Ad
News

PC market on track in 2007, says iSuppli

Published on July 27, 2007

At just beyond the mid-year point in 2007, all signs point to the PC market attaining iSuppli’s annual forecast of 11.2% growth in unit shipments. Notebooks have been a key driver, but shipments of desktop PCs have shown encouraging signs of improvement Read more

Intel profit up 15 percent

Published on October 13, 2004

Intel on Tuesday reported a 15 percent rise in quarterly profit on an improved personal computer business, and gave an outlook that helped reassure jittery investors it could grow despite tough market conditions. Read more

Federal report warns of RFID misuses

Published on May 29, 2005

In a report published Friday, the Government Accountability Office said that 13 of the largest federal agencies are already using RFID or plan to use it. Read more

IBM net profit rises in Q4

Published on January 19, 2005

IBM today posted a quarterly net profit that beat Wall Street's recently raised profit target, as solid year-end product sales were buoyed by a weaker U.S. Read more

Last Reviews & Articles
System Builder Marathon: Performance and Value

System Builder Marathon: Performance and Value

Published on October 31, 2008

Three dramatically different builds face off in show of performance, defining the real value of each. Our mainstream system is designed to meet the needs of most users. Who should spend more and who can live with less? Read more

System Builder Marathon: $500 Gaming PC

System Builder Marathon: $500 Gaming PC

Published on October 30, 2008

On this, the second to last day of our System Builder Marathon series, we add a $500 gaming PC to the mix. It's not going to be as quick as our other two builds, but we think Paul was able to get some serious value from this thing. Read more

Tom's SBM: The $1,500 Mainstream PC

Tom's SBM: The $1,500 Mainstream PC

Published on October 29, 2008

We're following up yesterday's $4,500 behemoth with a more affordable $1,500 mid-range build. Let's see what sort of performance (and overclocking headroom) you can get when you spend one third of the money. Read more

System Builder Marathon: The $4,500 Super PC

System Builder Marathon: The $4,500 Super PC

Published on October 28, 2008

This month's System Builder Marathon spreads the system prices out even further to $4,500, $1,500, and $500. Is today’s $4,500 system really worth three times as much as an upper-mainstream performance machine? Read more

All the Reviews & Articles
Relatives contents
  Tom's Hardware UK and Ireland Forums » CPU & Components » CPUs » AMD on track to report a profit for Q3
 

AMD on track to report a profit for Q3

Advanced Search

There are 286 identified and unidentified users. To see the list of identified users, Click here
Add a reply



Word :   Username :  
 
Bottom
Author
 Thread : AMD on track to report a profit for Q3
 
azza21
Profile: stranger
More Information
n°1851817
08-18-2008 at 11:43:39 PM

Just came across this bit of news, apparently AMD have found a friend in the name of "JSC Angstrem", who...you may ask. Well the article tells all, but its nice to see AMD heading in the right direction all be it with a little bit help from our Russian friends :)

Quote :

Remember AMD’s promise to return to profitability in the third quarter of this year? You may be wondering how this will be possible considering the fact that the company has lost money eight over the past seven quarters, including $269 million in Q2 2008, and no big bucks advances against Intel are in sight. But we are certain that AMD in fact will report a huge profit for the third quarter that may not originate from hugely increased product sales, but will create the foundation for the much anticipated announcement of AMD’s “Asset Smart”.

There has been much talk about AMD’s return into the black over the past seven quarters, which, in aggregate, brought AMD losses of $5.14 billion (including charges). AMD’s numbers became somewhat predictable, if we followed analyst CPU sales forecasts and the company’s claims that it would need at least $2.0 billion in revenue per quarter to return a profit. Cost reductions including layoffs recently took that number down into the $1.6 - $1.7 billion range and AMD plans to cut the requirement to close to $1.5 billion in order to be able to break even.

And even that may be a bit optimistic at the time, as the company brought in only $1.3 billion in Q2, but $1.5 billion in Q1. But a breakeven is a generally believed requirement for the company to announce “Assert Smart”, a move that is expected to split AMD into a manufacturing company and a fabless chip development firm. While production numbers of the quad-core Opteron are improving and the ATI has delivered a fantastic graphics chip, there is at least some doubt that regular sales would allow AMD to become profitable again in Q3, especially if we consider the aggressive pricing of Phenom processors and our own impression that the company’s latest Puma platform is showing up in far less Back-to-school notebooks than we would have expected.

And still, there is little doubt that AMD in fact will announce a profit for Q3.

