AMD Post $74 Million Second Quarter Loss, CEO Expects Return to Profitability in Q3

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methuselah

What happened to the once mighty AMD?? It would be great if you guys did an article in an upcoming MaxPC issue with the history behind their rise and fall. It would be great to know how Intel was able to come out of nowhere and utterly destroy the great King AMD with the Core 2 Duo. I mean, Intel didn't just make an incremental step against AMD, they blew 'em out of the water! ...and have been doing that since. It's a shame, I'd love to see AMD be more competitive against Intel.

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burntham77

My gaming system is all AMD. Radeon 6850, A10-5700 APU (so I can use a Mini ITX board). I play all of my games at 2560x1440 at high graphics settings. Despite being a budget build, the system kicks ass. I have a ton of respect for what Intel does. They have amazing technology. I just don't feel the need to spend the extra money for benchmark bragging rights. Every game I play runs beautifully on my current system. AMD makes really good hardware at low prices. I hope they do better in the future.

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vrmlbasic

What games do you play at 1440 with only a 6850? What graphical settings do you disable/reduce? I have a 6870 in XFire with a 6850 (both overclocked) and it struggles to play some games in 1080 with many settings maxed.

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warptek2010

You shouldn't be experiencing any problems at all with what you have. Are u sure it's setup correctly? I have a single Radeon HD 6950 and I use it with graphical settings on max (except I use antialiasing set to 4X I think)and games play smooth as butter.

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jgottberg

ok, at the risk of sounding like a complete noob... I'm gonna ask... (keep in mind, I haven't been in the hardcore PC enthusiast arena in some time) I have an AMD Radeon 5870 (6 mini display port connectors) strapped to an Intel mobo with an i7 2600 X way proc clocked at 3.4ghz and 12GB of RAM (not sure of the speed). Would that be considered a decent gaming machine by today's standards or is there room for upgrades? I am currently running games at almost full-on and frame rates seem decent.

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Renegade Knight

Pretty much any desktop i7 will do well enough for gaming. Your GPU becomes the problem. I have the AMD 6870 and it keeps up. There is a website (that I've never found again) that would rate your system and tell you what games you can't run well. My own i7 3.07ghz and 6870 on a 1080p monitor was fine for playing everthing save one game.

The only thing you might want to upgrade is the GPU on your system and if it's running everthing you want. You might as well save the money.

Ironicy the OP's AMD CPU is the weak link in his own systme. AMD CPU's cause slowdowns in GPU's. This was tested but I can't find the link. However it showed intel as the clear CPU winner. This sites CPU reccomendations nailed the minimum level needed for the CPU to keep up with the GPU.

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limitbreaker

I don't know where you're getting your facts but you're looking at cpu bottlenecks in the wrong way. Until a cpu is truly bottlenecked, the slow downs caused by a less capable processor is very marginal and doesn't make up for the price difference. For example, you're better of with a gtx770 and a slower cpu than a gtx760 with a faster cpu.

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jgottberg

Cool, thanks for all the info/advice. I've been an enthusiast for a long time but family, friends and a career have derailed my commitment to it, lol. I'm into network hardware and server technologies these days which has a totally different mindset.

I'll start formulating my next build :)

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Xenux

I believe the website you are looking for is systemrequirementslab.com/cyri/

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jgottberg

lol, thanks for the link - it's pretty cool but now I really do feel like a noob! LOL!!

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Vano

This sounds like one of these bullshit "looses" when they invested $1M expecting earn $148M, but only got $73M in return.
Not real loose as if spent $75M and earn $1M - now that a loss!

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d3v

How much longer is AMD going to survive if it keeps making losses like this? Maybe Intel can bail them out!

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warptek2010

Always been a fan of AMD as everyone here already knows... what I believe they need to do would probably be somewhat controversial... bite the bullet and pay a license fee for some of Intel's technology for the next generation of APU/CPU. For instance, wattage needs to come way down thereby benefiting the thermals aspect. If anyone can design an I7 killer it's AMD - IF (big IF) they really wanted to. That last release of a 5GHZ 220watt Piledriver part is a bit ridiculous especially considering the price attached to it.

