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03/13/2007 06:55 PM ID: 60964 Permalink   

AMD on The Brink of Collapse

 

A battle-weary AMD is the subject of a rumor that it may be in the position for a takeover or a cash infusion from private equity, brought on by a punishing stock market, losing 60% in the last year, losing $10 billion in customer wealth.

Even though both chipmakers have seen profit margins hit from investing in new technologies, AMD has been hit especially hard since its revenue is only a seventh of Intel's, whose stock only fell 4% in the last year.

The current trend is expected to continue until new chips are rolled out later this year. With an annual revenue a seventh that of Intel, They stole 4% of the chip market from them last year, and hang on to about a quarter of the market.

 
  Source: news.yahoo.com  
    WebReporter: caution2 Show Calling Card      
  Recommendation:  
ASSESS this news: BLOCK this news. Reason:
   
  28 Comments
  
  All wrong  
 
Its not your fault, its just theres so many finance analysts out there that dont have a clue.

Private Equity firms dont buy companies in AMD's posistion.
They buy companys that already have cash, or cash flow, and need a strategic overhaul.
They dont buy companies that need an extra $10billion invested in them, because PE just doesnt have that sort of cash.

AMD's only real hope is an extremely unlikely takeover, which I'll get onto soon, or a shares issue.

The problem with a takeover, is you'd have to buy AMD which is still valued at around $10billion, then invest at least the same again into the company, to fight out of the corner, and even them, you'd be pepsi not coke.
However you'd be the pepsi of a market thats shrinking, and the price war to get you there would hammer profits in the sector.
People hate intel, do they hate them enough to waste 20billion $ to break intels nose?

The problem with a shares issue, is either, the current owners buy more shares, or new owners buy new shares.

If you bought a share for $20 6 months ago, thats now worth $10, are you going to want to buy another few thousand shares?

Same scenario, but someone else gets the same say in the company you have, but for half the cost?


If AMD can break out it 20% share, take and hold 35%, then it will survive as a company.
The probolem is, Intels Road maps for the next year or so were just released, and they look like they're willing to run themselves into the ground to put AMD into the corner permanantly.

Intels current Roadmaps have quad core CPUS for under $200 by the end of this year. 45nm by the first Q of next year.
 
  by: GogeVandire   03/13/2007 08:07 PM     
  damn  
 
I'd better make sure to buy a new computer (with an AMD cpu) before they go out of business.

Whoop-de-effin-do @ Intel's quad-core processors. 90% of programs are still putting 90-100% of the load on one core, while the other 10% are inefficiently using 2 cores. Why pay for the 3rd and 4th?

Because it sounds good to people that don't know jack about computers. AMD has really stepped up in the past couple years and offered superior price:performance processors. Unfortunetly for them, all the generic joe-shmoe "n00b" computers always come with intel processors.
 
  by: maverick7h     03/13/2007 08:59 PM     
  ...  
 
Last time I checked, Intel offered better performance then AMD.

And it has been since the introduction of Core.
 
  by: vant   03/13/2007 09:03 PM     
  I said  
 
price:performance.

i.e. for literally half as much money, you can buy a processor with 90% of the performance.

and let me point out that AMD's high-end CPUs still out-perform Intel's on single-threaded applications (which most are) and any environment where only 1 application demands most of a computer's resources (again, which is most of the time). The core outperforms in tests DESIGNED for it to outperform, and in high-end professional software that few of us use.

Regardless, the most important thing is that AMD's existence forces faster R&D and cheaper prices for both companies. To lose AMD would be bad for everyone.
 
  by: maverick7h     03/13/2007 09:39 PM     
  FUD  
 
This is just Fear, Uncertainty and Doubt designed to further undermine AMD's stock position.

At the moment, AMD remains in a financially secure and viable position despite losses in income over the past financial year. They are FAR from collapse (read the SEC's if you doubt).

The reality is that AMD is currently engaged in a immense unfair competition suit against Intel which they show every sign of winning. If an infusion comes, it's most likely going to come as a billion dollar payout from Intel for their actions.

AMD has stacks of evidence, and Intel faces treble damages if their violations are found to be willful (such as top executives destroying evidence that could harm AMDs position in the trial).

The very article serves to make AMDs position look even shakier, which makes me wonder if someone was paid or prompted to write it.

