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

[Joseph DeGarmo]

Then if AMD is on its way out, it could eventually become the intellectual property of Google as a result of a buyout. It would make more sense if Google would purchase AMD because it could use the APUs in chromebooks and Android-based smartphones. Even Google could invest in marketing pre-built gaming Chrome desktops and consoles using AMD FX CPUs, RAM, and Radeon GPUs. Google could also release first-party in-house games exclusive to those machines the same way Nintendo does with its consoles.

 

[gamerk316]

Then if AMD is on its way out, it could eventually become the intellectual property of Google as a result of a buyout. It would make more sense if Google would purchase AMD because it could use the APUs in chromebooks and Android-based smartphones. Even Google could invest in marketing pre-built gaming Chrome desktops and consoles using AMD FX CPUs, RAM, and Radeon GPUs. Google could also release first-party in-house games exclusive to those machines the same way Nintendo does with its consoles.

Here's the thing though: Google doesn't need AMD for that. They can just license out production of another ARM variant, like Apple did with their SoC. The only thing valuable about AMD is their GPU division, and frankly, PowerVR is capable enough for a mobile system.

 

[haidergill]

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.

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.

To reiterate 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. So having a better product for the roughly the same price did not work. They need to buy or own a PC manufacturer to put their CPUs into.

 

[Joseph DeGarmo]

Then if AMD is on its way out, it could eventually become the intellectual property of Google as a result of a buyout. It would make more sense if Google would purchase AMD because it could use the APUs in chromebooks and Android-based smartphones. Even Google could invest in marketing pre-built gaming Chrome desktops and consoles using AMD FX CPUs, RAM, and Radeon GPUs. Google could also release first-party in-house games exclusive to those machines the same way Nintendo does with its consoles.

Here's the thing though: Google doesn't need AMD for that. They can just license out production of another ARM variant, like Apple did with their SoC. The only thing valuable about AMD is their GPU division, and frankly, PowerVR is capable enough for a mobile system.

But with 64-bit desktop CPUs, Google can manufacture a console powerful enough to compete directly against the Wii U. That way, Google could expand the casual gaming console market. Nintendo could use some competition and Google would be it.

 

[NightAntilli]

Maybe thats why GCN is still kicking, despite it's age starting to show.

Hahaha... GCN is one of the most versatile GPU architectures ever made. Its 'age starting to show' is quite funny, considering most of the cards keep up with nVidia cards despite being gimped under DX11. Maybe that's why we're 'stuck' (like you call it) on GCN. We're not stuck. The GPUs potential simply has not been used yet. There's a reason the latest consoles went with this 'outdated' architecture.

I'll just be leaving this here so you can inform yourself;
http://www.overclock.net/t/1572716/directx-12-asynchronous-compute-an-exercise-in-crowd-sourcing

As for AMD's last hope for survival being the Zen CPU architecture, well, maybe. Not sure. Generally, profit in the CPU market is more influenced by OEM (like Dell, HP and so on) rather than the average consumer. They need to stop making losses in the CPU department at least, and maybe the GPU department can carry the company. Zen might indeed do this, but, AMD needs mass market share through OEM. The high end buying stand-alone CPUs don't influence that much, although it would improve their reputation, which ultimately will give them quite a few benefits.

AMD will not be allowed to die. In the console space alone, it's too inconvenient for Microsoft due to the Xbox One, Sony due to the PS4, Nintendo due to the NX. Outside the console space there are enough other companies who benefit of keeping AMD alive. At worst, a full take-over will happen with a lot of people losing their jobs.

 

[RobCrezz]

Then if AMD is on its way out, it could eventually become the intellectual property of Google as a result of a buyout. It would make more sense if Google would purchase AMD because it could use the APUs in chromebooks and Android-based smartphones. Even Google could invest in marketing pre-built gaming Chrome desktops and consoles using AMD FX CPUs, RAM, and Radeon GPUs. Google could also release first-party in-house games exclusive to those machines the same way Nintendo does with its consoles.

