a node handicap compared to the top players and the R&D GAP is really huge. And depending on the new scope of their embedded business, a small cheap x86 core and off-the-shelf ARM cores might do the trick.

So I wouldn't count on the GPU division demise now. Even if they fall behind NVidia it is far cheaper to chase them than to chase the top dogs in the CPU division. I think the real threat today is to the CPU division. A close to 20% drop in the consumer division is surely enough to harm margins, put them in the red and wipe out whatever gains they can make with their embedded business, and given how this is the R&D budget already, further cuts are likely to delay or force scope reductions (like Excavator).

 

[AtenRa]

So with a 15% decrease in revenue for Q1 2015, they will be almost as Q1 2013.

Heh, all this efford and they are back where they started. It reminds me of Greek financials, 5 years of austerity and we are at the same shithole.

As for AMD doom, even with Q1 2013 Revenue they dont have a real problem if it will only be for one or two quarters. Seams 2015 will be another 2013.

 

[ShintaiDK]

So with a 15% decrease in revenue for Q1 2015, they will be almost as Q1 2013.

Heh, all this efford and they are back where they started. It reminds me of Greek financials, 5 years of austerity and we are at the same shithole.

As for AMD doom, even with Q1 2013 Revenue they dont have a real problem if it will only be for one or two quarters. Seams 2015 will be another 2013.

Why would anything change revenue wise in 1-2 quarters?

Also their R&D budget is rock bottom now with another 15% cut despite the hot air about not touching it.They blew the entire low margin console revenue away in 6 quarters. Whats the next thing to save them? The combined CPU and Graphics division is essentially dead.

 

[Abwx]

Why would anything change revenue wise in 1-2 quarters?

Also their R&D budget is rock bottom now with another 15% cut despite the hot air about not touching it.They blew the entire low margin console revenue away in 6 quarters. Whats the next thing to save them? The combined CPU and Graphics division is essentially dead.

Among other things, if they have a few $ left, they really should adress the viral marketing waged by their competitors, not only sue intel for contra revenue practices....

 

[AtenRa]

Why would anything change revenue wise in 1-2 quarters?

Also their R&D budgets are rock bottom now with another 15% cut.They blew the entire low margin console revenue away in 6 quarters. Whats the next thing to save them? The combined CPU and Graphics division is essentially dead.

We had the same conversation two years ago, you and others were talking in the same tune of doom and how AMD were going for bankruptcy.



Since we don’t know what contracts they have or are going to make for 2015, all we should do now is wait and see how they will perform the coming quarters.

 

[ShintaiDK]

The GPU division is far cheaper to fund and has the most promising outlook. It's far easier for AMD to fight Nvidia: They don't have a node handicap, they aren't tied to GLF there, their graphics IP might add value to the embedded business and the R&D gap between them and Nvidia is significant but not unsurmountable.

I think the real trouble is with their CPU division: They will fight either Intel or the other ARM players, the value of the CPU division is highly questionable for their embedded business and they do have a node handicap compared to the top players and the R&D GAP is really huge. And depending on the new scope of their embedded business, a small cheap x86 core and off-the-shelf ARM cores might do the trick.

So I wouldn't count on the GPU division demise now. Even if they fall behind NVidia it is far cheaper to chase them than to chase the top dogs in the CPU division. I think the real threat today is to the CPU division. A close to 20% drop in the consumer division is surely enough to harm margins, put them in the red and wipe out whatever gains they can make with their embedded business, and given how this is the R&D budget already, further cuts are likely to delay or force scope reductions (like Excavator).

The problem is the market shift. We already saw in Q3 that AMD started to bleed discrete graphics marketshare in an alarming rate(71.5% vs 28.5%). By the numbers, that should have accelerated further in Q4. Its obvious AMD doesnt have any new products in Q1. And they will bleed more there as well as stated by their CEO. Its a negative feedback cyclus.

 

[ShintaiDK]

Among other things, if they have a few $ left, they really should adress the viral marketing waged by their competitors, not only sue intel for contra revenue practices....

Here I thought it was AMD that had viral marketing going and buying influence on review sites. So the advocacy, influencer and AMD sponsored parts of sites didnt happen? Or how is that again?

 

[ShintaiDK]

We had the same conversation two years ago, you and others were talking in the same tune of doom and how AMD were going for bankruptcy.



Since we don’t know what contracts they have or are going to make for 2015, all we should do now is wait and see how they will perform the coming quarters.

Its the CPU division that pays the breed and butter. R&D if you like. R&D havent been lower in over 10 years. It dropped from 3720M$ to 3132M$ revenue in the CPU and graphics division YoY. And its the main loser in the expected Q1 numbers. And the next YoY may end up between 2000 and 2500M$ for the division.

 

[Abwx]

Here I thought it was AMD that had viral marketing going and buying influence on review sites. So the advocacy, influencer and AMD sponsored parts of sites didnt happen? Or how is that again?

