2008 second-quarter earnings loss of the A again reported MD , Performance is not only less than Wall Street analysts expected, and is 7 consecutive quarterly loss, AMD had coaching change?? Ruiz stepped down, the current chief operating officer Dirk? Meyer took over as CEO.
Two years ago, Ruiz and AMD is the most glorious period under the leadership of the Ruiz, AMD’s market share has reached its highest point ever, with excellent products, AMD continued to expand in the chip market The share of this people feel its aggressive momentum. On the contrary, strong Intel , Gives the performance of old age and feeling. But it also seemed to give the AMD underestimate the enemy and the reason for the expansion ambitions. July 2006, AMD announced a 5.4 billion acquisition of ATI. It is this “radical” acquisition strategy, and later products of gross negligence, leading to Ruiz and AMD, I have paid a terrible price.
AA joint did not bring the expected results
AMD acquisition of ATI’s purpose is to enhance the chip’s graphics processing power, while further strengthening its own chipset business. Before the acquisition of ATI, AMD has been focusing on the microprocessor business. AMD announced the acquisition of ATI back in time, there are many analysts questioned the deal, they are worried about AMD unable to repay huge debts arising from transactions, but also that the value of ATI for AMD to increase far less than the purchase price. Prior to the acquisition of ATI, AMD’s own cash, only 30 billion dollars, 5.4 billion is not sufficient to pay the full acquisition of ATI, then Youxiang Morgan Stanley 2.5 billion loan, carrying some debt. Moreover, AMD’s own product lines stretched, and Intel’s price war will require substantial financial support. However, AMD was facing funding problems of their own appears underestimated.
Industry is also generally worried about indigestion after AMD acquisition of ATI, but, this time Intel has AMD’s offensive began, “there was a reaction.” How to digest, while ATI’s counterattack against Intel, AMD is facing major challenges. At that time, with confidence, AMD appears to not agree to these problems. In fact, the deal soon, Intel will increase its efforts to fight back. With new Intel Core Duo platform, launched the products of the most frequent replacement plan, in 2006, had “record in the 150 days to launch a 40 variety of processors.” The two rivals in the processor from a single core, dual-core to quad-core dispute on the speed of “race” has become a year ago, a major IT industry landscape. With the powerful Intel’s price war and speed for the race, AMD “seriously weakened”, the face of Intel’s new product release cycle and have become increasingly frequent, AMD did not introduce new products on time, so in trouble.
Intel in November 2006 to pre-empt the release of the quad-core processors, the release site, the mainstream home and abroad Server OEM manufacturers gathered, Intel Pentium and Itanium release Zhongxingpengyue glory to reproduce. In contrast, high expectations of the industry has repeatedly delayed AMD Barcelona processor, and serious mistakes. AMD launched in September 2007, code-named Barcelona quad-core Opteron processor, half a year later than planned; early December 2007, AMD admitted shortcomings in Barcelona, volume shipments will not occur until this year. Meanwhile, AMD also recognized the original acquisition of graphics chip maker ATI’s price too high to write off the goodwill value of ATI.
From the strength and financial resources, AMD and Intel are not in an order of magnitude, AMD once again recognize the strong opponents. The face of strong Intel, AMD overwhelmed, and had to abandon previous “Competition to promote the new rate, the performance of new products Competition” radical strategy, which will focus on how to achieve profitability.
Latest earnings announcement the same time, AMD announced its withdrawal from handheld devices and digital TV chip market. To this end, AMD will be a one-time expenditure of 876 million U.S. dollars, accounting for most of the second quarter of losses. This year in April, AMD CEO Hector Ruiz said at the time, to reduce the cost of return to profitability, AMD consider withdrawing from non-strategic and non-profit, non-core business. The department had charge of the new microprocessor CEO Meyer’s office has also been speculated to be AMD “return” to the core business of the signal.
Relatively AMD, the race for Intel only hurt the pain of short fur, AMD is a hurt to the entire body of long-term pains?? AMD released the seventh in a “loss of earnings” in the first two days, Intel released the 2008 second quarter earnings are very “bright”: net profit up 25%, more than analysts expected. With the two rivals settled the war between the chip, Intel once again revert to the previous level of high profit margins.
While AMD will not introduce some better products and design, to Intel by surprise, but falls far short of strength in the chip market’s long-term battle, AMD has always lagged behind Intel. Chip industry has always been seen as “swallowing gold” industry, to achieve product and technology upgrading, need to have strong financial strength. This determines the contest AMD with Intel, the radical head-way undesirable.
AMD have to undergo a “Guagu heal” the pain.
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