Intel is in big trouble, and undermining AMD is one tactic they would definitely stoop to.
 
  by: lauriesman     03/13/2007 11:33 PM     
  @Lauriesman  
 
AMD, even if they win, wont see a penny of damages for at least 5 years, probably closer to 10.

AMD's posistion is far from secure, they have to invest billions of dollars they dont have in building and converting fabs.
AMD is in debt way past its eyeballs, it needs money it doesnt have to carry out long term investments.

AMD has been riding a PR bubble for the last year, now people are starting to ask questions, and question AMD's answers.

The simple fact is AMD dont have an answer to conroe, and by the time they do, Intel with have released penryhn.
 
  by: GogeVandire   03/14/2007 12:34 AM     
  NO!!!!  
 
I hate AMD. But on the other hand it keeps Intel in check to make faster chips and to keep prices down! If there is no AMD, then we will see slow upgrade speeds with riduculous prices. Sorta like Microsoft, they have little compition so they gouge the consumers.
 
  by: slayer06   03/14/2007 01:48 AM     
  Tom's Hardware  
 
This is a bit dated, but it is the latest I could find. Tom's Hardware guide released an interactive processor comparison. You choose the processors that you want to compare and the benchmark you wish to use. Then the guide shows you all of the popular processors commercially available at the time and their respective rating. The 2 processors that you have chosen will be represented in red. The others are in blue(Intel) or green(AMD). The price/performance comparison is the one I like best. Here is a link.
http://www23.tomshardware.com/...
AMD holds the top 5 spots and 7 of the top 10.
 
  by: tomblik     03/14/2007 02:03 AM     
  @Goge  
 
Agreed - I live in Intel country here in Oregon and let me tell you, it's crazy what they've built here. They are (according to the story) seven times larger than AMD in terms of annual revenue, and although AMD deserves credit for holding on to as much of the market as they do with such a relatively small company, it's going to be very difficult for them to compete with Intel in the long run. Intel is always going to have more money to throw at R&D. I'm actually amazed they've made it this far!
 
  by: caution2     03/14/2007 02:32 AM     
  Never liked it anyways...  
 
AMD bit off more than it can chew, ATI was better off without those asshats

Intel Inside!
 
  by: Zmethod     03/14/2007 02:53 AM     
  @caution, @goge  
 
Considering the allegations raised against Intel by AMD (and a lot of it based on emails and other discovery they've already obtained) I think it's amazing AMD has gained any market share at all.

Goge, they don't need the actual payout right away - just the knowledge that it is coming will spur venture capital investment firms to reinvest in AMD.
 
  by: lauriesman     03/14/2007 03:14 AM     
  In case you didn't know....  
 
Intel chips that are capable of running win XP & Vista are hardwired with version checking that report back to Microsoft what version of windows you are running and whether or not your version is pirated.(That's how they are able to asess you are suitable to install SP2.(If your windows is NOT genuine then it is very difficult for you to install SP2.
Microsoft may even use this technology in the future to track down and prosecute users of pirated copies of Windows.
(Bill Gates really DOES SUCK!)
 
  by: cavador   03/14/2007 05:48 AM     
  @tomblik  
 
Yes, AMD has the best price vs. performance. But have you looked at their prices lately? AMD had to tank their prices by hundreds, some chips they had to drop $600 just to compete with price vs. performace. Too bad AMD didn't do that for customers before Core 2 came out. LOL
 
  by: slayer06   03/14/2007 06:49 AM     
  @cavador  
 
I call BS on the Intel chipsets are hardwired to call Microsoft. In fact, it the bull faced lie.
 
  by: slayer06   03/14/2007 06:57 AM     
  cheap cpus  
 
even after these huge proce drops, i still keep my 3800+ x2 2.0ghz. why because i overclocked it to 2.61ghz stable and that is as fast as the $300 chips. it gave 8 extra FPS in Dark Messiah
 
  by: maccheese   03/14/2007 07:45 AM     
  Hey I'm not  
 
hoping for AMD to die, I hope they do manage to break out of the box and become pepsi.
I just wouldnt put money on it.
I'm still using a 2.4 northwood clocked to 3ghz.
I'll upgrade end of this year early next probably, hopefully by then AMD will have something that can compete.