You are lying to yourself, with their budget they dont have enough money to finance a regular marketing department, let alone a shwadow marketing, on the other hand Intel has all the necessary money for such marginal spendings, as proved by scores of forums, including this one, isnt it...

Besides i find it funny and highly hypocritical that you re claiming that AMD is the one that is most probably using thoses despicable methods while it s obvious that they are ethicaly well above their competitors...

 

[III-V]

I honestly don't give a damn about the wattage as long as it isn't over 400 watt on load. all I care about is performance when gaming. if 300 series flagship card is over 25% or faster over 980, I am sure the smart gamers would pick them up, even if there aren't many of them left.

Well, you're in the minority. Not among enthusiasts, but in regards to AMD's market. OEMs do care about power, and that's where the money is. Supercomputing is another place, and if AMD does not have good performance/watt, they will not make any progress on this lucrative front.

Not that the GPU would really get a lot of wins with OEMs, even if it were around 200W, but the point I am making is that yours or anyone else's individual preferences matter relatively little -- the money lies elsewhere.

But it's unlikely that it'll be 300W. No single GPU in the history of ever has drawn that much. Even the broken 480 had a TDP of 250W -- although that figure from Nvidia was likely on the conservative side, my point stands: 300W is a lot, and it's likely an extremely conservative estimate, based on something like power delivery capacity or cooling capacity, rather than what the card will actually draw.

 

[sm625]

AMD needs to borrow $2 billion and use it to buy back its own stock. That seems to be the prevailing strategy these days. Oh, and they need to fudge their non-GAAP numbers more.

 

[CHADBOGA]

You are lying to yourself, with their budget they dont have enough money to finance a regular marketing department, let alone a shwadow marketing,

Guys like you would be cheap.

 

[mrmt]

The problem is the market shift. We already saw in Q3 that AMD started to bleed discrete graphics marketshare in an alarming rate(71.5% vs 28.5%). By the numbers, that should have accelerated further in Q4. Its obvious AMD doesnt have any new products in Q1. And they will bleed more there as well as stated by their CEO. Its a negative feedback cyclus.

The negative feedback cycle in the CPU division is far worse than the cycle in the GPU division. AMD is already inviable in lots of segments on the CPU market, but hasn't reached that point in the GPU division. A good 300 series can make them recover a lot of share in the desktop and expand their footprint in the server market, but in the CPU front they have nothing in 2015 that could change their fortunes.

 

[Erenhardt]

Guys like you would be cheap.

lol

 

[Abwx]

Guys like you would be cheap.

Ad hominem and thread crapping, that s the "value" you re providing with your post, i guess that s it s well below cheapness, i dont even count the usual hate for anything AMD related....

 

[Qwertilot]

I wonder when the mass market 300 series is going to arrive though?

The announced/rumoured 300's look to be mostly aimed at compute style usage, with very high end desktop as an option. Lots of money/margins there of course so it'd make sense Not right now either of course.

HBM letting the APUs starting to really eat into huge chunks of the discrete market might end up helping them get a chunk of the market there.

 

[Genx87]

If Qualcom buys AMD. I dont see x86 chips being sold by Qualcom. They will use GPU IP to build their mobile business.

At this point I wonder if it makes sense to spinoff the GPU division into a seperate company. Focus on gaming, professional, HPC, and mobile designs using ARM as the CPU. Let the x86 business wind down and call it a day. AMD has value but it isnt in x86.

 

[mrmt]

At this point I wonder if it makes sense to spinoff the GPU division into a seperate company. Focus on gaming, professional, HPC, and mobile designs using ARM as the CPU. Let the x86 business wind down and call it a day. AMD has value but it isnt in x86.

In order to spin off the GPU division AMD would have to either raise equity on the stock market (unlikely), split its cash reserves among the old AMD and the new GPU company (impossible) or find someone to outright buy the new company (hard to do). That, and they would have to somehow retain access to the new GPU company IP but it would also have to pay for this IP, which would further erode AMD's prospects of survival. The spin off is very unlikely for the given reasons.

There's value in AMD's CPU business but only as a service provider for the semi-custom business, as a consumer business the value is negative (the division is bleeding money, money that could be used to prop up other profitable businesses). Will AMD double down its bet that K12 and Zen will be viable competitors in the consumer/server market, and spend R&D money on them or will AMD kill/trim scope of one or the two projects and refocus the company faster in the semi-custom business? That's the question Lisa still has to answer.

I think a scope trimming/project killing was the way chosen but the changes weren't made public yet. The evidences for that are:

- Lisa's refusal to provide guidance in terms of the product roadmap (she said that these questions will be answered in the Financial Analyst Day.

- R&D plunged 15% in Q414 from Q314 and should fall some 5% more in Q115. Unless Lisa found a way to make AMD R&D teams work 20% better, something has to be trimmed/killed in the R&D pipeline. Delaying a project is out of question, given AMD's deteriorated market position.