AMD Loses $1.2 Billion and Its CEO

Barence writes to mention that after seeing almost $1.2 billion in second quarter losses, AMD's CEO has resigned. Stepping up to fill his shoes will be Dirk Meyer, previous company president and COO. "Only two years ago, the company held a processor performance lead and was making serious inroads into Intel's market. However, AMD failed to keep pace with Intel's Core technology, and it once again surrendered its performance crown at the dawn of the multicore era. Those problems were exacerbated by the bungled launch of the Barcelona processors, which prompted Ruiz to make a frank public apology last December."

Comments

i hope they keep up

[Anonymous Coward]

The last thing i want is an intel/ms only world. Bad enough MIPS and PPC have gone the way of the dodo more or less. AMD is the last bastion of creativity in CPUs.

Re:i hope they keep up

[Mordok-DestroyerOfWo]

Thank heavens for the second amendment!

Re:i hope they keep up

[dedazo]

Not to worry. History (or the Slashdot version of it at least) will remember AMD being taken down by the evil Intel, and things like AMD having taken to lead in the desktop CPU market or the fact that buying ATI was a phenomenal mistake will be ignored.

Companies don't die, they're just taken down viciously by companies we don't like.

Re:i hope they keep up

[Anonymous Coward]

But intel makes processors for Macs now. According to /. rhetoric, they thus cannot be evil.

Re:i hope they keep up

[alan.briolat]

Speaking purely as a cynic, Intel were dragged into having to innovate by somebody (AMD) producing something better and also instruction-set compatible. That meant they had to invest some money in R&D rather than continuing to push their fairly abysmal P4 line because there was no choice. The emergence of AMD as a serious contender is what has done the industry good in this instance.

I'm sure that without actual competition, we'd be in the usual position (again) of a company not bothering to innovate because their profit margins are fatter without doing so.

Re:i hope they keep up

[Cocoshimmy]

um...there is a 64bit version of windows, XP64, which Microsoft developed specifically for AMD's 64bit processors since at that time Intel was still pushing Itanium. This was available for public consumption not too long after AMD's processors were released and at that time only ran on AMD processors since they were the only producer of 64bit x86 processors. There is also a 64bit version of Vista available which runs on both Intel and AMD CPUs.

Fix it!

[raijinsetsu]

I fell in love with AMD many years ago. They had the price and performance edge, and were also more stable than Intel. I think they need to take a step back an evaluate what the hell they're doing. They need to find a way to pull out of the competition while they clean up their act so they can start giving their customers what they want: cutting edge technology. I've read many articles about proposed AMD technologies, but I haven't seen many come to light (glueless HT, is one that comes to mind). Clean up your act!

Buying ATI = idiocy

[Spy Handler]

if instead of buying ATI, the dude spent the money on R&D and actually coming out with products that can compete with Intel CoreDuo, he might not be resigning...

Re:Buying ATI = idiocy

[moosesocks]

The problem was that Intel wasn't spending money on products that could compete with CoreDuo. They got really, really, really lucky.

The Core line of chips were originally developed as low-power laptop chips based around an older technology than Intel's "mainstream" chips of the day. Intel's roadmap up until very recently focused on further development of the Pentium 4 and Itanium lines (both of which ultimately proved to be unsustainable)

One of Intel's development teams in Israel saw the huge potential that the old Pentium III architecture had to be fast and power-efficient, when coupled with a more modern manufacturing process. In the end, the low-end power-efficient chips began to outperform their power-hungry Pentium 4 desktop offerings, and Intel quietly rebranded the line, and began to offer the Core chips as their flagship desktop offering.

Intel also made a great many mistakes with the development of Itanium, and their reliance on RAMBUS (which was proprietary, expensive, and actually slower in many cases than plain old DDR SDRAM). Their failure to embrace x86-64 could have also easily spelled disaster for the company. In terms of 64-bit development, AMD has always been the clear leader.

Intel should be counting its blessings, as they've made far more missteps than AMD have. Fortunately for them, they have a massive marketing team and extensive manufacturing facilities, both of which AMD lack.

Hopefully AMD can make something out of their R&D relating to GPGPUs, and stay viable as a competitor.

Re:Buying ATI = idiocy

[MightyMartian]

Intel should be counting its blessings, as they've made far more missteps than AMD have. Fortunately for them, they have a massive marketing team and extensive manufacturing facilities, both of which AMD lack.

But more importantly, lots and lots and lots of money. Intel had the financial wiggle-room to come back from some rather colossal errors over the last decade. AMD simply did not. It could stay competitive providing it had a focused plan, but the ATI deal was precisely what AMD could not afford.

