AMD's Plan To Recover From Its Perfect Storm

An anonymous reader writes "TG Daily has an interesting write-up on AMD's big Q1 loss and how the company plans to get back into the black. AMD admitted that Q1 was a meltdown and not just a miss. Looks like cost cutting, including layoffs, may be on the way. But the company says it won't change its overal direction. The CEO Hector Ruiz is quoted as saying, 'We are not going to change our strategy because of one lousy quarter.'"

Not quite exactly a monopoly

[DrYak]

Intel with an 80%+ market share

In the very specific and narrow subset of "processors only used in computers (laptops, desktops and servers)".
BUT overall, the ARM is probably the most widespread architecture by far, once you exist the computers market and look for all produced processors.
In fact, if you count it as a processor, maybe the PICs are being even much more widespread than the rest.

On those markets, although Intel is also a producer of embedable RISC CPUs, it isn't the only producer.

Never underestimate the modern world of electronics where even a fridge is microprocessor-controlled.

In fact several components inside a PC or connected to it have their own RISC CPU :
- on-board target controller on harddrives, may use generic RISCs.
- most advanced host controller with real hardware acceleration (true hardware RAID) use small embed CPUs.
- Highend hardware monitor
- Advanced network card with either accelerator or even-when-turned-off-diagnosis
- Protection handling of optical drivers.
- WiFi card.
- Pretty much everything else inside your computer that has a firmware.

- the printer and its Postscript or PCL interpreter (except if it's WinPrinter)
- external enclosure with advanced functions
- the DSL router

Re:I KNEW IT

[Anonymous Coward]

Processors inherently need to be as perfect as can be. You can't have the processor performing computational errors. That's the biggest no-no there is in CPU design. Those are the kind of errors that will drive your customers away permantently. If they can't trust your CPUs to give them accurate results, then you're fucked up the bum.

They don't have much leeway when it comes to speed and power consumption, as this is directly where they're competing with Intel. They have to be at least as good as Intel to even have a chance at surviving. Even when they're better, it's a major struggle for them.

Re:I KNEW IT

[billcopc]

Same here. I'm grossly disappointed with AMD right now. They haven't done anything significant in the last 18 months, and I'm starting to read the pamphlet about the dark side. I still hate Intel chipsets with a passion, they just can't seem to cater to the power user with their lackluster features and underwhelming bus architecture, and I refuse to blow $300 on the ultra-high end consumer boards (with 2 of everything - including Intel royalties)... at that point I'd be better off getting all Xeon kit. Where is AMD's response to the Core 2 ? I have the option of buying a quad-core Intel right now, or waiting 6 months to see if Barcelona is worth a look. 6 months is a very long time in computer land, lots of stuff will have changed by then, and Intel will be waiting with the Penryn, ready to make AMD's latest offspring obsolete the day they're born.

At this point, I don't think a comeback is likely.

Re:The loss of 1 Linux sale is busting up AMD

[joe_cot]

Read the comments here [digg.com]. There's more of us than you seem to think.

Re:...because of one lousy quarter

[Rukie]

Hmm, I'm curious as to whether they knew that they would take a hit for Q1 but think that there will be brighter days ahead. Although, it doesn't look like they are going to be doing anything except reduce expenditures. But uhm, 600million in expenditures can't be stopped. However, their merger with ATI may help with some new technologies. Intel seems to really be putting the pressure on AMD as of late with a lot of new architectures, but if AMD can get one extremely efficient/cheap/powerful processor that can dominate the x86 market, they will recoup a lot of their market share, and possibly take some more.

I like AMD and their products, and I think that they have some new products that haven't been seen yet, but will be seen in Q2.But another beating like this, and they'll need some serious help.

Re:Antitrust Enforcement?

