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Tom Luongo  

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  • New Technology Proving Its Worth For Advanced Micro Devices [View article]
    @Digi "If AMD is ever acquired by another company its x86 license goes *poof*."

    This is true but only in a technical sense. Unless Intel wants to destroy around $100 billion in its market cap they will do no such thing. If Intel were to press this in that situation AMD would not re-up INTC's X86-64 license which expires in in 2015 and that would be that. What is Intel going to do, go back to selling 32 bit CPUs? They don't own the very instruction set the world runs on now.

    Come on. Stop the sand-bagging of the technology. Yes, we don't .know. what enhancements HSA will bring to these applications, but if everyone's working on some version of it then guess what? Everyone needs it.

    The smoke is there so, tip-toeing around the lead AMD has technically is silly. They have it, the experience of building not just 1 (Kaveri) but 2 (Jaguar APUs for consoles) HSA-compliant cores married to excellent GPGPU cores with both DDR3 and GDDR5 memory interfaces and are developing the relationships now to fully leverage.

    Moreover, they have built a similar system to that of Haswell's Crystalwell so they know what the cost/benefit is of that solution for potential semi-custom customers who come knocking.

    To say that the others are developing in this space but then downplaying the efficacy of it is simply disingenuous. Moreover, the lead is both physical and experiential.

    Developers have been frothing at the mouth for the kinds of things that AMD has recently released and the results of what we've seen so far are nothing short of excellent. The only thing holding back this market is Intel's agressiveness in the consumer space where they looking even more ridiculous wrapping Bay Trails in a ten and a twenty and shipping them out to Dell.

    Intel is no less than 3 years behind AMD in this. Period. They don't have a working prototype to even begin testing no less tape out, etc. Knight's Landing is what? 2018?
    Feb 18, 2014. 07:51 PM | 6 Likes Like |Link to Comment
  • New Technology Proving Its Worth For Advanced Micro Devices [View article]
    @Digihound I'm mining on my a10-7850k now while I type this and browse the web. Heck, I ran Word 2013 and Firefox to write this article with the miner running in the background doing 105kHashs/sec at stock 720MHz. That number goes up to 115 if I O/C. Perfectly acceptable results for 512 shaders. My R7 260x only does 200 or so. So, what's your point?

    The point being is that it's there chunking away in the background making me nickels while I can be productive enough to do my daily work without much of a hiccup.
    Feb 18, 2014. 05:58 PM | 3 Likes Like |Link to Comment
  • New Technology Proving Its Worth For Advanced Micro Devices [View article]
    @digihound Thanks for the information. That is useful. But, it makes it even more impressive given the level of compute available as an on-die solution without having to go anywhere else.

    Please look to @techacc's comment below about moving data around in order to work on it. The cost of moving data is 100x more expensive (see IDC link in my article) than the cost of computation. Not having to copy and move data around is a big deal for big data applications that we are only just beginning to see the advantages of.
    Feb 18, 2014. 05:42 PM | 3 Likes Like |Link to Comment
  • New Technology Proving Its Worth For Advanced Micro Devices [View article]
    @Avatar I'd love to quote Anand or any of the other guys but somehow they can't seem to be bothered. This wasn't even that difficult a group of tests to run. and it was done nearly a month ago. So, when the tech press in the states starts doing their jobs I'll be happy to quote them.

    I'm d/ling PCmark 8 myself to test my kaveri rig.

    But, I have a feeling that won't make a bit of difference.
    Feb 18, 2014. 04:44 PM | 14 Likes Like |Link to Comment
  • Markets Still Unclear About AMD's Future [View article]
    @Xtian These are excellent points that kind of got lost in all of the discussion of margins/tehcnology/etc. Simply put the upside market potential for AMD's console APUs at this point is much higher than the stock is forecasting. 2 more quarters of strong balance sheet improvement and technology adoption and that should clear up any misconceptions as to the company's future.

    Personally, July 14 calls in the $4.50 to $6 dollar range offer good value right now and I would be adding to my positions.
    Feb 16, 2014. 12:28 PM | 1 Like Like |Link to Comment
  • AMD's Dual Graphics Will Disrupt Gaming Market [View article]
    @asH9 and Stephen Good comments guys. I saw the HSA results like 2 hours after WccfTech posted then and if I hadn't been busy with other things would have put something up quick about it. There's always Monday. :)

    ARM Server -- Calxeda as a proof of concept company without enough capital to make the transition from 32 to 64 bit and didn't have the pull within the industry. AMD does and that's a differentiator in this space.

