AMD Reports Fourth Quarter and Annual 2019 Financial Results

[Frick]

Yeah, more server chips reviews using Cinebench and video compression. That clearly works for readers.

EPYC doesn't work because it only offers performance. This will not change unless AMD changes.
And to some extent, this is what ones gets with an altitude like: "out CPUs are fine - it's the software that isn't made properly".

They offer performance/price/power. What are enterprise after?

 

[notb]

They offer performance/price/power. What are enterprise after?

Support, stabilization and minimal operational risk.

 

[TheinsanegamerN]

Oh really? They more than halved their (long term?) debt, increased margins by 5bps, nearly quadrupled EPS, increased market share across the board & beat(?) earnings even with the major downturn in the console lifecycle! Either you're not paying enough attention or just obfuscating facts, did I mention that they're also projecting as much as 30% more revenue this year with even higher margins

Halfing debt doesnt matter to investors. If it did then VC funding for companies like uber would have dried up LONG ago.

Most investors would rather see AMD investing that money spent on paying down debt early thrown into R+D to make more products that will sell and generate more profit. Paying down the debt wont help you if you are not innovating to stay competitive. Same with intel buying back shares to keep the price up, that doesnt make long term profits or even short term profits. AMD's sales are not as high as expected, 2019 wasnt a boom year like 2018 was.

Ryzen 4000 and continued epyc sale swill keep the share price rising, but AMD is not going to be the crown jewel of the computing world for a long time yet.

 

[R0H1T]

Halfing debt doesnt matter to investors. If it did then VC funding for companies like uber would have dried up LONG ago.

I don't remember the specifics, but IIRC it is high interest (rate) debt & secondly why would AMD need VC funding like Uber did when they were a unicorn? Unless you're talking about some recent debt Uber has taken on.

Most investors would rather see AMD investing that money spent on paying down debt early thrown into R+D to make more products that will sell and generate more profit.

They're still investing, heavily across verticals though you should also know that investing in R&D has its real limits. Beyond a certain point investing more will not yield any tangible benefits, in fact it will be counter productive. If investing in R&D was the panacea, as some say, then Intel or IBM would still be the leaders in their dominant fields.

AMD is not going to be the crown jewel of the computing world for a long time yet.

I don't expect that either, but 2x the wafer orders for 7nm TSMC should count for something right?

 

[kapone32]

Can't we all just agree that at the end of the day this is good for everyone. According to info Intel will be dropping their prices this year and implementing SMT on their I5 CPUs. If AMD was not doing what it is doing none of this would have happened. I truly hope that AMD does have some disrupting GPUs coming out because the same thing needs to happen to Nvidia so that high performance GPU prices can come out of the stratosphere.

 

[Xaled]

Support, stabilization and minimal operational risk.

You build your whole idea on a wrong assumption.
AMD is once again suffering from consoles. They are wasting too much resource on consoles and making them with no or almost no profit.
They should focus on PC GPU and stop making consoles. Enough time for proving that it has no ROI

AMD stock slides as forecast, data-center segment come in lower than expected

Advanced Micro Devices Inc. failed to live up to Wall Street’s high expectations Tuesday, damaging its highflying stock.

www.marketwatch.com

Segment that includes server sales disappoints in both sales and outlook, but execs and analyst blame gaming consoles instead of data-center business

 

[IceShroom]

You build your whole idea on a wrong assumption.
AMD is once again suffering from consoles. They are wasting too much resource on consoles and making them with no or almost no profit.
They should focus on PC GPU and stop making consoles. Enough time for proving that it has no ROI

AMD stock slides as forecast, data-center segment come in lower than expected

Advanced Micro Devices Inc. failed to live up to Wall Street’s high expectations Tuesday, damaging its highflying stock.

www.marketwatch.com

Focus on PC market and loose more money.
The reason less revenue from console, the current generation will repleaced by new consoles this year. So MS and Sony producing less current generation console. This means less chip sold by AMD to console marker. Less chip less means less revenue from console.

 

[Vya Domus]

They are wasting too much resource on consoles and making them with no or almost no profit.

And you know that based on what ?

Current consoles are close to the end of their life-cycle, sales will never pick up again in any considerable manner from now on. As usual articles from finance/stock market sites are written by people that do not know or understand technology or whatever thing it is that the company they write about are involved in.

 

[Xaled]

Focus on PC market and loose more money.
The reason less revenue from console, the current generation will repleaced by new consoles this year. So MS and Sony producing less current generation console. This means less chip sold by AMD to console marker. Less chip less means less revenue from console.

The main reason Nvidia is has been winning is PC GPUs (they acknowledges that in last quarter results)
And No, AMD never won anything from consoles, before Ryzen and even at consoles best days, AMD were always losing. And now the success of Ryzen isn't fully reflected on earnings because of investment on consoles and building new consoles

 

[notb]

You build your whole idea on a wrong assumption.
AMD is once again suffering from consoles. They are wasting too much resource on consoles and making them with no or almost no profit.

