AMD Ryzen: Good For Enthusiasts, Bad For Investors

[Guest]

The news that AMD took a drubbing in the stock market was quite unexpected, especially considering the company's solid revenue growth. There are a few interesting caveats to the company's recent maneuverings that might give us some insight.

AMD Ryzen: Good For Enthusiasts, Bad For Investors : Read more

 

[InvalidError]

AMD has too many similar and closely priced products. I'd just axe the 1700X and drop the 1800X closer to $400. At the low end, there isn't much that can be done, trying to push 4C 4/8T CPUs cut from the same 8C16T die hurts margins.

 

[JamesSneed]

The market is correcting for being overly optimistic on AMD stock however it over-corrected so Q2 should be better for AMD stock. Its rather obvious AMD is trying to get its CPU market share up, which in the long term is going to be better for AMD. The short term they are sacrificing profit per CPU(margins) by having all these unlocked skus. I honestly don't think they need to correct anything with margins until Zen+ is out as they are playing a longer game than most analysts realize. When Zen+ comes out they really should think about an Intel like lineup on unlocked skus to get margins up. More importantly they need big Vega to be very strong, as in Nvidia 1080ti strong, or they will end up having low margins for GPU's as well and that may hurt a bit to much.

 

[Guest]

The thing is that AMD Ryzen 1800x for $499 is not that even good.

 

[captaincharisma]

you mean cheap enthusiasts. after how long AMD CPU's have been under performers AMD's user base consists of mainstream users looking for a cheap computer to surf the web and check e-mail while the rest are just AMD fanboys who are against Intel for some ridiculous reason.

 

[Amdlova]

i want a amd system again. miss my old times tryn to push more juice from the cpu.

 

[Ricky Brian]

Considering the estimated cost of each die is about US$42 (assumption: US$8K 14nm wafer, 60% yield, 192mm^2 die size), charging $169 is well above 50% gross margin. This "article" is such a xxxx in my mind.

 

[salgado18]

They should have locked the maximum multiplier of the lower tier CPUs. Like the 1700 should clock up to 3.4, the 1700X up to 3.7 and the 1800X should be fully unlocked. A bit Intel, I know, but enthusiasts would buy the 1800X, professionals would buy the 1700, and the middle ground would buy the 1700X (because 3.7 GHz is good enough).

Then, XFR should be the maximum possible for everyone. The diferentiation would be on overclocking room.

Also, they should have tried to develop, in paralel, a CPU with only one CCX. Even if it took a few months more to release it, and it would take more resources, margins on lower-core products would be much higher, and those would be the volume sellers. Release 8 and 6 core on Q1, release 4 core on Q3, restricted multipliers on non-top SKU, and problem half solved.

 

[salgado18]

Considering the estimated cost of each die is about US$42 (assumption: US$8K 14nm wafer, 60% yield, 192mm^2 die size), charging $169 is well above 50% gross margin. This "article" is such a xxxx in my mind.

And charging $500 for the 8 core is about 91% gross margin. However, that margin has to repay all the investment, AMD sales will start very slow, and lower tier CPUs have more value. The article is spot on, sorry.

 

[jaber2]

Intel's EN was not correct according to the "Balance of Power" diagram, it was leaning towards special.

 

[synphul]

Their pricing, whether from amd themselves or the retailers, makes little sense. Take the r7 8 core cpu's. There's currently a $48 difference between the r7 1700 and 1700x. So for $48 you get the addition of xfr and 400mhz extra base speed, 100mhz extra boost speed. But if you spend $100 more than the 1700x you get an extra 200mhz. That's it. The 1700x already has xfr so there's literally a 200mhz difference (300mhz xfr) for $100.

Put another way they're charging over 27% more for less than 6% clock speed. Which begs the question why? What point does the 1800x have? It's no wonder prices have already begun to plummet, that's after the chips lowered in price.

Yes intel's enthusiast cpu's command a much higher price than the mainstream desktop quad cores but even with the gap in price at least consumers are getting additional cores and threads coupled with higher cache and additional pci lanes. Does it justify the price from $340 for a 7700k to $1000 for a 6900k? No, but at least it's something as in double the cpu cores/threads. The 6800k is only $50 more than a 7700k and the user gets 2 additional cores.

