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Advanced Micro Devices, Inc. Message Board

  • amdsuicidewatch amdsuicidewatch Mar 22, 2008 1:19 PM Flag


    Layoffs . . .
    Ed Stroligo - 3/21/08

    AMD is on the verge of layoffs, despite silly AMD PR "denials".

    This isn't surprising at all, though the reasons for doing this now might be:

    1) So long as the current crisis in the financial markets continue, AMD is cut off from conventional financing. This is not news nor revelation, AMD's financial officer implied that at the conference call in January. Less conventional financing is also likely to be on hold under current jittery market conditions; the Abu Dhabi investors are still down 50% on their investment.

    2) The plunge of the dollar has added another anchor to AMD's boat. A big chunk of AMD's expenses are incurred in Dresden, denominated in euros. A large chunk of AMD's revenues come in dollars, not just from the United States (which only accounts for around 20% of world CPUs these days), but also from those countries who more-or-less tie their currencies to the U.S. dollar (which includes China, which is about 28% of AMD's market).

    What that means is AMD processors become relatively more expensive to make in dollar terms. Let's say an AMD processor costs 20 euros to make. If the dollar and the euro are worth the same, that means the processor costs 20 USD to make. If, however, the euro is worth 1.5 USD, that means the processor costs $30 in dollar terms.

    A cheaper dollar is no big deal if you can increase the dollar price (i.e. oil), but AMD doesn't have the luxury of doing that. In contrast, Intel has multiple fabs in both dollar and euro-zones, so it can sell CPUs in either zone from fabs with expenses based on that same zone.

    That means AMD makes less gross profits on CPU sales to dollar regions, and cannot cut prices as readily as Intel in those regions.

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    • Hi, yes you read it right. AMD execs seem to be away from the office instead of tending the biz. If you look at the 10-K you'll see that spouses of some of the execs and family members travel along on so called "business trips"

    • "AMD can't make or sell enough high ASP products to offset its fixed costs and fund further R&R...."

      Are you suggesting that AMD faltered because the execs get *TOO MUCH* R & R, or *NOT ENOUGH* R & R? And what kinds of R & R is AMD funding? Trips to Oahu? Fiji? Or just country club memberships?

      I'm lost!

    • Layoffs are everywhere, Citi bank and alot of other financial institutions in additon look what went on with Bear Sterns. Every sector is having layoffs m so even if AMD is having layoffs it's not isloated

      • 1 Reply to rjxq9
      • I will not speak of layoffs at AMD other then to say that if the layoffs occur it will be a full year after the analyst demanded AMD to cut cost. Hector for every CC from Q1 2006 answered with a stock, "AMD will not cut its way into profitability."

        Now with AMD's server share down to 14% today when compared to 23% at the time of the first questions about AMD cost, you would have to say some of the server folks are redundant and can be let go till things turn around for AMD's server division. As far as the PC segment that division is spinning its wheels, while Pluscard may say that AMD has gained market share in that division the cost of that market share is very steep and a smart company would create shortages in that market not create more chips that flood an already depressed market for AMD.

        Now ATI layoffs in a basically R&D division would wreck that division unless AMD wants to get themselves out of the discrete graphics card market and stick to integrated chipsets. I know Intel has made a fortune doing just that, so perhaps heads could roll over at ATI, it may hurt for a while but a true AMD/ATI graphic company could emerge from dropping Discrete cards. It can not hurt AMD any more then what AMD has done to ATI already. In a mere 14 months time under AMD control, ATI's share of the graphic business, be it chipsets or discrete, have dropped down to 27% to 33% share, depending upon the source you read, a drop from a 50% 50% split with Nvidia before AMD.

    • you are such a moron!!!!.

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