I have no idea why you answered my post with that. There's no connection.

As for revenue problems coming from consoles: most don't believe. Analysts directly asked AMD for separate console and server figures and they said "no".
-8.12% at the moment. Savage.

They should focus on PC GPU and stop making consoles. Enough time for proving that it has no ROI

AMD sets very low prices and they aren't making serious money from any segment.
Consoles provide a guaranteed cashflow.

 

[64K]

And you know that based on what ?

Current consoles are close to the end of their life-cycle, sales will never pick up again in any considerable manner from now on. As usual articles from finance/stock market sites are written by people that do not know or understand technology or whatever thing it is that the company they write about are involved in.

I have no proof that AMD was selling their chips to Sony, MS and Nintendo for too cheap but I do recall that after AMD landed those contracts they were posting their biggest losses ever to the tune of hundreds of millions of dollars. That was the old AMD game plan and the AMD fans loved them and praised them for selling so cheaply to PC builders as well. The new AMD game plan is to sell chips at a fair price.

 

[Vya Domus]

I have no proof that AMD was selling their chips to Sony, MS and Nintendo for too cheap but I do recall that after AMD landed those contracts they were posting their biggest losses ever to the tune of hundreds of millions of dollars.

Everyone that seriously believes AMD was making chips for MS and Sony all this time for no profit or at a loss has to be delusional. Console sales will surge in a year from now or so and so will AMD's semi-custom segment. 7nm is pricey and the chips will be fairly big, they'll come with a nice premium.

 

[IceShroom]

The main reason Nvidia is has been winning is PC GPUs (they acknowledges that in last quarter results)
And No, AMD never won anything from consoles, before Ryzen and even at consoles best days, AMD were always losing. And now the success of Ryzen isn't fully reflected on earnings because of investment on consoles and building new consoles

The reason Nvidia sell gaming gpu is that people buy Nvidia gpu, even Nvidia schrew them.
And console sell and Apple OEM sell kept AMD afloat before Ryzen came, not gaming gpu. PC people dont buy AMD gpu.

 

[HD64G]

2020 will be a year of big economic growth for AMD if big global affected negative events don't occur. Next-gen consoles with higher profit margin SOCs and many EPYC powercomputers and server are planned. Mobile Zen2 will sell well and desktop is established as AMD field already for the next 2-3 years at least. It can get only MUCH better and only haters cannot see that. And us costomers have already big benefits with AM4 platform being compatible with 4 CPU series with up to monstrous in performance and efficiency 16-core ones that don't cost much for what they offer, especially with the platform's cost being so low if needed.

 

[kapone32]

As much as people complain that no one buys AMD GPUs should remember that Polaris cards sold quite well.

 

[Xaled]

I have no idea why you answered my post with that. There's no connection.

As for revenue problems coming from consoles: most don't believe. Analysts directly asked AMD for separate console and server figures and they said "no".
-8.12% at the moment. Savage.

Why are you so satisfied about that? Don't get too much because it is temporary and it happened just because stakeholders were expecting more earnings.
They spend too much on developing consoles. And now they are working on PS5 and xboxs next console. They don't want to include console numbers alone so they don't get exposed that they are making losing investment and investors would try to prevent them from doing that

AMD sets very low prices and they aren't making serious money from any segment.
Consoles provide a guaranteed cashflow.

Very low margin on CPUs and GPUs but losing in consoles. Totally two different things

 

[prtskg]

I have no proof that AMD was selling their chips to Sony, MS and Nintendo for too cheap but I do recall that after AMD landed those contracts they were posting their biggest losses ever to the tune of hundreds of millions of dollars.

That was courtesy of Bulldozer selling very badly. Consoles saved AMD from going bankrupt at their worst phase. It's like their insurance.

 

[TheinsanegamerN]

I don't remember the specifics, but IIRC it is high interest (rate) debt & secondly why would AMD need VC funding like Uber did when they were a unicorn? Unless you're talking about some recent debt Uber has taken on.
They're still investing, heavily across verticals though you should also know that investing in R&D has its real limits. Beyond a certain point investing more will not yield any tangible benefits, in fact it will be counter productive. If investing in R&D was the panacea, as some say, then Intel or IBM would still be the leaders in their dominant fields.
I don't expect that either, but 2x the wafer orders for 7nm TSMC should count for something right?

I'm using the VC funding just as an example. I'm not saying AMD is getting VC investors, I'm saying that investors dont care about debt as long as a company is innovating in the pursuit of larger future profits, and that is why AMD reducing its debt load is not raising share price.

R+D has its limits, sure, but based on the storry state of RTG hardware and drivers (freesync STILL broken on navi 7 months later) and the far larger support group, from integration to customer support that intel boasts, AMD has plenty of areas that need more investment. Investors see that, again just an explanation of why investors were not buying up shares when the quarterly report came out.

