The AMD Execution Thread [2007 - 2017]

[AlphaWolf]

My point being is that this is impossible. It is all relative and there is always price at which everything will sell. That's why I suggested an investment type of strategy to replace this ridiculous penalty...

Instead they probably have lower actual cost but higher indirect losses too.

Spending more on products no one wants in the hopes that someone might buy them at a discount is way more risky than the penalty. If you do find a buyer you likely have also lost one for an actual profitable product. So now you are reducing margins elsewhere. You can't just slash prices without affecting the market, most people aren't going to buy a 2nd computer just cuz they got a good deal on the first.

 

[Silent_Buddha]

My point being is that this is impossible. It is all relative and there is always price at which everything will sell. That's why I suggested an investment type of strategy to replace this ridiculous penalty...

Instead they probably have lower actual cost but higher indirect losses too.

Well, I suppose they could have bought chips at 1 billion USD. Then sold them at a loss in order to sell them and then made a loss of 2 billion USD total. In that hypothetical situation they would end up saving ~1.7 billion USD by paying Global Foundries to get out of the contract.

Just saying you can sell something doesn't mean that for the volume they had under contract they could have sold the majority of them at a profit.

Regards,
SB

 

[jimbo75]

It's not against the law to operate a monopoly... as long as you don't abuse it. Intel just would have to be even more careful to avoid doing this.

Avoid getting caught you mean.

It's not their fault that AMD can't design competitive products (or earlier, fabs.)

Yeah poor AMD unable to contend with Intels massively larger R&D budget, just like the rest of the industry.

As for competitive products, if you compare them all it's quite clear that AMD is competitive in some areas, not quite so competitive in others.

 

[DuckThor Evil]

Well, I suppose they could have bought chips at 1 billion USD. Then sold them at a loss in order to sell them and then made a loss of 2 billion USD total. In that hypothetical situation they would end up saving ~1.7 billion USD by paying Global Foundries to get out of the contract.

Sometimes I wonder if my eyes aren't working... but no you really typed that.

 

[silent_guy]

Avoid getting caught you mean.

If they don't get caught, they didn't do it in the eyes of those that matter.

Yeah poor AMD unable to contend with Intels massively larger R&D budget, just like the rest of the industry.

I'm honestly not sure if you're blaming Intel for spending too much on R&D, as if that's a bad thing somehow.

As for competitive products, if you compare them all it's quite clear that AMD is competitive in some areas, ....

Do tell!

 

[silent_guy]

A lot of things are wrong with AMD. Especially this one:

I don't understand how they did dare to do it. I mean they could have launched a huge advertisement campaign with this money, or manufacture the chips and sell them to gain some market share.
Simply ridiculous.

Well, what'd you suggest was the alternative?

I can think of 2:
- the strategic option: they shouldn't have spun off GlobalFoundries
- buy a crapload (much more than the amount given to GF) of silicon for which they had no customers. IOW: waste even more cash.

They may not be in the best possible shape, but I'm confident their bean counters better at using Excel than you are.

 

[silent_guy]

It would take about 10seconds for someone to claim they were abusing it. Hell they've already been abusing it for years.

Ok. Make that: abuse enough to make the US or EU to force to break you up.

FYI: They were unable to make any of that stick with MS.

 

[jimbo75]

If they don't get caught, they didn't do it in the eyes of those that matter.

Considering how often they've been caught in the past, they clearly need to improve that part of their game.

I'm honestly not sure if you're blaming Intel for spending too much on R&D, as if that's a bad thing somehow.

Nope, I'm simply pointing out that your antagonistical pov on AMD for "failing" to match intel's billions in R&D is illogical. But not exactly surprising given your history.

Do tell!

What would you like to know? Pretty sure AMD wins in graphics for a start.

 

[jimbo75]

Well, what'd you suggest was the alternative?

I can think of 2:
- the strategic option: they shouldn't have spun off GlobalFoundries

And where were they finding the billions for 32nm and below genius?

- buy a crapload (much more than the amount given to GF) of silicon for which they had no customers. IOW: waste even more cash.

So like intel leaving 50% of their fabs unutilised next quarter? Why did they buy so much capacity for which they had no customers?

They may not be in the best possible shape, but I'm confident their bean counters better at using Excel than you are.

Based on the previous two quotes, I'm 100% confident most people are better at figuring out a viable business strategy than you are.

 

[AlphaWolf]

Ok. Make that: abuse enough to make the US or EU to force to break you up.

FYI: They were unable to make any of that stick with MS.

Being forced to break up isn't the only thing that can happen. MS was basically on probation for 10 years.

 

[Silent_Buddha]

Sometimes I wonder if my eyes aren't working... but no you really typed that.

Yes using nonsensical numbers (so no one would be silly enough to assume I was using real numbers) to get the point across that sometimes it's better financially to take the loss on negotiating your way out of contractual obligations than it is to meet them.

Regards,
SB

 

[silent_guy]

And where were they finding the billions for 32nm and below genius?

