Where's the Ryzen Effect? Intel posts Record Financials

[laszlo]

But now you're talking about real cost cutting, so I'm a bit lost. Of course companies are trying to control costs. That's how they can make a profit...

I thought your earlier post suggested they're reporting understated costs, i.e. they're artificially increasing their margins.
It's fairly easy to hide income (report lower net profit) and most companies do that, but it's very difficult to hide costs.

It's even harder for Intel, who does almost everything in-house.

maybe my 1st post was a little bit unclear; i have only one problem with this posted news; they announce high profits but no detailed operations results which shall include costs also; i think we had to wait the detailed one to go further on this...

 

[neatfeatguy]

I swear the title of this topic "Where's the Ryzen Effect? Intel posts Record Financials " wasn't called this yesterday when it was posted - it was something more in lines about Intel releases financial year end or forth quarter earnings or some such.

What's with the click bait title you put up there? Seems kind of a juvenile move.

Spoiler

I hate click bait shit and I don't wish to see it here posted as a News story. I visit other sites less and less as the days/weeks/years go by because every Tom, Dick and Jane is putting click bait crap on their sites to get people to click. I don't have time to sift through the bullshit they post to see what kind of merit, if any, their story actually holds.

If you're trying to prove a point, do it in the story, not a click bait title. Provide facts, links, sources and useful information. Right now, your story has nothing in it about Ryzen, AMD or any impact that other competitors of Intel has impacted their earnings. It's just a poor, petty shot at AMD to encourage clicks to the story.

 

[notb]

maybe my 1st post was a little bit unclear; i have only one problem with this posted news; they announce high profits but no detailed operations results which shall include costs also; i think we had to wait the detailed one to go further on this...

The detailed, regulatory-forced statement is out as well (it's called "Form 10-K" in US).

Intel Corporation - Investor Relations - Financials & Filings - SEC Filings - SEC Filings Details

www.intc.com

 

[Deleted member 158293]

There would need to be 10 AMD Corps., not just 1 to begin hurting Intel where it would really notice...

AMD needs to keep giving away their top tier server CPUs which are head & shoulders above Intel for many years to come to develope their working ecosystem and for the corporate upgrade cycle to kick in.

 

[64K]

There would need to be 10 AMD Corps., not just 1 to begin hurting Intel where it would really notice...

AMD needs to keep giving away their top tier server CPUs which are head & shoulders above Intel for many years to come to develope their working ecosystem and for the corporate upgrade cycle to kick in.

Selling their chips too cheaply is what almost bankrupted AMD a few years ago with record yearly losses in the hundreds of millions of dollars. It didn't increase their market share in CPUs iirc and it had the opposite effect in their GPU market share. Their discrete GPU market share fell all the way down to 18% at one point. imo this was due to some potential customers looking at the high costs of a GPU and being concerned that if AMD did go out of business then they might not get proper future drivers support.

AMD is doing better now by selling a mostly competitive CPU for a fair price and making profits again instead of losses.

The main problem AMD faces is getting more market share from the big PC manufacturers and I have no idea how they can do this but reducing prices too much and going back to taking huge losses didn't work before and I see no reason why it would work now.

 

[Dragonsmonk]

1.3B less income where?

Source?
From what I've found, they're actually up from 2018 (+2%).
Not that it matters. 2% workforce fluctuation is nothing special.

Source was metioned in an earlier post: Link to source

Screenshots from said source:

and I actually misread the numbers of employee's - they have increased, which is nice.

 

[Deleted member 158293]

Selling their chips too cheaply is what almost bankrupted AMD a few years ago with record yearly losses in the hundreds of millions of dollars. It didn't increase their market share in CPUs iirc and it had the opposite effect in their GPU market share. Their discrete market share fell all the way down to 18% at one point. imo this was due to some potential customers looking at the high costs of a GPU and being concerned that if AMD did go out of business then they might not get proper future drivers support.

AMD is doing better now by selling a mostly competitive CPU for a fair price and making profits again instead of losses.

The main problem AMD faces is getting more market share from the big PC manufacturers and I have no idea how they can do this but reducing prices and going back to taking huge losses didn't work before and I see no reason why it would work now.