As for intel/IBM, well, intel is putting mor einto share buyback instead of R+D, and look where it got them, and where they are going. Despite that, they are still HUGE compared to AMD, both in market share and revenue. IBM is a sad tale, but a great example of a dominant player falling asleep at the wheel.

2x the wafer orders will help, but that wont happen until Apple drops 7nm usage. Even then, it takes months for those chips being fabed to reach manufacturers and retailers, and wiht the chinese new year being extended by 2 weeks amid the croronavirus outbreak, it will take time before this strategy pays off any dividends, and that assumes the demand is there. We havent heard of EPYC shortages like we have Xeon shortages from intel.

AMD is on a slow boil, which is good, AMD is positioned to do quite well, but investors want it to get huge quick so they can make a profit and dump the shares. AMD isnt playing that game, hence why share prices went down instead of up.

 

[Xaled]

That was courtesy of Bulldozer selling very badly. Consoles saved AMD from going bankrupt at their worst phase. It's like their insurance.

Actually it is, AMD went through bad days because they focused on Consoles and APUs instead of CPUs and GPUs
Bulldozer should've not been released at all

 

[Xzibit]

Actually it is, AMD went through bad days because they focused on Consoles and APUs instead of CPUs and GPUs
Bulldozer should've not been released at all

Don't forget ARM/Hybrids, Memory and SSDs...

 

[64K]

Everyone that seriously believes AMD was making chips for MS and Sony all this time for no profit or at a loss has to be delusional. Console sales will surge in a year from now or so and so will AMD's semi-custom segment. 7nm is pricey and the chips will be fairly big, they'll come with a nice premium.

I didn't say that AMD was selling their chips to console manufacturers for no profit or at a loss. Just that they were selling them too cheaply.

Like I said I have no proof that AMD was selling their chips too cheaply but there is no proof that they weren't either. I imagine you could dig up some info on what the revenue was but I doubt you could find the profit made. A healthy profit is what a company needs to invest in R&D for the future and pay the overhead.

 

[notb]

I didn't say that AMD was selling their chips to console manufacturers for no profit or at a loss. Just that they were selling them too cheaply.

Too cheaply or not... Depends what you want to achieve.
AMD admitted during a press conference that console segment has lower profit margin than PCs and servers.

 

[Vya Domus]

Like I said I have no proof that AMD was selling their chips too cheaply but there is no proof that they weren't either. I imagine you could dig up some info on what the revenue was but I doubt you could find the profit made. A healthy profit is what a company needs to invest in R&D for the future and pay the overhead.

You are not putting this into context, over the years there have been sold something around the 100 million mark of combined Xbox One and PS4 and that doesn't include the PS4 and Xbox One X which came along half way through.

Even if we come up with the most primitive and absurd estimation on profit, for instance let's say they made back 1$ for each chip sold that's still 100 million dollars, far from insignificant.

AMD made good money from consoles and more importantly it was a relatively constant and reliable stream of cash, few companies get that sort of privilege in this industry.

 

[kapone32]

You are not putting this into context, over the years there have been sold something around the 100 million mark of combined Xbox One and PS4 and that doesn't include the PS4 and Xbox One X which came along half way through.

Even if we come up with the most primitive and absurd estimation on profit, for instance let's say they made back 1$ for each chip sold that's still 100 million dollars.

AMD made good money from consoles and more importantly it was a relatively constant and reliable stream of cash.

Consoles are a much more viable platform for long term sales and directly helped AMD develop Ryzen, Polaris and specifically Navi. I don't expect the cost of the next phase of GPUs to go down so consoles should continue to be a good customer even if the margins are low. Combined with the promised specs the PS5 or Xbox Scarlett should sell quite well (especially if they have backwards compatibility).

 

[64K]

You are not putting this into context, over the years there have been sold something around the 100 million mark of combined Xbox One and PS4 and that doesn't include the PS4 and Xbox One X which came along half way through.

Even if we come up with the most primitive and absurd estimation on profit, for instance let's say they made back 1$ for each chip sold that's still 100 million dollars, far from insignificant.

AMD made good money from consoles and more importantly it was a relatively constant and reliable stream of cash, few companies get that sort of privilege in this industry.

I have seen estimates as high as $10 gross profit from each chip sold to the console manufacturers after the cost to fab the chips that would place the gross profit at around 1 billion dollars over a period of several years but that doesn't mean all of that money went into AMD's bank account. There are R&D costs to recoup on the chip design staff at AMD to pay, rent, utilities, defective chips that were returned to AMD for a refund etc.

The most telling thing of all was that Intel and Nvidia weren't even interested in the console contracts because they both liked a high profit margin and they didn't see the console contracts as worth bothering with.