$100 for 200mhz, they have to be kidding. Especially when the 1700/1700x can be oc'd and even a slight oc will make up the puny clock speed difference. I notice these glaring issues in the lineup and I'm not even an investor. It's not really surprising investors might be having second thoughts. Even if it's artificially created intel made sure that charging a slight premium for a k vs non k meant overclocking vs factory speeds.

They certainly don't charge a 27% premium to go from an i5 7400 to i5 7500. The i5's are a great example since they offer the same clock speed difference from one model to another that amd's offering between the 1700x and 1800x. The only difference is intel only charges $10 (5% additional) for the speed increase rather than 27%.

Kind of an interesting situation from amd when so many accuse intel of gouging their customers. Flagship products are never the bread and butter for a company but they're supposed to be the poster child for the company's achievements. The current amd flagship is suffering not from performance issues like their last flagship fx 9590 but from price/value perspective this time around.

 

[quilciri]

AMD would be able to move more of their higher binned "X" chips if they figured out and corrected whatever is holding *all* the chips to a 3.9-4.1Ghz ceiling...and they need to do this quick, imho.

It's curious that this happens regardless of how many functioning cores are on the model. Anyone else remember the "5Ghz on air" announcement for a single core in december and the rep claiming the hurdle for overclocking all cores was the VRM? I was expecting somewhere in the vicinity of 4.4Ghz all core OC on the higher binned 8 cores; more for the 6 and 4 core X chips.

 

[InvalidError]

Put another way they're charging over 27% more for less than 6% clock speed. Which begs the question why?

Back in the P3, P4 and Core Extreme Edition CPUs, Intel did the same thing, charge way more than the incremental gain in clock frequency. The relationship between price and performance gets very screwy once you pass the $300 or so mark where the mainstream ends and the high-end/server space begins.

 

[Neuspeed]

AMD simply can't get it together. Their latest and greatest is only comparable to Intel's broadwell that's been out for a while now. I was hoping AMD would come thru considering they have a different CEO and new CPU lineup, but is just more of the same. Won't be long before Intel leaves AMD in the dust once again.

 

[Brian_R170]

I still don't understand why Tom's is talking about the AMD from the investor's perspective. Save that for MotleyFool or TheStreet and get back to the technical perspective, please. At least illustrate what it means from a technical perspective: lower gross margins mean lower operating profit which mean less money to invest in R&D. Lower stock prices also mean lower employee retention, which can also hurt R&D.

 

[Bloob]

AMD was overvalued, now it's slightly undervalued. Margins may drop thanks to many things, and AMD has loads of mass market products which outweigh Ryzen demand, which naturally drops margins.

 

[elbert]

Didn't AMD's quarter end in March? The Ryzen 5's may have already turn around the issue due to they didn't start sales until April 11. The only impact the Ryzen 5's had was the cost of creating the supply. Analysts and investors should have been jumping for joy given Ryzen only had a month to turn the quarter around.

 

[rhysiam]

AMD needs market share. While I realise investors would prefer consumers spend more money on the higher margin "X" variants, I don't think the price-performance is quite good enough on those parts. The Ryzen 7 1700 offers fantastic value for productivity, while the Ryzen 5 1600 IMHO makes it very difficult to recommend an i5 build at all. But if 8/6 core prices started at 1700X/1600X levels right now, I'm not sure I would still recommend them, or at least it would be a much closer battle.

Nope, AMD need the 1700 & 1600 non X CPUs to remain competitive and grab market share. If they have to price those CPUs there to compete, then why not bin some of the better silicon, slap an "X" on the end, bump the clocks a little and try to get higher margins on a few SKUs at least? Surely you can't fault them for that? Other companies do it too. Since Nvidia stripped the FP64 compute performance out of Titan cards (since Maxwell), they still sell them after the "x80ti" card launches. Right now the GTX Titan (Xp - or whatever it's called) basically serves as a halo product for the very few who are prepared to pay twice as much for marginal performance gains just to get the best. AMD as the underdog can't get away with that, but surely then sell some binned SKUs with an "X" at higher price?

