Discussion: AMD's last hope for survival lies in the Zen CPU architecture

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Joseph DeGarmo

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Mar 12, 2014
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The struggling chip maker, AMD, has had a bad run with the Bulldozer CPU architecture. While the Piledriver architecture has somewhat improved upon that, its processors still fall well behind Intel's latest offerings. AMD's upcoming Zen architecture, releasing in 2016, will deliver improved single-core performance. The chipmaker will also focus on increasing the number of instructions that a core can process each clock cycle, thus leading to more power-efficient cores. The chips will be built on the 14 nm architecture, bringing them up to par with Intel's Skylake architecture. If AMD does not deliver on this new generation of FX processors, then it will likely be a nail in the coffin for AMD as far as the CPU market is concerned. More details on The Motley Fool website.

Source: http://www.fool.com/investing/general/2015/08/25/zen-is-advanced-micro-devices-incs-last-chance.aspx
 
It likely won't change any time soon, people want the juicy news even if it's pure speculation. Rather than getting out in front and telling people why a product is 'supposed' to be better they might be better served by keeping it under wraps until they can test it. Then if it delivers, promote it and share the how and why of it. Amd's been bad about this but intel and nvidia aren't immune from it either. It's a hype machine that rarely delivers.

Hopefully zen can improve on their ipc which is what's killing them. More cores and breakneck speeds are just bandaids to a problem that aren't providing a solution. Redlining a cpu to get 10-15% higher ipc isn't a winning method as they've figured out. They need a 40-50% ipc improvement just to try and catch up, much less beat out intel.
 
If AMD can deliver on IPC this time around, and manage to sustain their multicore performance in the process, hopefully they can hold out long enough to delve deeper into their RND and make some headway back into the market.

Brand dosent matter in my eyes, its performance and pricing. If one manufacture cant keep up, its bad for pricing.
 
I agree to some extent, however in reality I don't think it has near as big of an effect on pricing. Intel rarely discounts their products, they don't really get into the discount and price slash game. Amd has had to cut prices to more appropriate levels based on their performance. Assuming zen can compete head to head with i5/i7, rather than seeing $160 zen cpu's and intel dropping 6600k and 6700k cpu's to $170 I think we'll see the intel cpu's staying at a steady price and zen running around $230.

Pricing history in the past didn't show amd to be the discount kings, when they had competitive products they had chips selling for over $900 right along with intel. This whole slash prices in an attempt to be the bang for the buck winner was their last ditch effort to move product when it failed to compete. Given the chance to compete, amd isn't shy about turning a profit. Wishful thinking that once there's competition it means affordable dollar store hardware prices for everyone but in reality it usually doesn't work out that way.

Consider the fast food market and their marketing. Most chains had a variety of burgers from $1 to $3. When one chain decided to go the other way and make a $5-6 'premium' burger the others didn't hold fast and win out selling cheap product. Instead most of the chains have $6-$7 burgers now and good luck finding much for a dollar or two. A higher selling product opened the door to competition selling similar products at those higher prices. We didn't see premium burgers fall to $3-4 because of competition, if they all charge higher prices the customer has to choose between higher prices and higher prices. It's a win/win for companies.

Overall, the cost of the hardware out there today isn't bad and I'm willing to bet between materials, production and r&d companies like intel are working on fairly slim margins to begin with. Everyone just assumes we should all be driving mercedes that cost $10k. As much as people compare products, nitpick on performance and slam one company or another our selection of hardware today is far better than it ever was. Not only more variety but overall performance. What people snub as 'low' end or mid grade, the current bottom of the barrel is better than the high end flagship products from several years ago. For people who remember the days when via made cpu's or the budget chips were weak celerons or duron/semprons, those chips don't exist today.
 
No AMD is far from done , They will use IBM's 7 NM manufacturing process, after they are done with the 14 NM process
another product after Zen +
will probably be at 7nm

 
AMDs financial problems don't become acute until 2019-2020, but at that point, they better be making a profit. AMD is currently valued at $1.2 Billion, but also has $2.2 Billion of outstanding debt. In 2019, $600 Billion of that debt will come due, and need to be paid off or refinanced, and another $450 Million is due in 2020.

In short: By 2020, AMD will need to pay off or refinance debt payments that are equal to the total valuation of the company. That's not a good financial position.

What AMD has been doing is basically taking on more debt to pay it's current debts, kicking the can down the road. In addition, RND spending is down 40% from 2010, so it's unlikely AMD could come up with a new arch if Zen falters. Maybe thats why GCN is still kicking, despite it's age starting to show.

It comes down to sales. Independent of how Zen actually performs, AMD needs to convince consumers and OEMs to purchase their product. And right now? Good enough doesn't cut it anymore. And I think that's why AMD is done.
 
Dual Graphics isn't worth it, as has been shown countless times by reviews. The weaker APU chokes performance of the higher performing dedicated GPU, and 9/10 times, you're better off simply using the dedicated GPU.

Nevermind putting a dedicated GPU into a system with an APU defeats the entire purpose of the APU; might as well go FX instead at that point.

So yeah, please ignore the marketing.
 
Doesn't intel put dedicated GPU's right along side their integrated graphics processors? The point is power when you need it, and energy efficiency when you don't. I'd like to see how many batteries are lasting beyond 2 maybe 3 hours with only a dedicated GPU to work with. But yes dual graphics isn't do them any favors, and it doesn't help when your marketing products by almost lying about them. Take the M265DX for example. It's marketed as almost saying there are two dedicated gpu's in this laptop (look them up, it's borderline politician marketing). The real problem is that it's not even a M265X, but a M260 xf'ing with a weaker APU.

Here's one: http://www.amazon.com/X550ZE-DB10-15-6-Inch-Graphics-Windows-Upgrade/dp/B00YR6BJLC/ref=sr_1_1?ie=UTF8&qid=1441128865&sr=8-1&keywords=m265dx
 
when amd revealed that 40% IPC Improvement I was genuinely thrilled..
But then I was watching a Tech Report Podcast where David Kanter was speculating whether this was inclusive or exclusive of SMT. So if that includes SMT then single-threaded performance of Zen would probably be as good as Sandy Bridge I believe and if not then Haswell which will be great.

That's the biggest question really. What do you guys think ??
 
I have a rule: Assume the stated performance gains are "best case", and assume the "typical case" is half what is stated. So I'm assuming 20-30% IPC gains typical. I figure a good portion of that is via SMT, so I believe the true single-threaded gains are closer to the 10-20% range at most, or similar to the Ivy Bridge -> Haswell jump Intel had.

Make no mistake: AMDs single threaded performance will remain lower then Intels, so Intel will continue to perform better in gaming.
 

nah.. Dx12 is coming out so it would matter less.
 


DX12 isn't a magic bullet, and anyone thinking otherwise needs their heads examined. There's a reason we went to simplicity at the cost of performance, and i fully predict the first DX12 games, especially the AAA ones, are going to be bug filled disaster which will make Arkham City look like a perfectly optimized port by comparison.
 


According to the following article there is a clause in the AMD-Intel cross licensing agreement (term 5.2d of the agreement) which would allow Intel to continue to use AMD's IP (AMD64) in the event AMD is acquired or goes bankrupt. The reverse applies as well; should Intel be acquired or go bankrupt AMD can continue to use Intel's IP (x86).

http://www.kitguru.net/components/graphic-cards/anton-shilov/amd-x86-license-agreement-with-intel-cannot-block-our-merger-or-acquisition/

Link to the AMD-Intel license agreement:

http://www.sec.gov/Archives/edgar/data/2488/000119312509236705/dex102.htm
 


Your argument makes no sense ..

 

I agree now dx12 is to little to late for fx cpu but I'll have to disagree with respect on the state of future dx12 games and I also believe it is sort of a magic bullet but for gcn now.

 
Last time AMD had a better processor in terms of performance and for roughly the same price Intel offered rebates to PC builders not use AMD or delay products based around AMD. If said manufacturer did not comply Intel would give the rebate they offered to the PC builders competitor on top of what those competitors would receive via the rebate programme. The PC builders competition would then be able to undercut them. EU fined them but next time what's to stop them doing the same from the article below 'In its original antitrust filing, AMD noted that it tried to give HP a million free processors at one point, only to be told that HP was so dependent on Intel rebates, it couldn’t afford to take them.' http://www.extremetech.com/computing/184323-intel-stuck-with-1-45-billion-fine-in-europe-for-unfair-and-damaging-practices-against-amd . To borrow and modify a Malay phrase 'Buy Intel last.' .
 
i haven't seen any reports proving where AMD is struggling financially. they're not reaching the top tier as the best manufacturer out there, but there's still millions buying and using their FX series, their APUs, and their GPUs.
 


AMD is a year or two from being bankrupt. And no, I'm not overdramatizing. Their total debt is $2.1 Billion, their total value is just over $1.2 Billion. They lost over $400 million last quarter. They're paying off their debt by taking on more debt. AMD's fiances are absolutely dire right now. And in three years, AMD needs to come up with $1 Billion in CASH to meet it's debt obligations.

http://www.investopedia.com/articles/markets/081415/advanced-micro-devices-bankruptcy-imminent.asp?partner=YahooSA

http://www.investopedia.com/articles/markets/081715/will-advanced-micro-devices-amd-ever-make-comeback.asp?partner=YahooSA

http://www.fool.com/investing/general/2015/08/23/advanced-micro-devices-inc-loses-more-market-share.aspx?source=eogyholnk0000001

http://www.fool.com/investing/general/2015/08/25/zen-is-advanced-micro-devices-incs-last-chance.aspx?source=eogyholnk0000001

The last one does the best explaining AMD's current debt situation:

AMD is saddled with quite a bit of debt, about $2.27 billion at the end of the latest quarter. The good news is that none of that debt matures until 2019. At that time, $600 million of debt will need to be paid off or refinanced, with another $450 million maturing in 2020.

AMD is on the hook for about $160 million of interest payments annually, and the company has been burning through cash in recent years.During the past twelve months, AMD's free cash flow was a loss of $187 million, but with $829 million of cash remaining, AMD should be able to fund itself through 2019, even if things don't get any better.
Click to expand...

Point being, AMD has cash on hand for TWO QUARTERS worth of losses like last one's. They also don't have the cash on hand to meet their 2020 debt payments, and they continue to lose both CPU and GPU share.

AMD is basically cutting R&D and borrowing more money to keep itself financed, in the hopes Zen can turn things around. Even the GPU division is being starved; why else are we still stuck on GCN? AMD is betting the company on Zen, and from what I've heard, it's not enough. AMD can simply not afford to be "good enough" anymore; there's not enough margins to keep the company afloat as it is currently constructed.

I feel it's a forgone conclusion the old ATI unit gets spun for cash at this point. I don't think AMD will go totally bankrupt, but it's not outside the realm of possibility.
 
Just look at their financial statements.

http://www.bloomberg.com/research/stocks/financials/financials.asp?ticker=AMD


A couple of things to note is a -$708 million "Other Unusual Item" charge in 2012 and -$233 million "Impairment of Goodwill" charge in 2014. You will need to read AMD's 2012 Annual Report to find out what the "Other Unusual Item" was and the 2014 annual report to determine why they needed to reduce their goodwill.

Goodwill is an intangible asset, but nevertheless it is part of the balance sheet so it does have an impact on the overall value of a company.
 
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