somebodyspecial
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- Sep 20, 2012
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If you don't own stocks I guess you can just consider this TLDR and scroll down now guys 😉
WRONG...Nvidia loses money every year on tegra. They will need to break 1Billion in tegra revenue (this is the assumption anyway) before having a chance at making a SINGLE dollar. Last quarter they lost ~130million on the tegra unit. They have NEVER made a dime on it yet. ALL losses. Read balance sheets please or heck, any article on their Quarterly reports. I do thing Tegra has a chance of collecting finally this year though as the list of T4 models is long now and they're just getting out there. If K1 is in shipping products before July in decent quantity this will surely help.
The graphics division at AMD isn't making HUGE profits even with consoles (Q4 just posted, 121mil). Also ATI themselves NEVER made ~60mil before AMD bought them. That division has always put out great products, but AMD doesn't seem to understand they are pricing themselves to death vs. NV who has no debt and tons of cash. Most of the $121mil this quarter was 3 months of stocking up xbox1/ps4 chips for xmas. You won't see this next Q an we should see a GF $200mil payment that eats anything consoles do next Q (it isn't in this report, so I guess a payment due Dec31 actually slips into Q1 as some have said previously. You will never win a price war if you're in debt and they have 3Bil cash assuming products are basically the same perf (which has been the case for years). You are correct that MOST of their losses are NOT from the gpu division, but they have still had many losses in the last 5yrs. With the mining people buying up all AMD stuff I expected more from them, but I guess not. Then again it seems miners are tired of buying them now (you can only mine early or you don't get your money back despite AMD's claims of $704/year), as there are lots of stock around now with most saying prices are NOT $400, newegg for instance lists the MSRP much higher for both AMD cards on every card listed. I really don't think AMD ever sold one for $400 or intended to. I think it was just to LOOK like they were cheaper than NV. They are in stock and prices haven't dropped. Even if you try going to AMD's site they are ALL higher. Miners are done I guess.
We'll have to wait a quarter or two to see if consoles are done too. There was large pent up demand from hardcore users but that's over now. Those people that bought so far would buy next gen consoles no matter what and a huge portion were pre-ordered (which takes balls on any product so clearly hardest of hardcore people here). The rest of us will have to be convinced and they are not that convincing. Devs interest shows this too. GDC 2014 (march) will shed some light on dev interest even more (60% mobile last year, ~12 for consoles). I expect it to be 65% mobile this year and even less for consoles. It's telling when a dev like Epic says they made more money per man hour on Infinity Blade than any gears of war games for consoles. OUCH. That game ONLY runs on apple too (made before android really took over), and with far more being sold on android now I expect devs to go further into both ios and android while further ignoring consoles until they get far more out the door. Which means you'll be waiting on game from anyone but Sony/MS (and clearly EA in there too). Not much else. I didn't buy xbox360 until 3rd board rev and the die shrink (to end RROD). I won't buy this gen at all as mobile will catch them 3yrs in when I normally buy, and android has a crapload of apps/games for my TV (HDMI out from any device these days)
Shield rev2 in a few months will ignite even more gamepad games (and new samsungs will ship with pads too). Clearly mobile is trying to eat consoles lunch and it appears (based on dev interest) to be working well.AMD another loss for last year (making money for a quarter doesn't cover a year's loss). I would be surprised as noted before if they turn a profit this year. GF 200mil payment looming, they probably won't be able to make the next wafer start amount either, so another loss at some point this year on top, and consoles with the help of a new launch and xmas sales still only mustered 121mil and that won't happen for the next 4 quarters this year. Xmas is only one quarter and as noted pre-orders from hardcore people are done. If consoles socs were made at GF this would be a different story I think, but they are made at TSMC (stupid when you need wafer starts, you kill yourselves paying GF all of your console gains). I guess GF couldn't get the job done so AMD had to go where they could for xmas consoles to be launched at all. I hope they can change at some point to GF to help wafer starts or any profits will be eaten by GF fines which will just get us another few rounds of PHASE 1, 2 ,3 drivers from AMD again this year. I think a lot of people have no clue about the GF fines coming and will be burnt by any run up in AMD stock over this Q. Take any pop in the stock and exit I say for at least a while until we find out about GF fines.
CPU's are clearly not going to go up much with a slump and Intel coming for the low end now as their only defense currently to ARM (ARM ate 21% of ALL notebook sales just with chromebooks alone!, what happens this year with K1's etc? Denver's for xmas, 64bit all around etc). Intel has to go into AMD APU territory even if they don't want to at this point. So AMD will be fighting ARM and Intel on cpu/apu, and NV in gpu. Consoles fighting all Mobile with mobile catching them in 2015/2016 at 14nm (or pretty close to catching them, only have to get close enough with some great games this next 2yrs to kill some consoles sales, look at the chromebook sales for same story), and surely Intel will have 10nm socs by 2016 at worst as they have no reason to put the next few shrinks on desktops first, they are clearly going SOCS first now. I'm not predicting an Intel victory in mobile here, just pointing out they are seriously going low-end now which is all AMD has for the bulk of their revenues. No ARM variant from AMD in mobile until 2015 sucks too (Seattle is server only). Gsync will be everywhere by xmas (TN panels only now so not much interest for some) on all panel types (IPS, TN etc) so will probably start to make a dent by then in gpu sales. Freesync isn't as good and not even on the map yet according to AMD themselves (not a product for market yet). I don't see how AMD gains gpu share this year.
http://vr-zone.com/articles/intel-talks-new-strategy-expands-atom-roadmap-sofia-broxton/64740.html
"Intel’s goal for the mobile sector is to increase mobile GPU performance by 15 times and CPU performance by a factor of five by the end of 2015, according to Krzanich."
"Though Intel is leading its competitors with its 14 nm process node, it wants to go even smaller. Krzanich said Intel will “not take our foot off the pedal” as it pushes for 10nm by 2015."
Even if they are late, Intel at 10nm in SOCS shouldn't be bad. A clear victory vs. consoles in cpu at 10nm, and I expect their gpu by then will be decent as they are dumping all shrink power into gpu even now as cpu gets almost nothing but some optimizing right? This is all bad for AMD and consoles. I say 2016 for a product I can buy, I think krzanich is talking themselves shipping something 2015 at 10nm not a product we can buy, but either way you can't argue 10nm will be weaker in cpu or gpu vs. consoles I think. Tough sell there. So in 2yrs of consoles life, someone will catch them and have a TON of software already out for them and getting better yearly. If the gpu on Intel gets REALLY good I will dump my NV stock immediately if they are matched in SOCS gpu power as I see this as the big growth part for anyone in it that is leading the gpu side. I really don't think Intel can catch NV in gpu (they've failed every attempt so far, i740, larrabee, drivers suck etc), but will watch VERY closely as any stock owner should.
If this is TLDR for anyone, I guess you don't own stock in any of these guys (amd, intc, nvda, qcom etc) 😉
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