Good job: they didn't. So scratch that.

So like intel leaving 50% of their fabs unutilised next quarter? Why did they buy so much capacity for which they had no customers?

Let me spell it out for you: No company can spin off their ugly duckling to other investors without iron clad guarantees that, for a certain amount of time, they'd continue to use them as a customer. This should give the spin-off enough time to develop a new customer base. AMD has a piece of crap in their hands and wanted to get rid of it. The only way to do so was to promise to use this much capacity. They had absolutely no other choice, they only other option was the strategic option to stick with a fab.

Based on the previous two quotes, I'm 100% confident most people are better at figuring out a viable business strategy than you are.

Let's find ourselves 2 more who are worse than me and we've got ourselves a card game. UniversalTruth maybe?

 

[silent_guy]

Being forced to break up isn't the only thing that can happen. MS was basically on probation for 10 years.

I commented on Kaotik's "chopping them to pieces".

I mistakenly assumed that was a synonym for "breaking up". My bad.

 

[silent_guy]

Considering how often they've been caught in the past, they clearly need to improve that part of their game.

And each time they've gotten away with a slap on the wrist and an symbolic fine that's a fraction of their quarterly profits. They'll be fine.

Nope, I'm simply pointing out that your antagonistical pov on AMD for "failing" to match intel's billions in R&D is illogical. But not exactly surprising given your history.

All I'm saying is that's there nothing wrong with spending billions on R&D. Not from an ethical point of view and not from a monopolistic point of view.

What would you like to know? Pretty sure AMD wins in graphics for a start.

Yay! Competitive performance in a peripheral! Too bad nobody seems to care if the perf of the linked CPU isn't up to snuff as well.

 

[DuckThor Evil]

Yes using nonsensical numbers (so no one would be silly enough to assume I was using real numbers) to get the point across that sometimes it's better financially to take the loss on negotiating your way out of contractual obligations than it is to meet them.

Regards,
SB

Do you realise what's nonsensical about them?

edit: Your point about negotiating a better contract is valid, however if I buy a GTX 690 from newegg for $1000 and immediately sell it, what should the asking price be for me to lose $2000 on it?
If you sell your inventory, even for a loss it still lessens your initial investment costs, so without going totally off course with semantics, AMD by selling the chips would lessen the 1 Billion purchasing cost, not increase the loss to 2 billion.

 

[UniversalTruth]

Well, I suppose they could have bought chips at 1 billion USD. Then sold them at a loss in order to sell them and then made a loss of 2 billion USD total. In that hypothetical situation they would end up saving ~1.7 billion USD by paying Global Foundries to get out of the contract.

Just saying you can sell something doesn't mean that for the volume they had under contract they could have sold the majority of them at a profit.

Regards,
SB

First of all, if they go bankrupt, it wouldn't make any difference. Ok, maybe they would have made their customers much more happy, and would have shortened their agony.
And how do you know that with this penalty they saved wafers for 1 bln dollars?

 

[Silent_Buddha]

Do you realise what's nonsensical about them?

edit: Your point about negotiating a better contract is valid, however if I buy a GTX 690 from newegg for $1000 and immediately sell it, what should the asking price be for me to lose $2000 on it?
If you sell your inventory, even for a loss it still lessens your initial investment costs, so without going totally off course with semantics, AMD by selling the chips would lessen the 1 Billion purchasing cost, not increase the loss to 2 billion.

Duh, I see what you're pointing out. I know better than to post when I'm exhausted, but there I go again. Yes. Purchase the wafers and starts for 1 billion. Probably won't net 2 billion in losses but could still net over 1 billion in losses (however unlikely), but yes likely less, depending on various factors.

You still have to do validation, which may or may not be included in that cost. You still have to do packaging. You still have to ship to customers. And then are you going to try for a profit up front? Or sell at a loss immediately? Ever second a chip sits in a warehouse the value depreciates. But if you flood the market at too low of a cost you'll dilute the demand and potentially have a harder time selling those chips. If demand is really low you may end up having to destroy chips (again, unlikely, but not unheard of). Depending on the country where you do business you may actually have to pay to have them destroyed/recycled. Although in some countries you may get pennies on the dollar for recycling.

But yes. Further proof that I shouldn't post when my brain is worn out and doesn't want to think overly much.

Regards,
SB

 

[UniversalTruth]

If a single wafer costs around 5K, then 1 bln dollars would equal to 200K wafers. Sorry but I think this number is way out of reality.

 

[gkar1]

Do tell!

Well, given a level playing field AMD's tech beat out Intel in getting into the Xbox Next and PS4, not to mention the Wii U and quite possibly even Valve's Steambox.

 

[function]

Do tell!

Off the top of my head:

1) Battery life under typical mobile conditions

2) Integrated graphics - if you don't plan on having a discreet GPU then AMD win hands down

3) Tablets: Atom is shit and IVB is incredibly expensive and still too hot for fanless. Jaguar will the be ideal mobile chip for many people, if they ever get the chance to buy it

4) Anything to put in a console