QUOTE AND NEWS
Motley Fool  1 hr ago  Comment 
Until such time comes that the company is able to achieve double digit sequential quarterly growth, chances are that balance sheet repair will not happen fast enough and the market will continue to be reluctant with AMD shares
Motley Fool  Jul 23  Comment 
AMD bet its future on its semi-custom business, hoping to parlay its game console design wins into new business. But, can it provide the kind of growth that investors are hoping for?
Motley Fool  Jul 23  Comment 
AMD's CPU revenue collapsed during the second quarter, with Intel stealing away market share. But there was a bright spot.
Motley Fool  Jul 22  Comment 
Post-earnings, it's clear that Advanced Micro Devices is in a tough spot.
Motley Fool  Jul 22  Comment 
Advanced Micro Devices recently saw its PC chip shipments drop 20% year over year. Can the chip maker recover market share?
Motley Fool  Jul 22  Comment 
As AMD struggles in key segments of the PC market and sees its visual chip business peak, should investors buy at the bottom in hopes of a value opportunity?
TheStreet.com  Jul 22  Comment 
NEW YORK (TheStreet) -- Advanced Micro Devices  recovered slightly on Tuesday after NetNames opened a data center based on AMD's server technology. NetNames, a European leader in online brand protection and digital asset management, based the...
MarketWatch  Jul 22  Comment 
The chip maker’s move away from PCs is taking longer than anticipated, writes Therese Poletti.
SeekingAlpha  Jul 22  Comment 
By Sean Chandler: Introduction AMD (NYSE:AMD) recently posted the results of its second quarter earnings and missed expectations while posting an unfavorable outlook. Investors were very displeased and sent shares down by more than 16% on...
TheStreet.com  Jul 21  Comment 
NEW YORK (TheStreet) -- Advanced Micro Devices  continued to fall Monday after last week's modest second-quarter earnings report and lower-than-expected guidance. The semiconductor company reported earnings of 2 cents a share, a penny less than...




 

This article refers to the semiconductor manufacturer. For the Armenian dram, see Armenian Dram (AMD)

Advanced Micro Devices (NYSE: AMD) is a leading semiconductor producer that makes microprocessors for a variety of computing products, including personal desktop and notebook computers, servers, gaming consoles, and other consumer electronics. Along with market leader Intel, AMD dominates the semiconductor space.[1]


Company Overview

AMD has split from being a chip designer and semiconductor foundry into just a chip designer when it spun off its manufacturing business.

Products

  • Microprocessors: Essentially the brain of a computer, these products are found in all personal computers. AMD produces both single- and dual-core processors, which run both 32- and 64-bit computing.[2]
    • Servers and Workstations: The single- and dual-core Opteron processors are AMD's server and workstation microprocessing units, similar to their standard microprocessor cousins but made for larger computing projects including business processing (supply chain management, for instance), engineering and web servers.
  • Embedded Products: These are processors that are designed for devices in non-PC/computer markets. These products are made to meet particular consumer needs that may be outside the scope of PC processor units, like significantly smaller size, higher mobility, or tolerance of harsh environments.[3]
  • Graphic & Chipset Products: These enhance a computer's graphics capabilities, and can be either stand-alone graphic cards or chipsets that are integrated into motherboards. These products are used in systems designed for gaming or high-level graphic display.[4]
  • Memory Products: Until its IPO in October 2006, Spansion was a subsidiary of AMD that produced and sold flash memory products. Since its sale, AMD has discontinued its production and sale of flash memory products.[5]
  • Consumer Electronics: This segment includes processors for gaming consoles, digital televisions and handheld devices. These processors are specialized to fit the needs of a given product line. AMD's processors can be found in Microsoft's Xbox 360, the Nintendo Wii and Nintendo GameCube gaming consoles. (See Game Consoles Wars: Xbox 360 vs. PS3 vs. Wii.)[6]
  • Computers: AMD has announced their first computer brand named AMD Business Class. The company would develop and design these machines in collaboration with partners like Dell. These desktops would be followed by a range of new laptop products likely to be sold by companies like Acer, Dell, Fujitsu-Siemens, Hewlett-Packard and Lenovo. They will be targeted at the small- and medium-size business market, but would also meet the demands of the biggest corporate clients as well.[7]

Customers

  • Original Equipment Manufacturers (OEMs) and Original Design Manufacturers (ODMs) are companies that produce computers, handheld devices, and telecommunications and network communications products, and who are among ADM's chief customers. The products that these manufacturers produce rely on the processors that AMD makes.[8]
  • Third Party Distributors:AMD also sells its products to companies that distribute to smaller OEMs and ODMs.[9]

Industry Metrics

Process Technology and Architecture

  • Process Technology: this is the technology used in creating microprocessors. AMD's 65nm process technology is considered to be superior to Intel's, but Intel went one step further than AMD when it announced its new 45nm process technology. These numbers (65nm, 45nm) refer to the thickness of the insulation on the transistors inside the microprocessors--with thinner insulation, the density of circuits on a processor can be increased, so processors can be made both smaller and more powerful. Intel's 45nm processor was introduced in early November, while AMD is introducing its own around six months after.
  • Architecture: architecture refers to the chip design--how many individual processors can be crammed into one single chip. How the chip functions depends on its architecture, and changes in architectural design usually stem from attempts to create more efficient or more powerful processors. Currently, AMD uses both single-core and multi-core architecture for its processors.

