Advanced Micro Devices, Inc. Is Still a Terrible Business

Last week, struggling chipmaker Advanced Micro Devices, (NYSE: AMD  ) reported its second straight quarterly profit. For Q4, it managed to post adjusted EPS of $0.06, a penny ahead of the average analyst estimate. That was also a big improvement from AMD's adjusted loss of $0.14 in Q4 of 2012.

However, investors shouldn't get too excited. AMD is still one or two bad quarters away from a serious liquidity crisis. Moreover, I continue to believe that over time, AMD will be left in the dust by top rivals Intel (NASDAQ: INTC  ) and NVIDIA (NASDAQ: NVDA  ) in the CPU and GPU markets, respectively.

AMD intends to counteract these headwinds by rapidly growing sales of semi-custom and embedded products. However, these chips carry much lower gross margins, which may not be able to cover AMD's operating expenses without improvements elsewhere in its business. Unless AMD's margin profile starts to improve, I would recommend avoiding the stock.

The bright side of things
AMD's management appears to be pleased with the progress of the company's turnaround plan. CEO Rory Read highlighted its 38% year-over-year revenue jump in Q4 and projected continued revenue growth and positive earnings for 2014.

AMD's revenue growth was primarily attributable to the launch of the PlayStation 4 and Xbox One game consoles during the quarter. Combined, Sony (NYSE: SNE  ) and Microsoft (NASDAQ: MSFT  ) sold more than 7 million units in the first two months, driving a sales spike for AMD's semi-custom chip business.

There are some other bright spots, too. The company recently released a new line of GPUs, which are helping AMD stabilize its market share vis-a-vis NVIDIA. AMD has also won a significant amount of business from Apple (NASDAQ: AAPL  ) recently. Most notably, the new Mac Pro uses AMD professional GPUs. That's a good sign, considering that NVIDIA has historically dominated that market segment.

Trouble under the surface
In spite of these achievements, AMD faces some fundamental problems in the near term. First, the semi-custom chips that are driving AMD's revenue growth are low-margin products. This caused non-GAAP gross margin to contract from 39% in Q4 2012 to 35% last quarter.

This lower gross margin profile would be acceptable if AMD could expect to "make it up in volume." However, following the initial spike in game console demand, sales are expected to level out. As a result, AMD is projecting a 16% sequential revenue decline in Q1 -- which would be worse than the typical seasonal trend -- while gross margin will remain at 35%.

Second, AMD's rebound in the GPU market may be short-lived. Right now, it's benefiting from the timing of the product cycle; NVIDIA released its first Kepler GPUs nearly two years ago. However, NVIDIA will start releasing GPUs based on its next-generation Maxwell architecture during 2014. This will provide a performance boost that will shift the competitive balance back in NVIDIA's favor by the end of the year.

The real problem
While AMD will face some near-term challenges in generating meaningful earnings, the longer-term story is much more troubling. In order to cut costs, AMD has been slashing R&D spending, which is dangerous at best and suicidal at worst.

AMD Research and Development Expense (TTM) Chart

AMD Research and Development Expense (TTM) data by YCharts.

As the chart above shows, Intel and NVIDIA have significantly boosted their R&D spending in the last five years. Meanwhile, AMD has cut its R&D budget by a third. Intel's R&D budget already dwarfed AMD's, and that gap is growing wider every year. Meanwhile, NVIDIA's R&D budget has overtaken that of AMD.

AMD Research and Development Expense (TTM) Chart

AMD Research and Development Expense (TTM) data by YCharts.

In 2014, AMD will reap the benefit of its previous R&D spending while saving money in the present day due to its recently executed cost cuts. However, in a few years, it will be relying on today's R&D work to generate competitive products. I'm very skeptical that AMD will be able to take on Intel, NVIDIA, and other chipmakers on its current shoestring budget.