 

[Jamie_69]

The 1400 and 1500X were both on sale on Amazon UK last week for £20 under their MSRP at £150 and £170 respectively. Both are currently discounted by £10 and the 1600 by £20.

 

[Co BIY]

Intel price cuts are already here.

i3-7350K dropped another $20 at Microcenter. At $129 it looks pretty good.

 

[artk2219]

AMD would be able to move more of their higher binned "X" chips if they figured out and corrected whatever is holding *all* the chips to a 3.9-4.1Ghz ceiling...and they need to do this quick, imho.

It's curious that this happens regardless of how many functioning cores are on the model. Anyone else remember the "5Ghz on air" announcement for a single core in december and the rep claiming the hurdle for overclocking all cores was the VRM? I was expecting somewhere in the vicinity of 4.4Ghz all core OC on the higher binned 8 cores; more for the 6 and 4 core X chips.

It seems like they just need another process revision, when the Phenom II originally came out it similarly looked like it had a bit of life left in it but the process wasn't there to extract it yet. They then released the C3 revision which immediately dropped the Phenom II 965's from 140w to 125w chips, and added a bit of OC headroom, or at least lowered the required voltage for a given clock. AMD and global foundries eventually got the 45nm process down good enough to release the 6 core phenoms and get some really decent clocking chips, some of those x6's would do 4.2 to 4.4, and most could hit around 4 without much fuss (from 3.2 or 3.3 ghz). I see the current crop of chips following a similar route, they were good enough to get out the door in their current state, but id wait 6 to 9 months for the really decent clocking chips to start coming out. Probably when the mobile cpu's start coming out, since they will see the most benefit from these enhancements. I can see 4.1 to 4.4 being the new standard in the near future, or at least a drop in voltage for the current clocks. Guru3d was used as the source below because frankly they had good direct OC'd and stock clocked comparisons for the Phenom II's, and I haven't been on the site in a while.

http://www.guru3d.com/articles_pages/phenom_ii_x4_965_be_revision_c3_review,5.html
http://www.guru3d.com/articles_pages/phenom_ii_x6_1100t_be_review,5.html

 

[neiler0847]

I don't understand the integrated graphics comment. It is true that the Ryzen processors don't have graphics functions right in the CPU, but every Ryzen motherboard does. As a consumer, it still looks like integrated graphics to me.

Does the delegation of graphics functionality to other chips on the motherboard mean that the X370 chipset is more costly to make than the Z270 (making AM4 motherboards more expensive?)

 

[InvalidError]

Does the delegation of graphics functionality to other chips on the motherboard mean that the X370 chipset is more costly to make than the Z270 (making AM4 motherboards more expensive?)

There is no delegation. The motherboards' display outputs are intended to be driven my the APU but there are no Ryzen APUs available to put on the AM4 socket yet, so those outputs are currently useless.

 

[artk2219]

Does the delegation of graphics functionality to other chips on the motherboard mean that the X370 chipset is more costly to make than the Z270 (making AM4 motherboards more expensive?)

There is no delegation. The motherboards' display outputs are intended to be driven my the APU but there are no Ryzen APUs available to put on the AM4 socket yet, so those outputs are currently useless.

Eh not entirely, if you were so inclined you could shove a Bristol Ridge chip in there and use it as a placeholder for the newer APU's. I was tempted by that possibility when i found someone selling an A12 8870 for 70 bucks (although technically I guess that is Carrizo PRO), unfortunately other than certain rare instances, Bristol Ridge basically doesn't exist outside of very select OEM designs.

http://www.cpu-world.com/CPUs/Bulldozer/AMD-A12-Series%20PRO%20A12-8870.html

 

[bigdragon]

Poor analysts and investors. I'm trying to shed a tear for them -- I really am. It's not working though.

AMD's stock drop simply means it became more affordable to purchase more of. I think it'll go back up. Right now we're experiencing the tunnel vision that is prevalent in the PC industry. Analysts and investors have no ability to handle paradigm shifts. They're all too happy to play follow-the-leader. They just want AMD to copy paste what Intel is doing. That was an ineffective strategy AMD ought not repeat.