As AMD fetes chip milestone, analysts fret about future
Updated at 11:10 a.m. PDT: adding Walmart dv2 laptop information.
Concerns about Advanced Micro Devices' future are being aired as the company celebrates a chip milestone.
HP Pavilion dv2 packs a low-power AMD chip. Can AMD compete effectively with Intel-based ultra-thins?
(Credit: Hewlett-Packard)The chipmaker said Wednesday that it has shipped 500 million x86 (Intel-compatible) processors since the company's founding in 1969. And to celebrate, AMD is giving away four Hewlett-Packard dv2 ultra-thin notebooks based on its low-power Athlon Neo X2 chip. But the laptop giveaway, ironically, underscores one of AMD's challenges.
Doug Freedman, analyst at Broadpoint AmTech, said in a research note earlier this week that the dv2 laptop has "failed to ramp," meaning it has not gained much traction in the market. Best Buy, for example, though offering a range of other HP dv series laptop models, has not offered the dv2 to date. (Update: However, Walmart offers the dv2 laptop.)
But Freedman's comments are mild compared to what some other analysts are saying after AMD posted disappointing financial results Tuesday.
A blog on ZDNet Wednesday cited a few of the most negative comments. "AMD's tepid top-line results/guidance and weak margins suggest continued execution issues and potential share loss," said Goldman Sachs analyst James Covello.
And J.P. Morgan analyst Christopher Danely said: "We believe AMD is losing share to Intel due to inferior products and is being hurt by lack of a Netbook processor...We would note Intel processor sales outgrew AMD by 13 percent during 2Q09 and are expected to outgrow AMD by another 3 percent during 3Q09."
And, as the ZDNet blog points out, maybe the most damning comments come from JMP Securities Alex Gauna: "Another disappointing quarter from the perennial CPU also-ran," he said, referring to AMD's business of making central processing units (CPUs).
Gauna added that ARM chip technology may make AMD even less competitive down the road as future devices adopt these chips. ARM is a low-power chip design used by Qualcomm, Texas Instruments, Apple, Samsung, and others.
Of course AMD doesn't see it this way. Dirk Meyer, AMD's president and CEO, said in a statement Tuesday that "new platform, microprocessor, and graphics introductions planned for the second half of 2009 position us well to improve (profit) margins and meet our financial goals for the year."
AMD also said Tuesday that during the second quarter Dell, HP, IBM and Sun Microsystems announced new servers based on the six-core AMD Opteron processor and that the ATI graphics unit introduced the first 40-nanometer desktop graphics processor, the first 1GHz graphics chip during the quarter, and held the first public preview of working silicon and drivers supporting Microsoft's upcoming DirectX 11 technology featured in Windows 7.
Brooke Crothers has served as an editor at large at CNET News, an editor at Dow Jones' Asian Wall Street Journal Weekly, and a senior editor at InfoWorld. His CNET blog covers chip technology and computer systems, and how they define the computing experience. He also contributes to The New York Times' Bits and Technology sections. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. Follow Brooke on Twitter @mbrookec. 
buys gas and send the money the Middle east...
They have NOTHING to answer Intel on the low end (Netbooks), Laptops (Intel Centrino), high end (i7 based Nehalem), servers (Nehalem), ultra thin laptops, etc.
Kinda sad really.
Cody
I might remind you of the "Intel of past" that was force-feeding us RAMBUS memory as the only memory option to the Socket 478 P4, which in itself was trash as cycle for cycle the PIII architecture beat it everytime. That is why AMD stuck with it, expanded it to a 32/64 bit chip while Intel refused to do so since they were "force-feeding" the Itanic as their one and only 64 bit platform. It was only after the Athlon64 started taking market share away despite Intel's "poison Pill" marketing which has been declared an abuse of their monopoly by telling OEMs that if they offered AMD products that they might find it hard to get their Intel orders. So far many countries have found Intel guilty with damning evidence.
The EU being the latest, Now Intel is saying that the EU is denying their human rights. The last time I checked a corporation had no Human Rights.
AMD spun off their foundries and is putting much more into R&D and it is paying off.
Don't write off AMD yet. It was only after Otellini took the reigns that intel finally right-ship, backed off the P4 and started back with the PIII again in the form of low voltage laptop platforms thanks to their Israeli team and spun that up to the Core 2 series.
Had Intel not paid the likes of Dell upwards of a million a year to avoid AMD while AMD had the superior product AMD would be doing much better. Intel are crooks and always will be.
- by teac77 July 26, 2009 11:08 PM PDT
- I don't believe AMD needs any "surgical bankruptcy" at all. AMD produces processors for the Nintendo Wii (CPU and GPU). They earn money on every Wii sold.
- Like this Reply to this comment
-
(8 Comments)It's disappointing that Brooke Crothers fails to point this out.