It's not selling server chips at a loss, but with enough incentive for admins to justify the perceived risk they are taking in changing their infrastructure from Intel to AMD in chasing a higher ROI & lower TCO.

The corporate world looks for stability first, and a long time between upgrade cycles. What I'm saying is AMD needs to keep up this pace and staying ahead of Intel for many years to come while keeping prices que low to start being considered in upgrade cycles and for OEMs to dedicate enough resources to build options.

On the desktop, the market has much faster upgrade cycles and malleable PR as we can experience.

 

[hurakura]

the title is unprofessionalism and fanboyism

 

[64K]

It's not selling server chips at a loss, but with enough incentive for admins to justify the perceived risk they are taking in changing their infrastructure from Intel to AMD in chasing a higher ROI & lower TCO.

The corporate world looks for stability first, and a long time between upgrade cycles. What I'm saying is AMD needs to keep up this pace and staying ahead of Intel for many years to come while keeping prices que low to start being considered in upgrade cycles and for OEMs to dedicate enough resources to build options.

On the desktop, the market has much faster upgrade cycles and malleable PR as we can experience.

I guess I just have a lesser opinion of the average customer than you. The vast majority are hardware tech illiterate imo and they look at the huge offering of desktops, laptops and servers with Intel CPUs and the small offering with AMD CPUs from the big manufacturers and they consider the last couple of PCs they had with "Intel Inside" that were good PCs and they go ahead and buy Intel again.

It's human nature to buy what has worked well in the past and what they see the vast majority of other people are buying as well.

I don't work in IT and I don't know what pull they have over the CFO where I work but I doubt the CFO knows much about PC hardware. He just looks at the deals we have made with Dell buying hundreds of PCs at a time and using Intel CPUs for the last 15 years and approves the purchase based on that.

 

[Valantar]

People who are thinking that Intel is being hurt much by Ryzen should take a look at how most PCs are sold. Take a look around Dell's online store and you will see that by far the majority of desktops and laptops for work or for home use have Intel CPUs. A few have the AMD alternative though.

Their servers you can choose between Intel or Intel.

I have seen estimates that AMD has doubled their market share in the server market but their market share is still extremely low.

Will AMD or Intel Gain Mobile and Server Market Share?

AMD stock is popular among investors, as is evident from its 180% increase since January 2018. Investors are betting on its market share gain from Intel.

articles2.marketrealist.com

Basically, until the big PC manufacturers start pushing more AMD CPUs in their business and home PCs and servers then AMD will only make modest gains in market share and Intel will remain the colossus in the CPU market.

You're not wrong whatsoever. The problem (well, for Intel at least) is that these numbers only encompass about one quarter of Ryzen 3000 being widely available. Ryzen 3000 has seen a wider uptake among OEMs than previous generations, though especially for business PCs it's still a trickle. On the other hand AMD are announcing 2x the design wins for Ryzen Mobile 4000 compared to the previous generation (which again marked a similar increase from 1st gen) and a lot of those SKUs are significantly higher end than what they've gotten previously. EPYC is also seeing record sales numbers and many multiples the number of available servers compared to previous generations - but as you say, this is still in the mid single digits in terms of market share, and while they might double that in a year, any more is unlikely.

The point here is that businesses are conservative - they want to stick with what is proven to work. Intel of late is not really working - the part shortages being the major thing in the OEM space, leading to direct financial losses - and AMD has through three generations of Ryzen shown that they are once again a contender in most market segments while having no supply issues. So while there have been few Ryzen SKUs in any kind of prebuilt segment up until now, the numbers are increasing rapidly. Chances are that the "Ryzen effect" (to adopt a very silly term) will start being truly visible next year. It still won't amount to any more than slight drops in various segments for Intel, but it will be there.

 

[64K]

You're not wrong whatsoever. The problem (well, for Intel at least) is that these numbers only encompass about one quarter of Ryzen 3000 being widely available. Ryzen 3000 has seen a wider uptake among OEMs than previous generations, though especially for business PCs it's still a trickle. On the other hand AMD are announcing 2x the design wins for Ryzen Mobile 4000 compared to the previous generation (which again marked a similar increase from 1st gen) and a lot of those SKUs are significantly higher end than what they've gotten previously. EPYC is also seeing record sales numbers and many multiples the number of available servers compared to previous generations - but as you say, this is still in the mid single digits in terms of market share, and while they might double that in a year, any more is unlikely.

The point here is that businesses are conservative - they want to stick with what is proven to work. Intel of late is not really working - the part shortages being the major thing in the OEM space, leading to direct financial losses - and AMD has through three generations of Ryzen shown that they are once again a contender in most market segments while having no supply issues. So while there have been few Ryzen SKUs in any kind of prebuilt segment up until now, the numbers are increasing rapidly. Chances are that the "Ryzen effect" (to adopt a very silly term) will start being truly visible next year. It still won't amount to any more than slight drops in various segments for Intel, but it will be there.

While I am hoping for large gains in AMD's CPU market share I am still skeptical for now. I am definitely hoping for AMD to continue to gain market share though and tbh I doubt Intel would have pushed 6 core 12 thread CPUs down to mainstream pricing if not for Ryzen. I also think Intel got so complacent for so many years that they will have to make a real effort now due to having at least some competition.

This will be the year for us to see what Intel will bring to the GPU market. If they deliver a competitive stack at a reasonable price and proper driver support and there aren't major shortages causing retailers to price gouge then we may see Intel revenue and profit continue to climb.

 

[notb]

Source was metioned in an earlier post: Link to source

OK, sorry.
You're looking at operating income. It's not the "income" a company actually earns. You should look at NET INCOME (or at least income before tax).
Operating income is lower because of higher cost of sales (manufacturing costs). This is fully mitigated by gains in equity investments.
These may be connected. I can tell you later when I check the full statement.

AMD needs to keep giving away their top tier server CPUs which are head & shoulders above Intel for many years to come to develope their working ecosystem and for the corporate upgrade cycle to kick in.

Thing is: top server chips don't matter as much as some think. AMD has a huge advantage in the 32+ core range. But it's actually quite even down the line.
Intel asks more, but gives more in return (in support, software, supply stability etc).
Once put in a large server, the price difference becomes less significant.

AMD will win customers that can benefit from high core density: supercomputers, some datacenters etc. It's already visible.
But if you're in a market for a typical 2 x 10-20 core rack, Intel remains the better (safer) choice.

I guess I just have a lesser opinion of the average customer than you. The vast majority are hardware tech illiterate imo and they look at the huge offering of desktops, laptops and servers with Intel CPUs and the small offering with AMD CPUs from the big manufacturers and they consider the last couple of PCs they had with "Intel Inside" that were good PCs and they go ahead and buy Intel again.

Just because you're fascinated with PC hardware doesn't mean everyone else has to be. You having "lesser opinion" of them doesn't matter. And is just sad, really.

Yes, most computers are bought by people who don't give a rats ass about things like IPC.
Currently AMD has small market share and they're fully focused on "enthusiasts" and "gamers". This may work for 20% market share in PCs.
If they want to grow further, they'll have to sell to other groups as well.

 

[64K]

Just because you're fascinated with PC hardware doesn't mean everyone else has to be. You having "lesser opinion" of them doesn't matter. And is just sad, really.

Yes, most computers are bought by people who don't give a rats ass about things like IPC.
Currently AMD has small market share and they're fully focused on "enthusiasts" and "gamers". This may work for 20% market share in PCs.
If they want to grow further, they'll have to sell to other groups as well.

My post was to someone that believed that if AMD would continue their present upgrade path it would make a large difference in market share. By saying that I have a lesser opinion of the average customer's tech hardware knowledge affecting their buying decisions is not an insult to them it's just a fact just like my lack of car repair knowledge doesn't make me stupid it just makes me ignorant of car parts and repairs.

There's a big difference between ignorant and stupid.

And btw I don't find PC hardware fascinating. I'm not even a tech enthusiast. I just keep up with what I think is important for a gaming rig.

 

[Jawz]

I swear the title of this topic "Where's the Ryzen Effect? Intel posts Record Financials " wasn't called this yesterday when it was posted - it was something more in lines about Intel releases financial year end or forth quarter earnings or some such.
...

"Intel Reports Q4 and Full Year 2019 Financial Results" is what it was titled yesterday. I also noticed the story was up for almost an hour with zero comments. Maybe that had something to due with the switch to the current title.

