If AMD goes bankrupt will INTEL have monopoly?

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spongebob

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If by bankrupt you mean insolvent, I agree, I wouldn't expect that (Chapter 7) any time soon. But the quartly losses continue and you add to that some stiff competition and a sagging economy,.. AMD damn well could go chapter 11. ATI does well, but not well enough to float the boat AFAIK.
 

drewnissan1

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first of all AMD has an aggrement with intel to use their front side bus architecture (x86) and that agreement states: if for any reason amd goes under or sells out.... that contract will be void thus making amd useless for x86 architecture chips most of their business even though ati is just now starting to become competitive again with nvidia....so unless amd has some sort of new style processor amd will be worthless and no one will want to buy it...if they do file for bankr. they will be forced to sell off all their manuf. sites which are worth billions but without them how will they make chips. and they already have less than 1/2 the fabs intel has....so if something doesnt go really great for amd we will be forced to go back to the pre amd all intel days when the next big processor bumps its speed by .0003 ghz.....and it cost as much as a car for one....can you imagine the kind of power they would have they already got apple on board so the only x86 you will be able to buy will be intel you all better be routing for amd not just us amd fans.....
 

doomsdaydave11

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I'm just going to nod my head and agree :)

 

wh3resmycar

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woah woah woah hold your horses cowboys... you see how well the 4800's perform? if AMD FUSION will integrate a 4870x2 performance inside it you wont be seeing AMD going bankrupt anytime soon, no way. not unless larrabee can be 100x faster than the current intel graphics offering.
 

MU_Engineer

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Holy cow, you and Baron are both back. Is JumpingJack and the rest of the gang coming back too?
 

dasickninja

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That's if AMD can survive till then. Right now they don't have enough to begin full scale production of 45nm which is going to be essential to their Fusion plans. And it is madness to expect ATi to carry the entire company, especially when AMD is spinning off parts of ATi.

@MU
No, I doubt that.
 

Just_An_Engineer

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It has been pretty widely reported over the past week that AMD has been distributing samples of 45nm processors and that the production models are expected to begin appearing in the 4th quarter so I don't see how you can say they don't have the resources to manufacture at 45nm.

The parts of ATI that are being spun off are the parts that are no longer profitable. One of the largest pieces was supplying hardware to Motorola for cell phones and was making lots of money when the Razer was the cool new phone everyone wanted a few years ago. Unfortunately sales of Motorola phones have plummeted over the last few years and as a result that division of ATI has taken a pounding.

Nobody expects that ATI will support the entire company and realistically it doesn't need to. Things aren't quite as bleak in the processor division as some people have been suggesting. According to the previews of the Deneb processors we have seen it appears that they will be very competitive with the products Intel curently has on the market Nehalem excluded. Since Intel will not be releasing the mainstream versions of Nehalem until late next year, it is plausible that AMD could become competitive again in the $300-$500 segment again with Deneb until the mainstream Nehalems arrive. Granted, that still isn't the most lucrative segment, but selling processors for $300 beats the heck out of selling them for >$200.

Given that ATI's sales look to be very strong this quarter and that there will likely be stronger sales in the laptop segment with the Puma platform I would say that there is a decent chance that AMD turns a profit in the third quarter. Obviously it's too early to tell just yet, but things aren't as dire as you're making them out to be.
 

yomamafor1

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I would really doubt AMD to achieve even break even point by the end of this year.

The key word here is not competitive. For AMD, its all about gross margin.

Yes, the 48xx series is good, and I'm really looking forward to get one. However AMD wants to fight this with performance/price, so they will likely push their price as low as possible. It will definitely not help AMD's finance.

Same with their CPUs. Sure, the 45nm Phenom will be competitive, but so will be Intel's Nehalem. At 300 bucks a processor, it will put a tremendous pressure on AMD, not to mention that Yorkfield will likely outrun Phenom as well. So similar with their GPU lineup, AMD will likely use performance/price as a selling point, which, again, not good for their finance.