However right now, a cheap conroe gets a 50% OC with ease, and beats AMD's $500 chips.
 
  by: Gogevandire   03/14/2007 09:40 AM     
  this would be bad....  
 
for all you intel fan boys out there, ill admit i have in my current pc is a core 2 duo cpu, but competition is what gave us the core 2 processors without amd we would not be anywhere near where we are today....so i really hope they dont go under and come up with something to battle intels performance
 
  by: jager9x9   03/14/2007 09:17 PM     
  It's not the processors that tattle  
 
It's the software, Vista in particular. It's also the chipset that enforces DRM enabling restrictions. We haven't seen the full capacity of those come into play yet, but they are in the motherboards, and will be in homes when the TCI is switched on.

 
  by: lauriesman     03/14/2007 11:36 PM     
  the tattle home system  
 
is in both Intel and AMD chips.
 
  by: GogeVandire   03/15/2007 12:45 AM     
  slayer06  
 
You think I talk BS-Ok then try and install SP2 onto a pirated copy of win XP and you will see what I mean.The install exe checks the Intel chips buffers to see what version of Win it's running-If you think I'm still talking BS then ask MS yourself,then probably try to deny it.
 
  by: cavador   03/15/2007 05:37 AM     
  AMD vs Intel  
 
I'm not trying to start a flame war, but I have tested the two on a daily basis with the latest products and here are my findings:

AMD and their supporting chipsets are unstable. AMD based systems crash much more than Intel based systems. Applications do not seem to effectively use AMD multi-core like they do Intels multi-core. Applications have to be WRITTEN for multi-core to use it anyway.

With respect to multi-core, you can assign task affinity, telling the app to run on a certain core or CPU in an SMP system, but the app has to be written to utilize both cores automatically.

Have you ever looked at AMD multi-core register layout as compared to Intel? Intels structure and registry layout is well defined. AMD register layout loks like a 50,000 piece jigsaw puzzle after my 2 year old got ahold of it.

The main problem, in my opinion, though, is the supporting chipset and driver stability of AMD based systems. They are a support techincians nightmare.
This is my professional opiniuon based on my own personal experiences in the field of both home and large business applications.
 
  by: BikerDude   03/15/2007 06:14 AM     
  @BK  
 
Actually depends a bit on operating system - I've been running an AMD AM2 for 4 or 5 months now, and haven't had a single crash due to chipset or drivers or processor.

I run windows xp pro sp2, kubuntu, and fedora.
 
  by: lauriesman     03/15/2007 06:36 AM     
  @ BikerDude  
 
AMD and their supporting chipsets are unstable. FUD
AMD based systems crash much more than Intel based systems. FUD
Applications do not seem to effectively use AMD multi-core like they do Intels multi-core. FUD, can unambiguously be proven wrong

Applications have to be WRITTEN for multi-core to use it anyway. TRUE, but works for both CPUs the same


Have you ever looked at AMD multi-core register layout as compared to Intel? Intels structure and registry layout is well defined. AMD register layout loks like a 50,000 piece jigsaw puzzle after my 2 year old got ahold of it.
FUD
Actually, AMD multi core architecture is better, as shown by Intel adopting a verbatim HT 3.0 in its FUTURE processors.

This is my professional opiniuon based on my own personal experiences in the field of both home and large business applications.
FUD
As shown by AMD gaining serious traction in server market till the beginning of the year.
I hope you don't have ANYTHING to do with my companies tech support.


As for the brink of collapse, how about Intel recently comparing its future discrete GPU to some ATI GPU, such that most of the journalists present found results suspicious?
 
  by: felixG   03/15/2007 06:45 AM     
  Some interesting numbers  
 
AMD is worth about $10billion, total.

Intel has that in cash.
 
  by: Gogevandire   03/15/2007 12:19 PM     
  AMD is similar to the 300 Spartans  
 
Except, they'll win. There is no defection here!

Go AMD!
 
  by: Hollywood   03/15/2007 05:14 PM     
  @Cavador  
 
If President Bush told me to kick your ass because your an dumb asshat. Is it my fault Or bush's fault. microsoft very simply has a control over their keys and have a blacklist of keys (pirated keys). Its like me kicking your ass because i see you driving my bicycle. I hope that explains it.
 
  by: mindert   03/15/2007 05:33 PM     
  @cavador  
 
"Install SP2....The install exe checks the Intel chips buffers".

Ahhhh....So it still requires software for it to become enabled. Hardly hard wired. Sorta like, if some one can't pee...but when taken an antibiotic...you now can. LOL.

 
  by: slayer06   03/16/2007 03:53 AM     
  Not collapse, but theres something going wrong.  
   
  by: Gogevandire   03/22/2007 03:13 PM     
 
 
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