Foolish bottom line
CEO Read has stabilized AMD's financial position for the time being, but the company is living on razor-thin margins with a weak balance sheet. That doesn't leave very much room for error.

Meanwhile, other chipmakers are vastly outspending AMD on research and development. This puts AMD's long-term competitiveness at risk. It's certainly possible that AMD will manage to walk this tightrope and release good-enough products on a much smaller R&D budget, but the chances aren't good enough to justify investing in the company.

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  • Report this Comment On January 27, 2014, at 3:51 PM, TMFAeassa wrote:

    Great article, Adam.

  • Report this Comment On January 27, 2014, at 4:23 PM, TMFGemHunter wrote:

    Thanks, Ashraf.

    Adam

  • Report this Comment On January 27, 2014, at 5:35 PM, gs1217 wrote:

    Your Points:

    AMD is Profitable

    AMD has the exclusive on MAC, XBOX ONE, and PS4. Billions of profits for years to come.

    Intel only has the PC left, a dying marketplace.

    Intel had a major loss.

    AMD goes leaner and you call it dangerous/suicidal.

    You prefer Intel???????

    I do not agree.

  • Report this Comment On January 28, 2014, at 7:16 AM, longjcptoppick wrote:

    AMD downgraded 1.00 target JP MORGAN

  • Report this Comment On January 28, 2014, at 9:29 AM, aylard82 wrote:

    I think everybody should stop hammering AMD.

    There are many reasons why this company will surpass nvidia and intel and why their profits will get bigger over time

    1)They dominate the next gen consoles(nintendo wii is not even considered since it did not sell), PS4 and XBOX 1 sales are contained for 2 reasons, 1 is that ps4 is not out in japan yet, 2 is that there are not enough good titles now to justify new consoles, from march onwards good titles and exclusives will come out and the market will open to japan too, more profits to come, contrary to what analysts predict(ignorant analyst that prep the market for the banks and institutions)

    2)The PC business is dying, common people will generally prefer console environment, so the PC segment is left with PRO gamers that stick with nvidia and business companies(for which amd has a good holding with ARM). The common people will keep buying amd cheap components to play simple games, pro gamers use nvidia and they are a niche. This is why they didn't profit and that's why they are shifting their business model from PC to Server business,consoles and tablets.

    3)With the memory share from their CPU+GPU program they are bound to offer cheaper tablets and smartphones, so instead of buying 2 expensive components now companies can look for AMD to increase their gains by paying less to manufacture tablets and smartphone.

    4)JP Morgan set 1.00 target so it will go up. Never trust a gold miner telling you where he mines his gold

  • Report this Comment On January 28, 2014, at 11:15 AM, BigAl1825 wrote:

    So, Xbox 1 and PS4 have sold a combined 7 million units, buoying AMD's Q4 profit.

    Combined, Xbox 360 and PS3 sold ~160 million units. Let's use this as a baseline.

    7/160=4.4%.

    So AMD still has potentially >95% of the profits to still gain from chip sales in these devices, alone, even if they are low margin. That's 21 quarters worth of sales similar to what they reaped in Q4, more or less, depending on similar numbers of consoles sales as in past years, and subject to the vagaries of seasonal variation of console sales and release of updated hardware.

    Given the (apparent) early success of both systems, that's a steady source of income for AMD, before considering their GPU and server side business.

    So when do they become a terrible business?

  • Report this Comment On January 28, 2014, at 11:25 AM, markstomarks wrote:

    This is a nonsense subjective based opinion article far away from objective facts so I'll toss my ten cents in of opinions.

    AMD is a great company. Don't believe me, check your computer system and find Advanced Micro Devices installed in it to ensure it runs properly per your lovely laptops.

    AMD, I started traded when the stock was first listed and am now invested in at at five year lows and above that level as high as $4 or so.

    AMD is a turnaround story and just last month when all these articles here were bashing BBRY, I stated clearly it was going to at least $10 per share SOON and it did of course an then some. I sold of course and took profits.