Why? Simple: AMD has just sold its 200 mm wafer equipment to JSC Angstrem, a Russian semiconductor manufacturer. Earlier this year, JSC Angstrem bought 130 nm CMOS equipment from Fab 30 in Dresden for about $190 million. With this part of the deal, JSC has all of the components to start manufacturing computer chips.

There is some doubt about how much money changed hands during the deal and AMD Europe declined to release any numbers. But JSC Angstrem did. CEO Anatoly Soukhaparov told German newspaper SZ-Online that the company recently received a 815 million Euro loan, the “majority” of which is spent on the AMD manufacturing equipment as well as AMD CMOS technology that was developed in Dresden, Germany. We leave it up to you to guess what “majority” really means, but 815 million Euros translate into $1.2 billion at the current exchange rate. This would mean that AMD will get at least $600 million, $190 million of which have been accounted for in AMD’s Q2 result. That leaves potentially more than $400 million for Q3.

We generally would expect AMD’s revenue to seasonally improve from Q3 and the loss from continuing operations to decline, which leaves AMD with lots of room to return into the black for Q3.

According to Soukhaparov, Angstrem plans to start manufacturing chips in late 2009. It seems that the idea is to create a Russian version of Silicon Valley. Zelenograd, by the way, translates to “Green city”.


Angstrem is expected to produce Bluetooth, USB, Wi-Fi and similar controller chips, which is seen as way to collect experience and knowledge in modern chip manufacturing. However, the deal between AMD and JSC Angstrem is not done. Soukhaparov also stated that the company is negotiating with the U.S. and EU governments to win approvals to import 90 nm processing technology as well. The executive expects that the 90nm deal could close in couple of years and AMD will continue to supply JSC Angstrem with 90nm equipment from Fab 36, resulting in additional revenues for AMD.

It appears that AMD will be spending the windfall on its Fab30-to-38 conversion, which will turn AMD's Fab30 into a 45 nm 300 mm Fab from the current 90nm 200mm facility.

Some may call this sale of manufacturing equipment to achieve profitability cheating and it is certainly not the type of profitability we would have expected when CEO Hector Ruiz promised that the company would return a profit in Q3. But if it is necessary for the company to stand up again and follow through with its “Asset Smart” plan, that that is fine with us.



http://www.tgdaily.com/content/view/38940/118/

Related Product

Register or log in to remove.

yomamafor1
Profile: Honorary Poster
More Information
n°1851993
08-19-2008 at 07:53:27 AM

Quote :

By Theo Valich



Enough said.

Message quoted 1 times

---------------
http://i62.photobucket.com/albums/h82/TXSuperFly03/478x88copy.png
MarkG
Profile: addict
More Information
n°1851995
08-19-2008 at 08:00:00 AM

Well, duh; anyone can create a profitable quarter by selling off chunks of the company. But which part are they going to sell off next quarter?

epsilon84
Profile: Honorary Poster
More Information
n°1852004
08-19-2008 at 09:40:51 AM

I'm no financial expert, but I'm pretty sure theres a difference between operating profit and net profit due to one time sales of company assets.

AMD is still operating in the red as far as I can tell, selling off assets will help stem the cash bleed in the short term but they still need to get back to operational profit in the long run to remain fiscally viable.

Message quoted 1 times
jaydeejohn
Thing about common sense is, it aint so common
Profile: Forum Fixture
More Information
n°1852037
08-19-2008 at 01:08:16 PM

Thats true. But their margins are set to improve. The ATI branch will go into the black, and once they get into 45nm, itll help immensely. This isnt a situation where theyre hurt at all from this. Its not like theyre going to use a bunch of skt 939s and make a graphics card on old tech. This is wise, and surely helps them. And may I ask anyone opposed to that, why is this bad? As for misleading, we will see when the numbers come out. There certainly are some haters here.


---------------
Every artist is a cannibal,every poet is a thief,they all kill their inspiration then sing about their grief
Amiga500
Profile: addict
More Information
n°1852042
08-19-2008 at 01:56:52 PM

yomamafor1 wrote :

Quote :

By Theo Valich



Enough said.



Indeed.

The boy who cried wolf...


again, and again, and again.



jaydeejohn
Thing about common sense is, it aint so common
Profile: Forum Fixture
More Information
n°1852047
08-19-2008 at 02:06:38 PM

May be true , may not be. The extra 400 million may show up yet. At 45nm, at least AMD has a few things going for it. Ive heard the improvements are anywheres from 7 to 12% with Deneb. Itll oc better, and the most important is, itll cost much less to fab. This allows for a lil more competition in perf, and pricing. So, if true, this may allow AMD a lil more needed time to get the real numbers into the black


---------------
Every artist is a cannibal,every poet is a thief,they all kill their inspiration then sing about their grief
Scotteq
Plays with his WEI
Profile: Honorary Poster
More Information
n°1852052
08-19-2008 at 02:20:32 PM

In case anyone needs a hint: You generate profits by successfully selling product to end users at a price that puts cash in your own pocket. NOT by selling off chunks of your company and by playing a restructuring shell-game.