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devin3627

your mom lost 10 cents a share mike.

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burntham77

Ha!

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AFDozerman

When has AMD not lost money? I still like them, just wish they would push single threaded performance up. Other than that I really don't get why they don't sell more chips.

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AFDozerman

When has AMD not lost money? I still like them, just wish they would push single threaded performance up. Other than that I really don't get why they don't sell more chips.

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AFDozerman

When has AMD not lost money? I still like them, just wish they would push single threaded performance up. Other than that I really don't get why they don't sell more chips.

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Gezzer

I agree that the console "wins" for AMD might not be the most lucrative contract they have. But there's a good chance that the halo effect might make up for that.
The way I see it as long as AMD is able to execute their long term plans in a timely manner (no late chips AMD) there might be light at the end of the tunnel for the industries favourite underdog.
While AMD has yet to challenge Intel for the high end crown, they might not have to. If they can get enough momentum behind the HSA initiative, then add all the contacts and programmer familiarity that having their chips in the consoles will give them and they might be able to do an end run around Intel and their lower performing graphics cores.
The big question is how long can they hang on till things really turn around?
Getting programmers to see, and even more importantly use, the power that HSA would give them might be a battle that AMD can't afford to lose. AMD needs to develop the tools programmers will need, and then help facilitate the "killer app" that will take advantage of HSA.
Has AMD got what it takes to create this fundamental shift in the market? Only time will tell I'm afraid.

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Renegade Knight

The Console wins give AMD a chance to perfect their CPU's. AMD CPUs have issues when it comes to doing the heavy lifting to make graphics run smoothly. Intel is the clear winner over all things AMD in this regard. Given Intell makes meh graphics (though HD 5000 is almost there) and AMD has ATI you would think AMD would have an inside edge on creating an integrated system where the CPU and GPU work well together.

On the bottom end of computing this doesn't matter as much. But AMD should be doing it's own version of the Next Unit of Computing. If OEM's aren't using AMD chips the way AMD would like to see...maybe AMD should bet in the computer biz.

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Sir Hobbes3

I hope AMD doesn't go under, which hopefully they won't when the PS4 and XB1 come out. AMD doesn't always win in the high end, but does pretty good. And they have a good stronghold on the mid to low end area with the A series APUs. Plus the lower end Radeon cards are way better than nvidia's offerings. Lol should've never bought my GT 520, its worthless (sorry nVidida, it's true) AMD is a good company i hope they start turning a profit.

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John Pombrio

I really have to question if AMD is going to make a lot of money on the new console chips. I am sure that both Intel and NVidia were approached about supplying the consoles and they must have turned both MS and SONY down.
Intel is the most efficient manufacturer of chips AND they own the Fabs that make them.
AMD will not make any money on the manufacturing of the chips, just on the license to use them. AMD also must have low-balled the price a LOT to sell less efficient and more power hungry CPUs. They would have won on the GPU front without too much of a loss on those chips.
Just do not expect AMD to end up with hundreds of millions in PROFITS from the new consoles as they have probably already shipped a million or so for the day one consoles and they still lost money this quarter.

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tom_m

It's my understanding that Nvidia's Tegra doesn't have enough horsepower to drive a console, and Intel doesn't have the platform that integrates system RAM and video RAM. PowerPC is apparently not interesting tech now (and presumably is in the same boat as Intel anyway). That leaves AMD, which has been doing budget-friendly chips for a while and now has that HSA thing.

But while that appears to leave AMD with respectable negotiating leverage, that doesn't necessarily lead to favorable negotiation results. It's no secret that they could use a large influx of cash, so I wouldn't be surprised if they settled for a one-time lump sum and possibly the tranfer of a few key patents to MS and Sony.

