- Oper
- Q3: No XBox shipments. So they'd need $70M just to stay flat.
- Significant growth expected in GPU and MCP business in Q3
- Overall, expectation is flat t
- This means 15% quarter-to-quarter
- Gross margins between 37 and 38% expected for Q3, but hard to forecast. Still conformtable in that range.
- For Q3, operating expenses are likely to increase
- Growth drivers in Q3:
1) GF7 Family ramp.
2) High-end leadership halo effect.
3) As PCI-E continues to gain share, they expect
4) Ramping new nForce MCP with integrated GPU (first in over 2 years)
5) Design wins for the holiday season already secured.
6) Sony PS3/PS3 Compatible (PS4 etc.) license. Software license money coming partially in Q3 (? not sure to have heard right ?)
- Expected strong growth in chipsets (numbers for 2009, didn't hear)
- Requoted mobile phone game numbers for the next few years
Q&A
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- We are anticipating to ship a high number of 7800s where the margins are high (!)
- 6600s are good margin products (didn't hear if 6200 too)
- Competitive pressure, but right now there's the halo effect of the GF7 high-end
- Hoping for the halo effect to have an effect on GF6 (6200) sales too
- Few minutes of hyping up SM3.0, and the pressure it puts on the competition
- It is expected that in Q2, customers buy in the last part of the quarter.
- Seeing that customers are already coming back to
- Back to School is ramping up nicely (implying the competition is missing it)
- Two 90nm products in production now
- All products behind it are 90nm
- We're expecting to use a lot of 90nm.
- Early ramps are hard to say, but it looks like the industry is doing a good job with 90nm.
- Continuing to focus on multimedia-rich handset.
- non-G3 is very large but inconsistent.
- Market was slower in adopting G3 than expected
- Long-term, it's inevitable (bandwidth becoming more available, cellphones having storages, portable gaming devices more popular, etc.)
- It's already a pretty significant business, and we are expecting it to be a significant business in 2006.
- Expecting their product line to be very successful.
- Margins high mostly because of: 7800GTX, very-high-margin product. Still significant focus on gross margins improvements and cost reductions.
- Memory in the quarter was $29M, was $35M in Q1.
- Strategically, always trying to bundle as little memory as possible
- Because it has little value for them, no real margins, just bundling role.
- Helps them get new GPUs on the market faster.
- Began doing this 5 years ago.
- As soon as it's generally available, they let their partners/customers buy the memory instead.
- Going forward, it's going to flip-flop around that level. Not going to be much more or much less.
- Transition is not going like the industry had originally expected (comparaison to AGP transitions)
- 20% of the Channel is PCI-E.
- Expecting 50% of the Channel PCs to be PCI-E by the end of the year.
- Because of the AMD nForce4 platform is completely PCI-E.
- On Intel, it'll happen when DDR2 becomes more cost effective (so that those chipsets make more sense)
- 6200s are right there at the entry level
- So everything is lining up nicely right now.
- Market Share gains expected thanks to PCI-E thanks to their lineup there.
- Heard 5200, might not have heard right (around 39)
- Restating that their product lineup should allow to offset the $70M reduction of the XBox.
- Competitive environment...
- Competitor has excess inventory.
- Everything above and including midrange just isn't going to sell well below SM3.0, it's going to look dated
- Feeling a transition from that point of view.
- He suspects the competition slowed down or stopped building inventory considering that.
- Whatever they were targetting before might have to be moved down one or two segments because it's SM2.0
- Focusing on marketing the benefits of SM3.0. - expecting marketshare gains thanks to this and better lineup.
- Chipsets: Most focused on AMD in the entire business.
- Opportunity for AMD. Expecting AMD to gain share, so they'll benefit from it since they have significant marketshare there.
- Incredibly excited about the upcoming integrated chipset. I'd like to relisten to that part, I seemed to notice implication of "working on
- Majority of the growth for Q3 core is in GPU Desktop; no real growth expected in Notebook, slight growth in workstation.
- Rest of the growth in MCP and to a lesser extend WMP.
- First license payments coming in October. But integrated in some costs etc. (NRI)
- So real license coming in Q1. Royalties in Q2. Expect contribution to gross margins in Q1.
- ROFL at the discussion regarding competition (around 50)
- No one has much visibility because of the supply chain.
- Lots of energy in monitoring segments and their evolution in the channel and other
- Considered a lot of positive and negative
- Which is why guidance has a range.
- But that's, "you know, it comes, so what."
- "Does it matter? Yes. Do we have other things going on? Yes."
- We control the things we can control.
- Insisting on the importance of the Dell deal
- As far as he remembers, first non-Intel chipset for Dell, ever.
- Very proud of it. Feeling the chipset segment is important for us.
- In order to build a sustainable chipset GPU business, need to go back to the basics of building a great chipset.
- Focusing on merging brands (no mention of performance, obviously)
- Can't wait to talk about the RESULTS next quarter.
- Important growth driver, result of 4 years of investments.
- Focus remains the AMD platform.
- "Well, you know, 64-bit is, hum, hum, really important" - Jen Hsun Huang
- Really helpful to Opteron and AMD-64. Good for platform transitions (->chipsets)
- Sucess of AMD64->Good for nForce->Good for us.
- Talked about CURRENT XBox margins, didn't hear (58 or so)
- There will be a premium for integrated graphics sicne it's the combination of 2 brands.
- Focus on LOW-COSTS, problem before was that they didn't have a way to make money in the process.
- "Strategy to develop integrated graphics in a low-cost way" (implying it's integrated in another way than traditionally)
- Price-pressure since it's entry-level, but it'll combine to growth,
- "The most interesting thing is we can do it in a very profitable way"
- Repartition of revenues: "I don't know"
- GPU (Desktops/Mobile/Workstation): $380M
- nForce: $76M
- Xbox+Sony: $80M
- Centrino: Really terrific, Intel doing great job around it
- Our strategy there is to go behind AMD with the Turion, and build an incredible integrated product line around the Turion.
- (So basically just "fighting" the Centrino platform)
- [insert explanation of why 64-bit is always better than equivalent 32-bit]
- If you look at the overall die costs of the AMD64, it's negligible, so transition is inevitable. It will happen.
- "And it's a good thing for the world"
- Opteron chipset: Started from a very low base in the server business. Now we're getting design wins every day.
- The server business is important to us.
- We're expecting to get design wins from that in the workstation market too.
This is pretty much their best results, ever, with the potential exception of the GF4Ti era, because they had lower R&D/Marketing expenses back then. http://phx.corporate-ir.net/phoenix.zhtml?c=116466&p=irol-newsArticle&ID=742570