Performance Metrics

Microprocessors are typically rated on a number of characteristics that measure their performance. These measurements are the most important factors for determining the success of a specific line of products, and as such they are the focusing points for creators of these chips. Some lines of chips will focus more on one factor than another in an attempt to predict what the market prefers (i.e. faster chips vs. more energy efficient chips, etc.)

  • Number of cores: Modern CPUs are multicores which means it has two or more processing units operating in parallel. The number of cores, clock speed, the number of threads each core can process in paralell, the cache and memory architecture deterimine the speed of the processor.
  • Clock Speed: Microprocessor speed is an indicator of how powerful the product is. In this ultra-competitive industry, Intel and AMD compete to produce the faster processor, even if the difference is very minimal. While clock speed is not the only performance factor that determines how good a processor is, it certainly plays a significant role.
  • Power Usage: processors that can provide the same computing power while using less energy are more efficient and more valuable. Here too, AMD and Intel race to create the most power-desirable chips.
  • Performance Per Watt: This measures the computing power of a microprocessor per single watt of energy consumed. AMD's performance-per-watt focused processor is more appealing to the server market than Intel's clock-speed-focused processor because of the significant difference in power usage. AMD's was much more energy-efficient, lowering energy bills for products using its chips.

Business Growth

FY 2010 (ended December 25, 2010)[10]

  • Net revenue increased 20% to $6.49 billion.
  • Net income increased 28% to $848 million.

Trends and Forces

I'd venture that this atilrce has saved me more time than any other.

Declining PC Sales Decrease Product Demand

The demand for products that use AMD's processors is a significant factor in the success of AMD. Demand for computers has been decreasing growth since the mid 1990s, and as a result, microprocessing companies have seen decreasing growth in profits.

New Platform Technology Business

With the acquisition of ATI Technologies in October 2006, AMD was able to begin supplying 3D graphics, video and multimedia products for all types of computers, as well as products for consumer electronics. Before this acquisition AMD was unable to compete with Intel in platform technologies. AMD has developed a notebook platform, called Puma. This platform is designed to be compatible with consumer, business, and high end notebooks, making it a very attractive platform for OEM's. The high end graphics provided by ATI gives AMD's platform a significant advantage over Intel's competing platforms.[11] However, this advantage comes partly from the fact that Intel has had problems with the graphics aspect of its platform, known as Montevina. If Intel can get this chip working then the competition for AMD would increase.

Competition

AMD competes directly with Intel (INTC). Intel has been in the microprocessor industry longer than AMD and has a significant lead in market share, but AMD has been able to gain some of this market share.

With the acquisition of ATI Technologies, AMD hoped to increase its ability to compete with Intel on all levels. However, with the loss of Spansion, AMD's flash memory subsidiary, there are even more areas in which Intel has the outright advantage.

Intel has an enormous amount of power in the microprocessing industry and as a result is able to leverage its market share to gain more customers. This has been a difficult obstacle for AMD to overcome in the past. However, AMD does boast a reputation for better service, making it popular among certain groups of consumers. Lower price points also make certain AMD products preferable to Intel's equivalents. But these recent price wars between the two competing firms have proven to be costly for AMD. Because Intel is so much larger than AMD, it is able to cut costs more effectively and as a result the losses in profit margins (from price cuts) does not affect Intel as severely.

There is another market where AMD has yet to develop a processor. Greater demand for mobility drove the increase in notebook popularity, and now that trend has sparked the rise of netbooks (aka Mobile Internet Devices, or MID's). Intel has released its Atom processors for this market and NVIDIA has released a competing processor called the Tegra. AMD is currently developing a competitor by the name of Ontario.

In the graphics chips world, the major competitors are Intel and Nvidia. AMD's Radeon line of graphics processors have turned out to be better than expected and are delivering stiff competition to Nvidia in the high end market. AMD executed a differentiating strategy for its high end graphics cards by developing mid range chips but then bundling those chips into its high end graphics cards.[12] Nvidia, on the other hand, generally develops a high end chip and then move that chip down the value chain over time. Intel currently only sells low end graphics chips. AMD's strategy poses possible execution problems over time because it requires advanced inter processor communications, but the design is able to dramatically decrease power consumption.[13] AMD has a dual processor graphics card, named the HD 4870 X2. The card is aimed at gaming customers and is capable of 2.4 trillion operations per second. [14] This card marks an important step in gaining market share from leading graphics producer Nvidia.[15]

References

  1. AMD 2008 10-K pg. 2  
  2. Annual Report 2008 Part 1
  3. Annual Report 2008 Part 1
  4. Annual Report 2008 Part 1
  5. AMD Annual Report 2008 Part 1
  6. Annual Report 2008 Part 1
  7. AMD Business Class desktop personal computers launched - April 28, 2008
  8. Annual Report 2008 Part 1
  9. Annual Report 2008 Part 1
  10. AMD 2010 10-K
  11. AMD shakes PC Notebook Status Quo
  12. Nvidia: Intensifying Competition and Execution Challenges
  13. Nvidia: Intensifying Competition and Execution Challenges
  14. Informationweek.com, AMD Unveils Latest Dual-Chip Graphics Card
  15. Bloomberg.com, Nvidia has first loss in 6 years, Buyback lifts stock
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki