May 8, 2008
AMD turns away from Intel fight
Advanced Micro Devices’s annual meeting today was a surprisingly placid affair, considering its share price has nearly halved in value over the past year.
Existing directors were re-elected without a murmur and there was only one question from the floor: a stockholder asking if AMD would consider sponsoring golf tournaments.
Hector Ruiz, chief executive, is under more pressure from analysts, questioning whether AMD can continue in its present form and whether it can return to profitability this year after six consecutive quarters of losses.
The stock is up 13 per cent in the past week on analyst speculation that AMD could be split into two - a manufacturing business and a chip design and development one.
Mr Ruiz said progress was being made towards an “an asset-smart strategy” and he would give an update on this “complex undertaking…in the very near future.”
He said AMD would spend only $900m in capital expenditure in 2008, it was cutting its workforce by 10 per cent and this reduction in expenses would bring down the break-even point by hundreds of millions of dollars, making him confident of a return to profitability in the second half.
AMD would do fewer things better, he said, and get out of non-core businesses that did not have “a clear path to profitability.”
Production problems with its quad-core “Barcelona” family of processors were now behind it, he added, and AMD was on course to begin quad-core production on chips with more economic 45-nanometre circuit widths in the second half - about a year behind Intel.
His most intriguing comment on the battle with Intel was: “We are re-architecting the business so that our financial success is not invariably dependent on continued component performance leadership over a rich and dominant competitor.”
That is as close as AMD is likely to come to admitting defeat, having gone toe-to-toe in recent years with Intel, exchanging processor-advance punches.
Intel now appears to have a decisive lead in the x86 processor market that the two dominate. Mr Ruiz is suggesting his company will focus on expanding in other areas such as graphics chips or targeting specific segments such as processors for small businesses, in order to grow its own business in the future.
Good for AMD ,its workers and its stockholders !
but the questions about market monopoly and exclusive deals by Intel is still there…we are going into fast Wimax-WiFi-LTE territory, and Intel will try again to block out AMD,or shall we wait for the Tooth Fairy ?
also Icahn trying to corner Motorola when this company had or has interests in Clearwire is scary, for USA consumers, we know that Icahn and Comcast are a number together, and it ain’t Santa Clauses brothers,for consumers is not good…
there are great news out there but its not clear…also the tools for the new generations , the kids , are they the right creative tools ? do they make for better citizens? inventors? for more growth and trade? for more communications? for more real progress? for more strong constitutional taxpayers? which country and which language will offer better creative tools ? the new intelligent web traveler ?
the web is still not delivering its full human potential,not yet,we need more.
Posted by: blogger | May 9th, 2008 at 8:58 pm | Report this comment