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[Anand, TH] AMD Q3 2012 Earnings: $157M Loss; 15% of Workforce To Be Cut

post #1 of 195
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Quote:
For Q3 of 2012 AMD reported $1.27B in revenue, with a net loss of $157M. Unfortunately for AMD (but not unexpected) this is a significant drop in both revenue and net income on both a quarterly and yearly basis, having furthermore pushed AMD back into the red after turning a slight profit in Q2. Compared to AMD’s Q3 2011 results, revenue is down approximately $420M, a nearly 25% drop; net income meanwhile swung from positive $97M to negative $157M, a shift of nearly $250M. Finally, AMD’s gross margin was an abysmal 31%, well below last year’s gross margin of 45%, which is generally where AMD needs to be to turn any kind of profit.

Source: AnandTech article.


Quote:
Reads idea is to be less vulnerable to those problems, especially because he does not believe that the PC market will return to normal growth for "several quarters". As a result, he is not only reducing AMD's cost, he is also moving away from the PC market as a whole. "40 to 50 percent" of AMD's future business will not be focused on PCs. Instead, he will aim half of AMD's business three areas: At servers, which will leverage AMD's own CPUs, "third-party" CPUs, and will count on SeaMicro's server fabric to provide custom solutions. Another area will be "semi-custom" APUs for the gaming, industrial and communications market and AMD will be aiming its APUs at ultramobile devices. Despite the reduced headcount, Read believes this is possible by reusing its technology across more platforms and by simplifying product development cycles.

Will it work? Your guess is as good as any, but Read says that his recipe will work by Q3 2013. So, he has given himself and the new AMD about a year. If it does not work, AMD will have run out of money and confidence - and potentially beyond repair.

Source: Tom's Hardware article.


Let's hope it works. Charlie over at SemiAccurate doesn't believe it will, but it would be sad to see competition go away for a while (I'm sure somebody would buy AMD and continue the project, they have valuable assets).
Edited by tpi2007 - 10/19/12 at 2:47am
 
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post #2 of 195

Ouch.

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post #3 of 195
This is not good. I really hope AMD makes it!
post #4 of 195
But none of us server guys want your server gear, AMD?

Sure, there are some niche applications, but they're ridiculously expensive and they have their ass whipped by Xeon so....
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post #5 of 195
Not going to lie, none of that plan sounds good to me. They've been woeful in the server market, the best they've accomplished is selling designs in the console segment, and they don't have the process tech/right architecture to compete in the ultramobile segment.
post #6 of 195
Aren't all the new gaming systems from Sony, Nintendo, and Microsoft(?) going to use APU's?? what impact will this have on AMD?
post #7 of 195
AMD is screwed. They've settled down in a little niche that will shortly be crushed by ARM and friends from the bottom, and Intel from the top.
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post #8 of 195
how about just make gpus. Its the only thing they are good at and they wont even mention it.
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post #9 of 195
I may not be an AMD fan, but I would hate to see them go under. Intel and Nvidia need some competition to keep them on their toes.
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post #10 of 195

I hope they sell ATI before they go under

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