    AMD is not going to zoom to double digits that fast but it is going to $7 by spring which is a double from here, double digits by end of year and $20 in 2015 so I'd call that a great investment.

    Debt is long term and can be paid off if needed so forget debt.

    Earnings are IMPROVING compared to last year.

    The company is becoming a lean diversified company and will continue down that great road in the next five years as it reaches $50 per share by then. AMD was once great and will be so again while APPL that I paid a couple bucks for back in the 90s has seen its best days so forget that one for investment and think of it as a trading stock from now on with GOOG becoming the big one that lasts.

    IBM is still and will continue to be the best company traded in the market and will be traded a hundred years from now so that is the one to invest in for kids, grand kids and future generations.

    AMD is a great company the next 20 years unless some smart company slips in and buys it out for some cheap $12 per share this year but that is still a huge profit but continue more bashing as shorts get desperate since smart shorts covered in December and reduce count by 20% while idiot shorts who always lose money are still short and will go broke and in debt as always.

    JMO

  • Report this Comment On January 28, 2014, at 11:30 AM, KenLuskin wrote:

    SIGNS of a PARADIGM SHIFT in COMPUTING that are leading to a TIPPING POINT for AMD

    Malcom Gladwell, in his book, The Tipping Point: How Little Things Can Make a Big Difference, defines it as “the moment of critical mass, the threshold, the boiling point,” where “ideas and products and messages and behaviors spread like viruses do.”

    Think of a Paradigm Shift as a change from one way of thinking to another. It's a revolution, a transformation, a sort of metamorphosis. It just does not happen, but rather it is driven by agents of change.

    CPU domination is ending

    Computing has been dominated by a type of processor called the CPU, or central processing unit. The processing of information is based upon one logical computation after another in a sequence. It is called threaded, much as a needle leads a thread to a logical endpoint, and then a new thread is started.

    But, the real world presents so much information in the form of light rays hitting our eyes, and sounds to our ears, that using a CPU to process this info is extremely inefficient. This type of processing requires numerous computations to be all done simultaneously, rather than sequentially.

    For the purposes of processing real world information, parallel processing was invented. Many CPUs are strung together, and this forms a supercomputer, that can do parallel processing. That means it can simultaneously process a huge amount of information.

    The GPU is BORN

    Finally in the late 1990s, a new processor was invented for massively parallel processing. These processors are called GPUs, for graphical processing unit. The first uses of GPUs were and still are graphical information. The main current use of GPUs outside of accelerating the speed of a supercomputer, is for rendering digital images.

    Instead of a CPU drawing one dot, or pixel at a time on a screen, a GPU creates all the pixels at the same time. Without a GPU, the rendering of digital images is extremely inefficient.

    GPUs have been mainly used to create digital images for video games. A program is created that tells the GPU what to render.

    AAA video gaming is a significantly larger industry than Hollywood. Most of the highest grossing video games cost more to create than the average Hollywood movie. The vast amounts of money spent on the video game industry are the driving force in funding the development of GPUs. It is no coincidence that the 2 leading GPU design companies are the main suppliers of discrete GPU graphic cards for PCs.

    THE FIRST SIGN: GAME CONSOLES

    AMD used their 64 bit X86 CPU architecture to create an Accelerated Processing Unit, or APU. The APU is AMD’s way of uniting a CPU with their own proprietary GPU architecture, onto one die or chip. Intel, Qualcomm, Nvidia, etc. also have a GPU integrated onto a single chip, which is called an SoC, or system on a chip.

    AMD’s APUs are 64 bit, combined with significantly greater GPU power than Intel has, is the reason that Sony and Microsoft chose them to power their new game consoles. Because the only other major game console maker, Nintendo, is also using AMD Graphics, AMD has total domination of the AAA video game GPU architecture.

    Almost all new AAA video games are optimized for the game consoles, and then ported over for use on a PC. AMD worked closely with Sony and MSFT to create application programing interfaces, or APIs, that would be much more efficient than the API that is currently used on PCs. The APIs on the new Xbox1 and PS4 allows video game developers to send commands directly to the GPU portion of the AMD APU, rather than to be first sent to the CPU. These APIs reduces the need for a super fast CPU, while increasing the overall speed that can programs can be rendered. AMD’s GPU architecture is different from that of Nvidia and Intel. Because all new AAA video games will be optimized for AMD architecture, they will run better on PCs using AMD GPUs.

    THE SECOND SIGN : MANTLE API

    The speed of the processors is measured in GigaHertz, or GHz. While the CPU portion of the AMD APUs are running at 2GHz or more, the GPU portion is running at 1 GHz or less. The equivalent of the console APIs was created by AMD for PCs, and is called MANTLE. If a game is NOT designed using the Mantle API, then the commands must first be sent to the CPU, then relayed to the GPU. Therefore, a slightly faster CPU will increase the speed of the game. Because of this situation, many hardcore gamers chose to buy a faster CPU from Intel.

    Now, that ALL new games will be created for the new consoles, most developers will choose to use the Mantle API when they port over for play on a PC, to replicate the experience on the consoles.

    AMD has reported that 20 new games, which is the bulk of the new AAA games this year, will be supporting Mantle.

    One of the most successful AAA game franchises is called Battlefield, and their newest game Battlefield 4, is reported to run 45% faster when using Mantle.

    The MANTLE API is the main reason that AMD has indicated they have more than 50% of the design wins for discrete GPUs in Laptops that will be released this year. Laptops OEMs know that they will be at a competitive disadvantage if they use Nvidia discrete GPUs, after it becomes widely known that new AAA games will run significantly better on AMD GPUs.

    THIRD SIGN : MICROSOFT and ORACLE SUPPORTING HSA

    AMD created the HSA foundation to share some of their APU architecture with the rest of the chip industry so as to make it an open standard. AMD’s APU architecture was so compelling that they were able to enlist ARM Holdings, SAMSUNG, QUALCOMM, and TEXAS INSTRUMENTS as founding members of the HSA foundation. The reason that AMD and these companies are supporting a new open standard for chip architecture is so the large operating systems and software developers will also support it. But, AMD is the largest beneficiary of the HSA architecture, which is in the chips powering the MSFT and Sony consoles, but also in their newest PC chip called KAVERI.

    HSA architecture in Kaveri allows Operating systems and programs direct access to the GPU portion, and allows the GPU and CPU to share a common memory. This allows the power of the GPU to be more easily accessed by common programs, and increases the efficiency of the chip, because of a shared memory.

    In general, a GPU can produce 5 times as many Gigaflops as the CPU. So, while not all tasks are suited for the GPU, there are many that are now being handled by the CPU which could be much better processed by the GPU.

    Hardware, such as a microchip, greatly benefits from the amount of software supporting it, which creates an ECOSYSTEM

    The success of Intel is mostly based upon the fact that Microsoft chose to optimize MS DOS/Windows operating system for Intel’s X86 architecture.

    The success of ARM is because Apple and Google created mobile operating systems that support its CPU architecture.

    AMD already has all 3 game console makers using its GPU architecture. Which means all the new AAA games are being optimized for AMD architecture. The creation of the MANTLE API will translate AMD’s console GPU domination over to PC gaming.

    Support for AMD’s HSA foundation architecture by Microsoft and Oracle, is a good sign that other software will also be optimized to support it.

    FOURTH SIGN: THE NEW ERA of COMPUTING REQUIRES MORE GPU PROCESSING POWER

    The new era of computing is based upon computers processing real world inputs, rather than relying upon programs or input from a keyboard. This video December 2013 Embedded Vision Alliance Member Meeting Presentation: "The GPU’s Role

    in Vision Systems," Dr. Jon Peddie, Jon Peddie Research

    is 50 minutes, but it is well worth watching, if you really want to understand what I am trying to convey.

    The new era of computing requires the massive parallel processing power of a supercomputer, but at an affordable price for the average person.

    Because the GPU can process vast amounts of information at 5 times the power of the CPU, it will be increasingly relied upon, rather than CPU.

    Efficient voice processing is mainly done in the cloud because of the massive processing power required. But, since all computers, even smart phones have integrated graphics, other less complicated tasks can be done on the device.

    The AMD powered Xbox1 has powerful sound and vision recognition. The Xbox1 has infrared vision, which means it can see in the dark! The Xbox1 can recognize and differentiate between people based upon their voice, and where they are sitting or standing in a room.

    CONCLUSION

    While Intel is charging $300 for their core i7 chip, AMD is charging MSFT $100 for the APU that powers the Xbox1.

    AMD’s APUs have powerful integrated graphics at an affordable price, which is why they are positioned to dominate in providing processors for the new era in computing.

    The new era in computing is a classic paradigm shift. Cloud computing and increased wireless communication bandwidth are already recognized as the driving forces in this paradigm shift.

    Increased use of the GPU is not yet recognized by most investors as a paradigm shift in computing.

    A huge opportunity exists to invest in AMD, before the trend becomes more apparent, resulting in surging sales and earnings.

  • Report this Comment On January 28, 2014, at 11:36 AM, bluesky64 wrote:

    Adam,

    You should read Ken post again,

    and go long.

    Ashraf is blind with anger this emotion will crush the nay Sayers.

  • Report this Comment On January 28, 2014, at 11:40 AM, headcloud wrote:

    Continue shorting the stock... while true traders keep on buying. AMD may still look weak for now... but wait the new kaveri APU, GPU in macbook, APU in XBox 1 and PS4 , wait until PS4 is launch in japan. The same thing last day some firms bashed on Sony just before the lauch in Japan for the PS4 wait and see i see Sony stock jump 5-10% the week it lauch. JPM rate as 1.00 is a joke they want you still short the stock so they can buy low. I would worry more if i'm long NVIdia and INTEL, because wait and see even with 2.5B$ marketCAP, AMD is a real threat. David against goliath, but still seems Goliath as some weakness... the changes as come AMD is an undervalued stock that will explode in the years to come... i dont expect a 20$ stock but that just double my amount i put in would be fine,but time has changed no other opportunity to long AMD at a cheap price i tell you ... ;)

  • Report this Comment On January 28, 2014, at 11:49 AM, keeperoftheq wrote:

    Funny how this writer does not report why AMD revenue will be down 16%. Apple mac pro had assembly lines problems that need resolved. That is way the Mac Pro is back ordered until March. If this did not occur, the decline in revenue world have be less than half of the projections. This problem should be taken care of by Q2.

    He also ignores that all of 2014 will be profitable. many mew products are coming out using AMD. When mantel is launched, that will also help.

    What does this writer call a slow down in game console sales. In 2014 about 33 million Xbox one and PS4 are to be sold. That is not a slow down.

    What we have here is another classic Motley Fool writer who owns the competition and wants to bad talk AMD in order to promote NVDA. Most if his trashing AMD is without cause and very misleading.

  • Report this Comment On January 28, 2014, at 12:03 PM, bluesky64 wrote:

    Adan,

    My personal invitation Please join

    AMD at Open Compute 2014

    AMD to Keynote at Fifth Annual Open Compute Summit 2014

    AN JOSE, CA--(Marketwired - Jan 27, 2014) - AMD (NYSE: AMD)

    WHAT:

    AMD (NYSE: AMD) today announced that Andrew Feldman, corporate vice president and general manager, Server Business Unit, will keynote at the Open Compute Summit.

    AMD's presence at the Open Compute Summit also includes an exhibit of new server technologies at its booth (A7) located in the San Jose Convention Center.

    DATES:

    Jan. 28, 2014 at 11:00 a.m. Pacific, 2:00 p.m. Eastern

  • Report this Comment On January 28, 2014, at 12:51 PM, jwtrotter wrote:

    "Ashraf is blind with anger this emotion will crush the nay Sayers."

    Talking about 'The pot calling the kettle black'!! Yeesh, bluesky & kenluskin . . look in the mirror.

    At some point, you will need to face reality, not your version of reality which really is total immersion in the world of desperation and self-delusion.

  • Report this Comment On January 28, 2014, at 1:37 PM, chessplaya wrote:

    ask yourself this... how does a turnaround occur?? If you ask me AMD is the best example out there, 2 consecutive profitable quarters, Seattle coming... might get a hint of it later today.... consoles selling in international markets... China possibly later in the year.. idk about diminishing demand, AMD is moving away from having computing solutions be the main source of revenue, the turn around plan has executed wonderfully for the first 2 parts, we are living the third part now and i believe AMD will succeed at completing the turnaround strategy. AMD has acquired the right stance and it has positioned itself in the right places i like the 2014 outlook.

  • Report this Comment On January 28, 2014, at 2:16 PM, kkuteyi wrote:

    A foolish article again. He is a trader and not an analyst. He contradicts everything about AMD just to interfere with free market economy.

  • Report this Comment On January 28, 2014, at 5:02 PM, osauer wrote:

    Adam,

    "AMD is still one or two bad quarters away from a serious liquidity crisis. "

    What is your rationale behind this statement? They have cash in line with their business expectations and a 500m revolving credit on top.

    A liquidity crisis would happen if they massively increase revenues within the next quarters, which contradicts your recommendation not to buy this stock.

  • Report this Comment On January 28, 2014, at 6:11 PM, acemedic wrote:

    A few things I find interesting about this article. (The killer is #3)

    1. The advertisement directly following this article tried to sell me on three stocks for early investors in Cloud Computing. AMD has just knocked out sales with Verizon, which is moving into the cloud computing/server platform... Go figure. The author would want me to believe that this would be a bad move, but the Fool is trying to get me to spend money to find out how to invest in it more. Just an interesting coincidence.

    2. NVIDIA just overtook the R+D total spending price tag, yet their stock is trading 5x AMD's. NVIDIA hasn't traded in the $3-4 in the last 5 years... In 2009/2010, NVIDIA EPS was negative, and the stock was still trading 2x the current share price of AMD.

    3. This was a very narrowly focused article. All about R+D spending. Here's the bottom line for why I'm ok with the R+D spending being "down." AMD has just released 4 new things here in the tail end of 2013. Kaveri (new APU), Mantle (new API), Jaguar (custom console APU) and Hawaii (new GPU). All of these were late 2013. While I understand that the company needs to continue to research and stay on top of development, these products have now hit the market, which is going to help deliver sales. Annual sales for consoles peak between the 4th and 6th year of the life cycle. The R+D is already spent for this and doesn't need to continue. Luskin's comments above were spot on as far as console sales go, so I won't rehash that, but it just appears that all the other chip makers were asleep at the wheel while AMD slipped in the back door and swept the sales on all three consoles. This alone is going to help keep the company cruising through any CS negative cash flow.

    NASDAQ just released some new info for 1/15/14. Days to cover dropped from 9 to 3.5. Short interest went up 100k, but I'd be willing to bet you will see short interest start to wind down. Interesting to watch small blips daily where very large volumes are being sold at once, which would lend me to think that institutional investors are relieving themselves of their shares that covered their short squeeze, and probably covering their short positions as well. If my theory is proven in 15 days by the release of the last half of January data showing a drop in short interest, then you'll also be seeing the share price go up in Feburary consistently.

    Disclosure: I'm long AMD. Send me $0.01 every time you read my comment, by clicking on my user name and emailing me, and I'll give you my address to send my commission.

  • Report this Comment On January 29, 2014, at 8:25 AM, AnkurVarsheny wrote:

    Infuriates me when non-technical people write articles about technology company. And there is this monkey ashraf whose knows nothing praising the article.

  • Report this Comment On January 29, 2014, at 11:04 AM, MAP1288 wrote:

    I think most smart investors are smart enough to see through the bs of Adam and Ashrat. They literally move the needle 0%. What gets me is that these guys clearly don't see the big picture in terms of their careers. They both come across as small-time bashers. There is certainly nothing wrong with critical analysis, but these two both come across with big-time agendas when referring to AMD. That is EASY to see, and it is why they will never get any respect as hopeful journalists. If I were in the profession, I'd certainly try and establish myself in a different manner.....but then again, I'm a big picture type guy......Anything these two fools say is worth less than .01.

  • Report this Comment On February 09, 2014, at 5:52 PM, BlkZ06 wrote:

    Maybe AMD will get a deal with Apple after all in the near future. Doesn't AMD have Globalfoundries as an arm that makes wafer products? Apple will finally find their chipmaker for their upcoming newer iPhone. Any thoughts?

  • Report this Comment On March 03, 2014, at 6:17 AM, markstomarks wrote:

    Funny opinion subjective article which means it is time to be loading the boat on AMD.

    If the article were pumping AMD along with others, I would have already sold.

    Good luck everyone. Those who miss out on AMD going up 400% which it will imo can wait around for ten cent wireless electricity companies to buy and sell at a hundred bucks a share like I did 3D printing and of course paid about 2 bucks a share for Apple but dumped that since GOOG is a better company.

    JMO and have fun selling AMD. Be sure to sell to me. Do that with ANR too.

  • Report this Comment On April 08, 2014, at 5:35 PM, RCM0102 wrote:

    Since when is getting your partners to pony up the R&D expense a bad thing?

  • Report this Comment On August 07, 2014, at 1:10 AM, rav55 wrote:

    IN actual fact, AMD spends more than Intel in R&D spending in terms of R&D expense per market cap.

    AMD spends about 30% of it's market cap annually in R&D spending. Intel spends less than 10% or it's market cap in R&D spending.

    However it is not the amount of money actually spent that determines success but rather the quality of the R&D actualised. One could say that AMD does better with what it spends than does Intel. Intel is scared to death of AMD!!

    AMD has answered quite nicely the age old question of quantity vs quality.

    Moving forward, if AMD continues to grow then one would speculate that it's R&D spending will increase with that growth.

    Furthermore AMD is reporting sales about 1.4x it's market cap while Intel's market is about 1.5x it's sales. AMD is doing far better than Intel in term of sales for the size of the company.

    The only fly in AMD's ointment is debt. And that is being managed quite nicely.

    AMD IS competing. AMD is firing on ALL 8 CYlINDERS! They are releasing CPU's, GPU's and APU's that challenge Intel and nVidia to do better.

    Despite AMD's small size, they are releasing the best APU on the market. Intel can not compete with AMD in graphic quality.

    AMD and nVidia are trading the market lead AGAIN in the HPC GPU space.

    AMD R&D is alive and well. It is well suited for a company of it's market cap. Could it be bigger? Of course.

    Is it smaller than Intel's R&D budget? Well of course it is.

    But the big questions remain unanswered!!!

    Why, despite AMD's diminuitive R&D budget is Intel so afraid of AMD? Intel is quaking in their boots.

    They dump silicon in the ARM mobile market to the tune of $BILLION$ losses just to keep AMD out!

    Why are Intel pumpers so afraid of AMD?

    ARM servers on the horizon has Intel and Intel pumpers scared to death!!!! AMD is not the ONLY ARM suppliers either. The attack on XEON is a coordinated three prong attack and it is going to get bloody when Intel losses market share in servers!!

    And the final question?

    Did Ashraf Eassa write this!!! RTFLOL

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