Here's the thing though: Google doesn't need AMD for that. They can just license out production of another ARM variant, like Apple did with their SoC. The only thing valuable about AMD is their GPU division, and frankly, PowerVR is capable enough for a mobile system.

But with 64-bit desktop CPUs, Google can manufacture a console powerful enough to compete directly against the Wii U. That way, Google could expand the casual gaming console market. Nintendo could use some competition and Google would be it.

Google doesnt need to invest billions in a company to get 64bit desktop cpus.

 

[Joseph DeGarmo]

Then if AMD is on its way out, it could eventually become the intellectual property of Google as a result of a buyout. It would make more sense if Google would purchase AMD because it could use the APUs in chromebooks and Android-based smartphones. Even Google could invest in marketing pre-built gaming Chrome desktops and consoles using AMD FX CPUs, RAM, and Radeon GPUs. Google could also release first-party in-house games exclusive to those machines the same way Nintendo does with its consoles.

Here's the thing though: Google doesn't need AMD for that. They can just license out production of another ARM variant, like Apple did with their SoC. The only thing valuable about AMD is their GPU division, and frankly, PowerVR is capable enough for a mobile system.

But with 64-bit desktop CPUs, Google can manufacture a console powerful enough to compete directly against the Wii U. That way, Google could expand the casual gaming console market. Nintendo could use some competition and Google would be it.

Google doesnt need to invest billions in a company to get 64bit desktop cpus.

But if AMD fails, then some other company should pick them up, right? Like IBM, Amazon, or Microsoft.

 

[gamerk316]

Then if AMD is on its way out, it could eventually become the intellectual property of Google as a result of a buyout. It would make more sense if Google would purchase AMD because it could use the APUs in chromebooks and Android-based smartphones. Even Google could invest in marketing pre-built gaming Chrome desktops and consoles using AMD FX CPUs, RAM, and Radeon GPUs. Google could also release first-party in-house games exclusive to those machines the same way Nintendo does with its consoles.

Here's the thing though: Google doesn't need AMD for that. They can just license out production of another ARM variant, like Apple did with their SoC. The only thing valuable about AMD is their GPU division, and frankly, PowerVR is capable enough for a mobile system.

But with 64-bit desktop CPUs, Google can manufacture a console powerful enough to compete directly against the Wii U. That way, Google could expand the casual gaming console market. Nintendo could use some competition and Google would be it.

Google wouldn't be able to use the AMD64 arch anyway, since the X86 license it's built on is non-transferable. And it's not like 64-bit ARM isn't a thing.

Let me be clear: There's nothing of value worth purchasing from the AMD CPU division, as the X86 license (and by extension, use of AMD64) is non-transferable.

 

[gamerk316]

So it begins:

http://www.fudzilla.com/news/processors/38694-private-equity-to-get-20-percent-of-amd

This implies AMD didn't have the cash to make it to the Zen release. AMD is officially out of chances now.

 

[Joseph DeGarmo]

So it begins:

http://www.fudzilla.com/news/processors/38694-private-equity-to-get-20-percent-of-amd

This implies AMD didn't have the cash to make it to the Zen release. AMD is officially out of chances now.

So now with AMD soon to be out of the picture, Intel and NVIDIA are free to hike up the prices of CPUs, motherboards, and GPUs. We could soon be seeing $350 Core i5-6600k CPUs, $400 ASUS Maximus VIII HERO motherboards, and $800 GTX 980 Tis. Not good since I plan to eventually buy a GTX 980 Ti 🙁

 

[Suzuki@1473780084@1473780163]

No, Intel will take over AMD, worst case a few people might lose their jobs. Intel needs and wants competition.

 

[gamerk316]

AMD won't be going anywhere yet; they likely have the cash now to make it to 2019 regardless, but when that $600 Million of debt turns over, they better be making a profit. Simply put, with $2.2 Billion in debt, $800 Million cash on hand, and loosing $400 Million per quarter, AMD needed someone to invest some cash.

Zen CAN turn the company around, but it isn't about cutting losses anymore, AMD needs to start turning a significant profit so it can eventually pay it's debt. But no one really thinks Zen will be faster then Skylake, so the current dynamic likely remains, which is bad for AMD.