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jgottberg

Don't kid yourself, John. Supplying both MS and Sony with their next-gen console chips is a resume builder for AMD. I'm not so sure they care if they make a profit. Having their chips inside both of the most popular console platforms is huge visibility for them. I think they are thinking bigger. The consoles will prop them up while they design something better for the CPU side of things.

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fygquas

I don't understand how this would generate visibility for them? Because they make chips decent enough for new consoles, the PC enthusiast-who knows perfectly that a PC is and ought to be much more powerful than a console- will take notice?

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jgottberg

Not visibility for consumers. Of course enthusiasts know of them. I'm saying in the business-sense. They provided the graphics chips for the Wii as well. It's not AMDs fault that Nintendo didn't spec out the hardware better than they did. But by providing the chips in the quantities demanded when the Wii was flying off the shelves, it shows they are capable of providing a lot of hardware in short notice. I'm sure that was very attractive to both Sony and Microsoft. If AMD can maintain that, they have a lot of product leaving the door and generating a lot of revenue. If they don't screw the pooch on these two consoles, they'll have a minimum of 8 years providing the chips for these things. Which like I said, makes them attractive to other corporate customers.

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Julian Reiche

I wouldnt be so sure... looking at the PS3 and the bill of materials for that console AMD is doing just fine, almost $300 a console as they have the GPU and CPU at the begining and a steady stream later on.

http://www.blogcdn.com/www.engadget.com/media/2006/02/ps3_cost.jpg

With pre orders of about or over 150K PS4's and XboxOne's thats about 45 million so far

http://www.vgchartz.com/article/251076/ps4-vs-xbox-one-pre-order-totals-to-june-15th-2013/

 

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John Pombrio

Julian, remember that AMD no longer owns any FABs to make their chips. Most of the cost is in the manufacturing with a small slice of profit for the license that AMD gets. AMD also has to try to out-engineer ARM, NVidia, Samsung, and that little company called Intel for future projects so most of the money that they have coming in pays for R&D. Game consoles, graphics cards, and chips for supercomputers frankly are a blip in AMD's financials. PCs, laptops, servers, smartphones, and tablets is where the money is, and AMD is struggling in those markets.

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PCWolf

Maybe if AMD cut down a bit on those Multi-Million dollar CEO Salaries, it would turn a better profit. Last thing I want is for AMD to go Under.

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QUINTIX256

That is a rather naïve thing to say. This is 74 million loss in a quarter, 220 million this half. Making executive compensation (which may be composed of not-so-liquid capital in the form of a stake in the business itself, not all spendable cash) less competitive would not put a dent in that loss. According to Forbes, Reed himself made all of 2.56 million total in an entire year, compared to the industry median of around 7.46 million. Not a quarter. Not 6 months. A year.

Running a tech enterprise is quite a bit more valuable than hitting a ball in a sports arena or being a pretty (vacant) face in a lazy-yet-somehow-profitable-film.

Quick math exercise: divide the compensation for the top brass at AMD (or any company) by the gross income in a given year, and multiply that ratio by the cost of their most expensive consumer product.

Got that number? Good, because as of retail margins (cost of labor of shipping, stocking, tracking, keeping the facility comfortable and well lit, and oh, dividends to share-owners), your contribution to the CFO/CEO/CTO/whoever else by buying that product is _less_ than that.

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Renegade Knight

I can lose that much a year and I can do it for a mere 500k a year. Turning AMD around is going to take guts and daring. Something CEO's don't seem to have. Wall street thinking can slow down the bleeding but it can't, and won't, EVER save a company.

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Refuge88

They have an impressive showing in budget build computers too I won't lie.

They make great APU's for small/cheap HTPC rigs too, with enough graphics umph to play some low/mid tier games and stream video all at 1080p.

It isn't the most glamorous gaming rig, but for an HTPC at about $350 that is future upgrade able it is a very nice option.