Thanks in advance for all the down ratings I'm about to get for daring to question AMD.

Message quoted 1 times

---------------
The more I read the forums, the more I feel that a number of individuals would be well served by skipping their next GPU purchase in favor of a little "Stress relief" from the local 'Working Girls'"
jaydeejohn
Thing about common sense is, it aint so common
Profile: Forum Fixture
More Information
n°1852057
08-19-2008 at 02:29:53 PM

If the chunks are obsolete, then why not? Thats my point. Maybe they could somehow come up with a way to put them to good use? Any ideas?

Message quoted 2 times

---------------
Every artist is a cannibal,every poet is a thief,they all kill their inspiration then sing about their grief
itadakimasu
Profile: enthusiast
More Information
n°1852062
08-19-2008 at 02:33:24 PM

i think they're strong w\ ati.... if etrade releases my money to use before amd stock is $6 or more i'm going to buy some...

i've already sent them a few semi-nasty emails letting them know how unhappy i am w\ them, my next is going to be asking if they're going to credit me for the price difference in the stock from my intended purchase date last week and when they are saying i can use my money (the 21's) even though the bank transaction took a few days and was complete last week.

Scotteq
Plays with his WEI
Profile: Honorary Poster
More Information
n°1852065
08-19-2008 at 02:43:37 PM

jaydeejohn wrote :

If the chunks are obsolete, then why not? Thats my point. Maybe they could somehow come up with a way to put them to good use? Any ideas?




If the article is to be believed at all, the answer is clear and is already a done deal: Sell it to **** people into thinking AMD actually delivered a profit.

Quote from the article, on the off chance someone chooses to not read that part because it doesn't jibe with their current views of the world: "But we are certain that AMD in fact will report a huge profit for the third quarter that may not originate from hugely increased product sales..."


Argue technology all day, if you guys want. But from a BUSINESS perspective, you have widespread layoffs in the name of cost cutting, executives leaving the company, and now they're selling off assets and claiming "profits" with the proceeds. And doing so in the face of a massive restructuring.

If anyone is investing in AMD - Watch the next quarterly very closely. Inventories had better be down. That is a sure way to tell if they're moving product. If they're up? Sell.

Message quoted 1 times
Message edited by Scotteq on 08-19-2008 at 02:44:09 PM

---------------
The more I read the forums, the more I feel that a number of individuals would be well served by skipping their next GPU purchase in favor of a little "Stress relief" from the local 'Working Girls'"
jaydeejohn
Thing about common sense is, it aint so common
Profile: Forum Fixture
More Information
n°1852070
08-19-2008 at 02:53:32 PM

Thats true, every point. My responses were to comments of this as being a negative, when in fact, it is a positive. No spinning, just 400 million reasons to like this. If AMD doesnt get off their arse and make some cpus that sell, itll continue, but each and every step they take is magnified because of their current situation. If it turns out to be making 600 million dollars on selling obsolete material, all the better for them. If they dont right their ship, itll surely , eventually go down. But for now, this transaction, is good news. Win win. Layoffs, etc is bad, execs dont actually make the products, and some may have been bad for the companby and are welcome to have left. Depends how you look at it too. This is a positive, and should be seen as such. As far as profit margins, leave that up to the author, the reader, and business practices.


---------------
Every artist is a cannibal,every poet is a thief,they all kill their inspiration then sing about their grief
jimmysmitty
Profile: Ancient Poster
More Information
n°1852078
08-19-2008 at 03:25:25 PM

They have said this before. Either way I would think the bulk of their income is from their ATI division due to the 4800 series actually doing very well.


---------------
http://valid.x86-secret.com/cache/banner/381014.png
http://www.alabasterslim.com/0/jimmysmitty.png
MarkG
Profile: addict
More Information
n°1852082
08-19-2008 at 03:28:50 PM

jaydeejohn wrote :

If the chunks are obsolete, then why not?



If it's obsolete, why is someone paying hundreds of millions of dollars to buy it?

Either the buyer is stupid, or AMD could have had a continuing revenue stream by manufacturing the chips that the buyer is now going to make itself. And helping start 'a Russian version of Silicon Valley' could be really bad for AMD in the long term if it actually comes about.

Message quoted 1 times