Coming directly from a company CFO, after reviewing AMD's financial statement: Why are you even looking at this company?
 

radnor

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At 300 bucks a CPU there wont be much to press on AMD. Atm, i dont know if the Phenom 9950 is in that category.
 

yomamafor1

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Given that Nehalem is the new quad core architecture, 300 bucks is fairly low. But this also means one thing: all of the Yorkfield will likely be pushed around this price as well. I'm sure AMD will be very happy to know that instead Q9300, Q8xxx, Q6600 competing in the mid segment, they will have Q9450, or even Q9550.

On the other hand, like TC said before, if AMD cannot sell their top-binned CPU for a nice premium, how can they make money?
 

jimmysmitty

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^AMD would have been happy if they could have squeezed more IPC out of Phenom. With a Q9450 being the mid segment then that would be bad.

AMD making money anytime soon (on anything other than their GPUs) is not very likely unless they randomly get luck with Deneb. But that I doubt.
 

Just_An_Engineer

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Keep in mind that AMD's overhead is much smaller than Intel's while their cost of fabrication is nearly the same (Intel currently lower due to use of 45nm, but they should be pretty much equal when Deneb comes out at 45nm) so they can afford to sell at a lower price and still have a good profit margin. That being said, I don't think that a $200 price tag for their flagship processor is going to make much profit. If AMD can start selling processors in the $300-$500 bracket again, with the flagship processor going for around $500 then it will be a tremendous increase in margin.

The same argument can be made for ATI and Nvidia. ATI has less overhead than Nvidia by virtue of being a smaller company but actually has a much lower cost of fabrication due to the use of the 55nm process and smaller GPU's in general. ATI is likely making more profit per card than Nvidia despite being priced lower. Remember, Nvidia has been forced to cut the prices on their newer cards but thus far ATI has not had to make any significant price cuts.

I'm going to stick by my statement that IF Deneb is competitive with Yorkfield and IF ATI's sales remain strong, and IF the Puma laptop platform is a success AMD will post a profit before the end of the year. Now, that's three things that need to go right for AMD and there is certainly no guarantee that all of them (or any of them for that matter) will happen. This is strictly a hypothethical scenario.

It should also be noted that AMD will likely have some more staff reductions this year and will be jettisoning the former ATI divisions that were written down this past quarter, further reducing overhead.
 



Total agreement. AMD doesn't have to have the flagship $1,500 processor (although it certainly wouldn't hurt). Many ethusiasts, such as myself, aren't willing to spend more than $500. In fact, I typically don't spend more than $300 on a processor.

Phenom was just so underwhelming, between the lackluster performance and very little headroom, it really turned off many ethusiasts.
 


I'm going to be on vacation next week and wanted to be able to piss off fanboys without posting. The sig was the best I could do.
 

yomamafor1

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Actually not necessarily. Intel's cost of fabrication a chip is wholly lower than AMD's, partly due to the number of fabrication plants they have, and the superior technology they possess. According to industry insiders, Intel's 65nm yield is probably the highest in the industry, while they're already fabricating 45nm processors at very decent yield rate. With the second generation of 45nm fabrication technology coming online, the yield will only gets better.

On the other hand, AMD's 65nm is known to be inferior, and by using SOI at 45nm only exacerbates the problem. SOI is pretty much useless at this point for general purpose processors, and it only serves as a poor insulator against electron ionization. In addition to that, SOI also inhibits AMD processor from clocking higher than their Intel counterparts (just compare Intel 65nm vs. AMD 65nm).

Then, on the overhead side. Your theory is correct, but you also have no calculated the fact that Intel is selling their processors at a very nice premium (gross margin @ 55%), while AMD's is below satisfactory (36%). Not only that, Intel is also slowly eating away AMD's market share. So larger overhead? Yes, but Intel also makes a lot more money to cover that up, and then some, compared to AMD's small overhead, but doesn't make much money.