 

[Smartcom5]

All I can think of which explains the jump in revenue and profit, is, that they're able to auction off their CPUs in batches towards Cloud-providers & Datacentre-clients – as those are like pretty eager to get their share of CPUs-volumes (to compensate for all the impacts of those various security-flaws) and desperately enable Intel to sell their newly Limited Edition™ SKUs to the highest bidder (whoever can afford to pay enough to be supplied with those).

Everything else makes no sense, as they had to slash prices by half to counter AMD, sell actually less actual volume of SKUs due to supply-constrains while even expanding their fabs' production-volume (which doesn't come free of charge, right?) and at the same time spending +13B on buybacks again to stabilise their stock.

Its either this, or something else we don't know right now (and probably won't anytime soon) of how they print money by actually selling less for half the money.
It's like they invented some money printing machine elsewhere … Magic!

Smartcom

 

[notb]

Everything else makes no sense, as they had to slash prices by half to counter AMD

Prices were halved in the HEDT segment which is (a rough guess) maybe 0.1% of their revenue.
Server chips didn't drop that much (they sell everything anyway).
Mobile SoCs probably haven't moved a bit (up, if anything).

sell actually less actual volume of SKUs due to supply-constrains

?
Supply-constrains mean they can't make enough CPUs. In other words: they sold at least as much as before - in wafers.

Volumes are down because they had to move to larger chips.
E.g. a 6-core Coffee-lake is roughly 20% larger than 4-core, i.e. you're making roughly 17% dies less (and you lose a bit more because of wafer shape and quality control).

at the same time spending +13B on buybacks again to stabilise their stock.

I'm not sure what you mean here...?

 

[candle_86]

Just fyi the average buyer shops on price, they say this is my budgetwhat do you have in that price range.

 

[R0H1T]

Server chips didn't drop that much (they sell everything anyway).
Mobile SoCs probably haven't moved a bit (up, if anything).

Nope Intel is giving deep discounts in the server space, heck they did just this recently!

EPYC Pressure: Intel Discontinues Some Cascade Lake Xeon Models, Slashes Pricing on Others

Supply-constrains mean they can't make enough CPUs. In other words: they sold at least as much as before - in wafers.

As compared to what exactly, don't think anyone has answered that from Intel? We know Intel artificially limited the supply in DIY market to boost their presence & commitments in the OEM, enterprise pace. They could just be doing some accounting BS to peddle this notion that their products are still in high demand & supply constrained.

Volumes are down because they had to move to larger chips.

Yes & yields, because they're also moving to 10nm. I bet no one had any idea how supply constraints could have anything to do with that

Live & learn I guess

 

[notb]

Nope Intel is giving deep discounts in the server space, heck they did just this recently!

Just some models that don't sell well. If they don't sell well, the (probable) loss is minimal.

Also, it did occur to me that something may not be as obvious as I though.
You do understand that companies offer discounts to sell more, right?

We know Intel artificially limited the supply in DIY market to boost their presence & commitments in the OEM, enterprise pace.

I seriously don't understand that sentence (the OEM idea).

Also, Intel isn't "artificially limiting supply". Intel is a private company. They can sell as much as they want. If they think that selling fewer items for more money will provide higher profit, that's what they will do (and what they should do). And, clearly, it worked.

They could just be doing some accounting BS to peddle this notion that their products are still in high demand & supply constrained.

And what would be the reason to do that? Assuming their CPUs haven't been in high demand (which we know from the results to be false), why would they want to convince us it's the opposite? What was there to gain? Last time I checked, CPUs weren't collector items.

Yes & yields, because they're also moving to 10nm.

Yes, and yields. This is likely one of the reasons for higher cost of sales (but not a dominant one).
But than again: I doubt they made that many 10nm CPUs in 2019. Mainstream Ice Lake laptops arrived in November.

 

[B-Real]

Fantastic result! It's so good to stick to not developing newer and more modern CPUs just because I get the financial result LOL.

 

[R0H1T]

Also, it did occur to me that something may not be as obvious as I though.
You do understand that companies offer discounts to sell more, right?

The discounts are there across the entire stack, you just have to have a number from AMD & they'll do the rest. The news item I linked to just shows they they had to kill this artificial segmentation at the top.