Re:Buying ATI = idiocy

[Otter]

One of Intel's development teams in Israel saw the huge potential that the old Pentium III architecture had to be fast and power-efficient, when coupled with a more modern manufacturing process. In the end, the low-end power-efficient chips began to outperform their power-hungry Pentium 4 desktop offerings, and Intel quietly rebranded the line, and began to offer the Core chips as their flagship desktop offering.

I'd hesitate to call that luck, let alone "really, really, really lucky". It sounds like terrific teamwork by engineering, production and management.

Re:Buying ATI = idiocy

[moosesocks]

I'd hesitate to call that luck, let alone "really, really, really lucky". It sounds like terrific teamwork by engineering, production and management.

I'd agree 100%. Intel's R&D group in Israel pulled off a small miracle with their work, and should be highly commended for it. However, from what is publicly known, it seems as if it were almost a sort of "skunk works" project, largely independent of the main R&D efforts of the company. I don't think that there was terribly much being expected from them, and the fact that they were able to deliver an extremely viable product was a fortunate coincidence.

Intel's main R&D efforts were terribly misguided. It was common knowledge that RAMBUS Itanium, and the P4 line all had serious limitations, and yet Intel continued pushing forward with these products.

Re:What about the video cards?

[pdusen]

AMD is fine. They are having a rough spot that is worse than the ones Intel goes through due to Intel being far more diversified. People in these comments touting the death of AMD are being melodramatic.

If I lost $1.2 billion...

[afabbro]

...I'd try to think where I'd last seen it and look there.

In this case, AMD should be looking at 2005.

Timing is everything

[buddhaunderthetree]

Hmmm, perhaps just a coincidence but the EU has just expanded it's anti-trust investigation into Intel.

http://arstechnica.com/news.ars/post/20080716-report-eu-to-expand-intel-antitrust-investigation.html

Re:Don't invest in AMD...

[smooth wombat]

I have no idea why every shareholder of every company out there isn't forcing the companies to put in performance clawbacks.

Because it is the Boards of these companies that set pay policies, not shareholders. Further, it is all but impossible to get a measure on the proxy vote to force the Boards to change pay policy. The best one can hope for is to make a 'recommendation' to the Board to change pay policy.

Unless is it is specifically stated somewhere in the corporate bylaws, the final decision as to executive compensation rests with the Board, not the shareholders.

Re:The beginning of the end for AMD

[Spatial]

I guess when a mediocre CPU manufacturer merges with a mediocre GPU manufacturer this is what you get.

At the moment AMD's GPUs are the best value you can get. The Radeon HD4850 and 4870 are exceptional cards while Nvidia seems to have botched their latest line - although they're faster, they're hideously expensive for only moderate performance gains above AMD's parts, and have very large power needs. And just for the record, every GPU I've bought has been an Nvidia one. I'm no AMD/ATI fanboy.

Re:Stocks fall

[TubeSteak]

Remember, there is no way to properly value this company, the proper valuation is NEGATIVE because that's what profits are.

That's one of the dumber things I've heard today and it only holds true if you assume AMD is going to keep losing money until they have to sell off their desk chairs & keyboards in a bankruptcy auction.

There is a lot more to valuing a company than "omg they lost GigaBucks this quarter!!1"

The two basic numbers to work with are:
A) whatever investors think it's worth
B) what the company's assets and fundamentals represent

A lot of times A is less than B.
The attempted Microsoft buyout of Yahoo is a good recent example.
Yahoo shares were/are trading in the low $20s even though MS offered in the low $30s

Re:The beginning of the end for AMD

[Anonymous Coward]

Just for the record AMD/ATI technically have the fastest single board Video card on the market smashing nvidia on pure raw power 2.4TFLOPS admittedly their is some creative thinking behind it but it is the king

http://www.hexus.net/content/item.php?item=14178&page=1

 

EU Antitrust Charges. Don't blame the Victim.

[Erris]

Thank heavens for representative government that works better than our own. The EU has been watching Intel for more than 8 years and already has outstanding charges that Intel thwarted AMD sales by selling at a loss. We've all seen how they crushed OLPC. Good for the EU for doing something, we can only hope it's not too little too late given worsening economic conditions.

The story's "AMD sucks" slant is puzzling. Advantages come and go, but AMD has almost always been better for number crunching since 2000. They also have had significantly better interconnects and architecture for multi core processors. It's like blaming the victim.

Another factor in this sad story is the Vista failure which has hurt all hardware sales. In the last year or so, we've seen spectacular bargains like $500 and less dual core laptops on clearance and the collapse of CompUSA and other big box stores. AMD will suffer more in this downturn because it comes as they were gaining share.