[Valar]

There's no limit on the percentage of market share you can have and still be legal. Did you know that there are some companies with 100% market share that aren't illegal monopolies (monopolies, but not illegal ones)? In fact, in some markets, monopolies form naturally (because either the market can't bear more than one firm or because there are high fixed costs associated with entering the market). So, the legal test isn't market share or number of competing companies, but rather whether the company has demonstrated an abuse of their monopoly posistion. Intel has done this in the past, and has been taken to court over it (by AMD) and lost. As a result, they had to hand over a lot of documentation to AMD and anyone else who asks for it (which is why I have seven volumes of manuals on the x86 and x86-64 ISA from Intel and a matching set from AMD).

Re:Will AMD improve ATI, or will ATI ruin AMD?

[maxume]

Microsoft doesn't care about linux drivers. They might keep an eye on the situation, but compare 20 million copies of Vista sold in a couple of months to the installed base of linux on the desktop, and it is clear that they aren't hugely concerned about linux on the desktop right now(and I mean to be agnostic in that statement, it is just that there is very visible evidence that Microsoft is still doing very, very well on the desktop). They certainly aren't playing games with XBox contracts, they are just going with what they think will work best.

Intel won't buy Nvidia, either because they don't get anything out of it(they cross license heavily anyway right?), or because antitrust won't let them. My impression is that intel does graphics to make sure that they can make sales at low end price points rather than for the fantastic revenues, as they have figured out that their business works better when the volume is as high as possible. I think they also benefit from being able to provide 'spec' systems that don't need a whole lot of integration on the part of a vendor.

If AMD does go towards closed, they are just going to evaporate.

Re:AMD 25 Year Chart

[milamber3]

Those little black arrows on that graph indicate splits. I would not expect someone making such an uninformed comment to know that, so I figure I'd try to clue you in. Also, unless you missed the past 5 or so year, the Athlon hasn't done too shabby. Remember, just because the cyclic nature of the chip sector has swung back to intels favor doesn't mean AMD is or has been worthless.

Re:I stopped buying amd because of ati

[spyowl]

With this new merger, however, it's become nigh-impossible to find a decent, small laptop which has an amd processor and an nvidia graphics chipset.

Try here [hp.com].

Re:Reinforcing your strengths

[Frumious Wombat]

Be careful here. When you talk "64-bit Linux-compatible CPU", you run smack into three problems; IA-64, Power, and SPARC. Admittedly, SPARC really implies Solaris, but the basic point is sound; if AMD were to focus on that market, then it runs flat into three superior and well-established architectures, where it has a toehold with entry-level systems, but only one vendor (Sun) shipping anything of any size (the 4600) involving Opterons. That's probably too small of a market to support the technical innovation necesssary to remain viable, and a good path to oblivion.

Fighting IBM's Power group, and IBM's fabs, doesn't really seem like the best route to success, especially given IBM's committment to Linux on Power. People liked teh Opterons because while they were good chips on their own, they also functioned as a fast Xeon. If you're in a market with Xeonicity doesn't matter, then they're only one option amongst many, and not necessarily the best.

Re:One problem

[suv4x4]

Is that recently AMD's best chipsets for desktop systems have come from nVidia. AMD themselves seems to be unwilling or unable to make desktop chipsets, and thus relies on third parties.

In my eye this has always been the greatest problem of AMD. I've tried having AMD systems few times. The problem is the chipsets were all lemons, and caused BSODs on a bare Windows install or various other issues.

With more knowledge on the good vendors (nVidia being one, but NForce wasn't there at that time), it's a lot more hassle for me to play mix-and-match in the hope of creating a stable system, versus just going Intel chipset and Intel CPU and knowing I have a efficient, stable system.

Even in the time of Pentium 4, which is by far Intel's worst CPU, I preferred Intel because of their chipsets.

It's outrageous that when AMD started thinking of platforms, they started with buying ATI and thinking of GPU-s, versus taking care of their missing chipset problem. And now that Intel has the better CPU-s as well, tough times for AMD.

Re:I stopped buying amd because of ati

[petermgreen]

you are a bit out of date, afaict while older ati cards did indeed have 3D support through open drivers written from specs the practice of releasing specs suitable for that stopped some time ago.

so it then becomes a case of who's binary blobs are better done and the impression i get is that nvidia are doing them better than ATI.