 

[RobCrezz]

No, Intel will take over AMD, worst case a few people might lose their jobs. Intel needs and wants competition.

How is it competition if Intel take over?

 

[gamerk316]

No, Intel will take over AMD, worst case a few people might lose their jobs. Intel needs and wants competition.

How is it competition if Intel take over?

Intel competes with:

ARM (ARM Holdings) & PowerPC (Freescale/Motorola) in Embedded
POWER (IBM) & SPARC (Oracle) in Servers

Intel has plenty of competition. It's only the Desktop market where Intel is unpushed, due in large part to the decline of alternate CPU architectures, thanks to Windows.

 

[urishima]

But no one really thinks Zen will be faster then Skylake, so the current dynamic likely remains, which is bad for AMD.

Do or die then. Either blow everyone's socks off into LEO or start digging that grave. No pressure.

 

[gamerk316]

Which is why I'm said for YEARS that AMD should have focused mobile right after the ATI purchase. Instead, they decided to double down and compete against Intel in the high end, missed the mobile boom that they could benefit from more then most (as they could do a full SoC by themselves), then keep going off in tangents (ARM, Servers, High-End, APUs) rather then just focus on one spot.

Hence why I feel parts of AMD will get sold for cash, because AMD simply can't compete in every segment anymore. They need to decide what they are going to be. And honestly? Their best chance is still low-cost, low-performance parts that undercut Intel at the low-end. I know you don't want to hear that, but that's how it is now. AMD simply can't compete head to head with Intel/NVIDIA anymore.

 

[NightAntilli]

Fudzilla is the worst site for reliable news. 9/10 times they are wrong on their info from so-called 'sources'.

 

[gamerk316]

True, but this has been rumored for a long time now by other, much more reliable sources. Semiaccurate in particular hinted at this over a month ago, and already has done an analysis on this. I fully expect other sites to pick this up later today.

 

[urishima]

True, but this has been rumored for a long time now by other, much more reliable sources. Semiaccurate in particular hinted at this over a month ago, and already has done an analysis on this. I fully expect other sites to pick this up later today.

Personally I have adopted the policy to assume rumors like this to be wild speculation, until I hear an official statement.

 

[Suzuki@1473780084@1473780163]

AMD aren't behind NVIDIA, in US they might be, but in Europe you get more for your money. I would say they are equal. Yes, always assume rumors are false...

 

[RobCrezz]

AMD aren't behind NVIDIA, in US they might be, but in Europe you get more for your money. I would say they are equal. Yes, always assume rumors are false...

In what way? Performance per Euro?

They are still behind in Performance per Watt AFAIK.

 

[urishima]

AMD aren't behind NVIDIA, in US they might be, but in Europe you get more for your money. I would say they are equal. Yes, always assume rumors are false...

In what way? Performance per Euro?

They are still behind in Performance per Watt AFAIK.

I recon he means in terms of market share or sales figures? I find that hard to believe, given the state AMD is in right now.

 

[gamerk316]

This better not be the "counting APUs" argument again...

 

[naturesninja]

Texas Instruments is making a new 64 pin I hear...

 

[jaguarskx]

Texas Instruments is not going to bother getting into the consumer CPU market because the market itself is not really expanding and the profit margin is too low for them to bother with that sector. In 2012 they exited the mobile market (smartphone and tablet ARM) because of "vertical integration". Basically that means that the two largest sellers of tablets and smartphones (Apple & Samsung) basically use ARM processors they have designed / manufactured in their own products. While this is not the case in the PC market (Intel doesn't really sell many products directly to consumers), they have contracts with many OEMs to use their CPUs.


There is still one last chance for AMD later if they are still struggling financially and that is to file for Chapter 11; bankruptcy. While in Chapter 11 AMD can reorganize its business as it attempts to offload debt and return to profitability. However, studies have shown that only around 10% - 15% of companies that files for Chapter 11 successfully emerges from it as a profitable company. The remaining 85% - 90% goes to Chapter 7; liquidation.