I seriously don't understand that sentence (the OEM idea).

I've posted this multiple times, but here we go again ~ Intel cuts off DiY desktop processor supply chain
They have a presence in OEM & Enterprise space not only because of their superior support, which I admit AMD cannot match at this point, but also because of the rebates & $ they spend on marketing & promotions. Basically they've been paying for their sales, now more than ever.

And what would be the reason to do that?

How do you suppose we can explain the discrepancy in the demand in DIY market, which has plummeted whether you agree with it or not, & the total consumer segment sales? Yes, notebooks are a thing but over the last year or two I've seen more Atoms (Pentium Silver, Bronze?) as well as Pentiums & Celerons being sold than the previous years. Way more in fact, the number of devices I've seen spring up over here is substantial & did I mention they come with HDD
IIRC their volumes are down across large segments & they're compensating for it by selling the i9 - which are still popular in the desktop space - besides the high(er) end i7 in the notebook market. I know I'm upgrading to an i7 or R7 next up & there are quite a few people I know who've taken to gaming laptops, in part because DIY parts aren't so cheap over here.

Yes, and yields. This is likely one of the reasons for higher cost of sales (but not a dominant one).

You misunderstand, I'm saying the (10nm) yields plus the move to larger dies, is creating an artificial scarcity of chips - which they're peddling as "greater" demand than ever before!

 

[RealNeil]

It doesn't matter to me what the numbers are. Intel is still the 800-pound gorilla in the room, and AMD is still the underdog.
Yes, AMD is cracking the whip on Intel, and I personally hope that it goes on for a good, long time.
But I can't see Intel rolling over and playing dead either. Look for plenty of innovation and competition in the future.

 

[notb]

The discounts are there across the entire stack, you just have to have a number from AMD & they'll do the rest.

We really don't know how much Intel asks from OEMs.

We have the official results. Clearly: revenue is stable, ASP is at least stable if not up. There's really nothing to discuss here.

They have a presence in OEM & Enterprise space not only because of their superior support, which I admit AMD cannot match at this point, but also because of the rebates & $ they spend on marketing & promotions. Basically they've been paying for their sales, now more than ever.

Well yes, they prefer to sell to OEMs. What's wrong with that? It's a more stable and cheaper channel.
You seem to think DIY is some dream market that they should cherish and pat on the back. If it's not profitable, they'll give more of it to AMD. Simple as that.

Also, I still don't understand why Intel is bashed for rebates and AMD is praised for break even pricing (even cheered to try dumping just to get traction )

How do you suppose we can explain the discrepancy in the demand in DIY market, which has plummeted whether you agree with it or not, & the total consumer segment sales? Yes, notebooks are a thing but over the last year or two I've seen more Atoms (Pentium Silver, Bronze?) as well as Pentiums & Celerons being sold than the previous years. Way more in fact, the number of devices I've seen spring up over here is substantial & did I mention they come with HDD

Honestly, I think we're losing contact. I have no idea what you're talking about.
I don't know what you mean by "you've seen". For example: Atoms are almost extinct.

DIY community is a small part of Intel's customers. You can't extrapolate DIY trends to their whole business.
And I love the "notebooks are a thing" part.

 

[TheGuruStud]

This is an formal financial statement from a major listed company. It's audited by many authorities. Figures are solid and checked down to a single USD.


It's not a dent if they've managed to mitigate that with higher prices.
If anything, it's even better...

It was a very good year for Intel. End of story.
Numbers don't lie, but anti-Intel crowd will be nitpicking like they usually do. And of course they're allowed to do so.

And? Disney buys tickets to make their movies look good (multiple levels of fraud) and is rumored to be lying about profits for 6 yrs, now lol. Hollywood claims multihundred million dollar movies as financial failures (impossible with budgets a fraction of earnings).

You absolutely can manipulate earnings. A known criminal isn't trustworthy in any respect.

 

[R0H1T]

I don't know what you mean by "you've seen". For example: Atoms are almost extinct.

This is where I hate to break it to you, but you're totally wrong & yes Tremont, Gracemont, Gemini lake & even the more Anemic Apollo lake are all Atom cores & they're not extinct by a longshot. Did I mention the Atom zxxx chips that were being shoehorned into tablets 3 or 4 years back?

Source