The same argument can be made for ATI and Nvidia. ATI has less overhead than Nvidia by virtue of being a smaller company but actually has a much lower cost of fabrication due to the use of the 55nm process and smaller GPU's in general. ATI is likely making more profit per card than Nvidia despite being priced lower. Remember, Nvidia has been forced to cut the prices on their newer cards but thus far ATI has not had to make any significant price cuts.
Again, you're forgetting to factor in the gross margin. When G80 launched, Nvidia was able to charge 3x the price for a product that costs about 150 bucks now. Same with G92. It is not until the launch of 48xx series where Nvidia realized they cannot compete until price drops.

Sure, smaller die and smaller process node does make a difference, but only when the performance is on par against Nvidia's larger die/larger process node. Even after 38xx series launch, ATi still cannot outperform 8800GT with a 3870, let alone 8800GTS, 9800GTX, and 9800GX2.

How will 48xx series do, we shall see. I really hope ATi can succeed this time, as I really like their new GPU line. I will support them whenever I can, but doesn't mean the market will.

I'm going to stick by my statement that IF Deneb is competitive with Yorkfield and IF ATI's sales remain strong, and IF the Puma laptop platform is a success AMD will post a profit before the end of the year. Now, that's three things that need to go right for AMD and there is certainly no guarantee that all of them (or any of them for that matter) will happen. This is strictly a hypothethical scenario.
To be honest, I fail to see the correlation between Deneb and ATI and Puma. Deneb is AMD's CPU division's brainchild, and so far it doesn't look good at all. Unless AMD can also offer a mobile version of Deneb (which I highly doubt) like Intel, Deneb will not affect ATI and Puma sales in anyway.

I agree that those three need to go right in order for AMD to survive. But we can pretty much conclude the Deneb will still be like Phenom vs. Yorkfield, which is being pushed towards the mid-end / mainstream market, where the margin isn't as rosy.

The 48xx series is going well so far, but I wonder what's the margin on the RV770s.

As for Puma, I'm not sure if it will go well, if at all. Puma, again, is largely based on performance / price. The OEM I work at will only launch 1 line of Puma, compared to....about 12 lines of Centrino 2s and Centrino. I'm sure others will be very similar.


They're also significantly reducing their capital spending. If they're reducing their CapEx, how can they support the development of Bulldozer? Fusion? Torrenza? According to industry insider, it appears that AMD is putting all the egg into the 45nm Deneb basket. If AMD cannot at least attract a decent portion of the market, its very likely that AMD will be forced to file Chapter 11.

Its not all about overhead and performance/price, but rather gross margin and capital expenditure, and a good management team. At the moment I don't know what Dirk will do to save AMD, but Hector really screwed up, big time.
 

pwinter

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If you think Intel would not raise prices if AMD were out of the picture, you're incredibly naive. Would they raise prices to $10,000 per top end CPU? Probably not that high. But they would definitely charge whatever the market would bare. Any why shouldn't they? That's the nature of a free market.

If you think that Intel would not have a monopoly if AMD were gone, you don't understand the market. Yes, there are other companies making processors but no one really "competes" in the PC market like Intel and AMD (who is a distant 2nd).
 



Very fair statements.

However, I think that AMD is not have as great of an impact on "innovation" and pricing as they have had in the past. Their top binning parts are only $200 and they don't exactly have Intel too worried at the moment. That means that Intel will be able to sit back and not invest as much in R&D.

AMD is very needed in the market, but in their present condition they're not doing as much as they could be.
 

Reynod

Administrator
Your kidding right?

Most of the innovation in the cpu market has been as a direct result of AMD ... whether their innovative product or Intel's response to AMD's innovation.

The innovation in the GPU parket is due to (a lot who died along the way) and in the last 5 or so years NVidia and ATI (AMD).

Starting to see a picture here??

I could throw the huge list up again for you to nit pick at it ... but the fact remains we are enjoying decent processing power and graphics power largely due to the competition created by AMD and NVidia innovation.

If Intel were just on their own we would all still be driving PII-550's in Slot 1 boxes on crappy Intel chipsets. The last 5 years would have seen the P3 cpu increased my 10Mhz in clock speed every 6 months ... at best.

The Intel fans should respect AMD and NV for the hard work to push the Intel giant out of its slumber and respond with some decent products.

Spin my statements any way you wish but they are essentially true.

 

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