Feeds

AMD balance sheet not exactly an Intel clone

Bulldozers to shore up server biz

Secure remote control for conventional and virtual desktops

Advanced Micro Devices is no longer a fabricator of chips, but it is still benefitting from spinning out its wafer-baking unit to GlobalFoundries.

In the first quarter ending April 2, AMD's sales were up a modest 2 per cent, to $1.61bn, but all of its costs were on the rise, and its operating income fell by 70 per cent, to $54m.

But it benefitted from a non-cash bookkeeping gain relatedto the dilution of AMD's stake in GlobalFoundries, which occurred after Advanced Technology Investment Company, an investment arm of the Abu Dhabi government that has taken a shining to chips, bought Chartered Semiconductor in September 2009. That bookkeeping gain was a whopper, at $492m, and after taking into account interest and minimal income taxes, AMD was able to report net income of $510m, nearly double the black ink that AMD squiggled at the bottom of the Q1 2010 column.

That's better revenues and net earnings than Wall Street expected, but the top line and operating income lines show that AMD is not growing as fast as its rival, Intel, and it most definitely is not putting a mix of products into the field that allows it to profit like Intel is doing right now. But, says Thomas Siefert, the company's chief financial officer and interim CEO, the stage is being set for AMD's combined CPU-GPU chips – what AMD calls an APU, short for an accelerated processing unit – for PCs and "Bulldozer" chips for servers to boost sales and profits in the coming quarters.

Intel set a company record in its first quarter, with sales up 25 per cent, to $12.9bn, and net income up 34 per cent, to $3.3bn. That's real money and real profits.

In the first quarter, AMD's Computing Solutions unit, which makes processors and chipsets, posted $1.2bn in revenues, up 3 per cent year-on-year but down 2 per cent sequentially, and had an operating income of $100m, which was down 32 per cent. ASPs were down for both notebook and server parts, AMD said, but slightly better desktop chip ASPs partially offset these declines.

APU shipments, mostly the "Brazos" chips that launched in January back at the Consumer Electronics Show, were triple in the first quarter compared to the fourth quarter of 2010, according to Siefert, who added that the Brazos APUs accounted for half of shipments to OEMs who build notebooks in the first quarter. The delayed "Llano" APU, which is being fabbed by GlobalFoundries in its 32 nanometer processes, shipped for revenue in the quarter. In a conference call with Wall Street analysts, Siefert reiterated that AMD expected for Llano-based machines to be "widely available" in the second quarter.

AMD's Graphics unit had $413m in revenues, up 1 per cent year-on-year but down 3 per cent sequentially. It had an operating income of $19m. A seasonally driven decline in game console sales hurt the graphics unit some.

With many worried about a slowdown in the PC business, Siefert said that AMD still expected for PC shipments to grow by 11 per cent in 2011, and despite some chicken littling by the box counters who are more pessimistic about the PC biz right now, he said AMD did not "see any reason to deviate from that expectation." In fact, said Seifert, he expects for some market analysts to come back and significantly revise their own prognostications at some point.

While the PC business is making people jumpy right now, when it comes to AMD, the server business, which is where the real profits come from, are what Wall Street wants to know about. Siefert said that AMD reckoned it had about 6.6 per cent share of server chip shipments in the first quarter. That's pretty low even by AMD standards.

And because of that, AMD has added a larger team of customer account engineers to work with server OEMs on adopting the future "Interlagos" and "Valencia" Opteron processors, which will sport the "Bulldozer" cores that AMD has been etching for a few years now. Seifert said that AMD was also working with the ODMs who in turn work directly with big cloud computing providers to engage on Bulldozer designs, and said once again that the server variants of the Bulldozers would ship in the late summer. Bulldozer variants for PCs – with lower core counts and higher clock speeds – are expected to come out in the early summer, with the "Orochi" chips leading the way.

At its current market share in the server racket, Siefert said that AMD was "borderline profitable" in the server racket, and added that he expected to see share gains in servers against Intel in the second half of the year. "I think it is safe to say that we stabilized market share in the first quarter," Siefert said, referring to AMD's Opteron server chip business.

Looking ahead, Siefert said that AMD expected for sales in the second quarter to be flat to slightly down. He added that the AMD board of directors was "pleased" with the pool of people showing interest in becoming CEO at the company and said that it was conducting interviews. He did not elaborate further. ®

Boost IT visibility and business value

More from The Register

next story
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Premier League wants to PURGE ALL FOOTIE GIFs from social media
Not paying Murdoch? You're gonna get a right LEGALLING - thanks to automated software
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
XBOX One will learn to play media from USB and DLNA sources
Hang on? Aren't those file formats you hardly ever see outside torrents?
Class war! Wikipedia's workers revolt again
Bourgeois paper-shufflers have 'suspended democracy', sniff unpaid proles
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.