    HSA is a game-changer and no amount of talking it down will alter that. I've been bullish on MSFT for a while but unless they truly embrace HSA and multithreaded GPGPU they will be in trouble in how they shift away from Windows/Office licensing revenue. Cui AAPL?
    Feb 16, 2014. 10:27 AM | Likes Like |Link to Comment
  • Markets Still Unclear About AMD's Future [View article]
    @gzubeck And what do you think the semi-custom business is? It's a way to sidestep Intel.

    You neglect to mention in your math example that the lower revenue/higher margin is playing right into the same fight that they've already lost. So, they might make that for one product cycle of 9-15 months. But the semi-custom console wins will bring in that slightly lower income on rising net margins for 5-7 years.

    You are right it's what money you take home as free cash flow that matters. And if those 45% gross margins require 10% more R&D and depreciation over time then where's the benefit. You get the same net income and more risk product to product.

    Don't focus on the company-wide gross margins. That's still in flux. There are still issues with the CPU/APU business that are in transition and keeping profitability on that side of the house down. We'll know how far off they are by the end of Q3 with APU and server sales.

    "It's what you net after expenses not your gross income. Unless your really big and your markets are not perversely affected by Intel at a whims notice then smaller margins can work."

    I agree with this, but this is not the point of AMD's semi-custom work. Intel couldn't provide those console solutions. So, right there is your example of a revenue stream not tied to anything Intel does and it's currently accounting for 25% of AMD's revenue and 90% of its profits. For work whose R&D is done, contracts signed with a predictable work plan and products that are in higher demand than were originally expected.

    What do you not like about that? This type of revenue forgives a bad product launch. NVidia is learning this now with Tegra. The T4 and TK1 are likely never going to be used in their original intended markets. They have shifted to try and recoup development costs by moving them into other applications -- cars, high-end tablets, Chromebooks, etc. But, if they had reusable IP blocks and more flexibly designed architectures they could build versions of those chips for little extra development cost to cater to specific client needs in very little time.

    This agility is the essence of why the gross margins will be lower but the tradeoff is more guaranteed revenue over time. If AMD had two more semi-custom wins like half as big as the Xbox One, this company would be making $0.20 per share every quarter on smaller revenues than NVidia.

    The rest of AMD's business is in flux and has questions hanging over it.
    Feb 15, 2014. 01:54 PM | 5 Likes Like |Link to Comment
  • Markets Still Unclear About AMD's Future [View article]
    @rg Very good comment. Thanks for saying it so directly. I don't see process node beyond 28nm at this point to be the main driver in the near future.... by late 2015? Sure, but in 2014 I think the cost/benefit relative to the market need is too high.

    If I'm worried about anything it is that Carrizo will be 28nm and a H2 2015 part.
    Feb 15, 2014. 11:55 AM | 1 Like Like |Link to Comment
  • Markets Still Unclear About AMD's Future [View article]
    @ta I disagree. TMSC has as much incentive to move to lower process nodes as INTC does as long as the economics make sense. Samsung is too big a conglomerate to compare to Intel. They are different companies. Samsung with its own fabs to build its end-user products makes sense.

    AMD and INTC make second-order goods which are used to build end-user products. Having that opex/capex overhead makes little sense when the cost of implementation is rising exponentially with each node shrink.
    Feb 15, 2014. 06:19 AM | 4 Likes Like |Link to Comment
  • Markets Still Unclear About AMD's Future [View article]
    @Type What Stephen said. We'll see an acceleration of sales for the consoles for the next 3 years while net margins for that business will improve as costs/yields improve.
    Feb 14, 2014. 08:25 PM | 1 Like Like |Link to Comment
  • Markets Still Unclear About AMD's Future [View article]
    @Gzubeck You still don't get it. Gross margin is less relevant to the semi-custom business b/c the business model is different. R&D costs are shared, etc. So, look at the numbers again and see that the semi-custom business is driving ~20% net margins and the cost structure is planned out over a 5-7 year lifespan of practically guaranteed sales. They don't have bad margins on the game consoles. They are the best overall margin products they had in 2013. Look at the earnings report.

    And that comment you quoted was aimed squarely at Kaveri and Beema/Mullins, not the semi-custom business. If those margins do not improve then there is a problem unless Sea Micro/Seattle begin to take off.

    The 2-3 year problems was 2-3 years ago, not as much today. Some don't like the diversified revenue model (Brokeagain73, for example) others embrace it.
    Feb 14, 2014. 08:23 PM | 1 Like Like |Link to Comment
  • Markets Still Unclear About AMD's Future [View article]
    @France I don't. That Newegg is still selling them above MSRP and TigerDirect was out of the 7850k the other day doesn't look bad, though.
    Feb 14, 2014. 06:05 PM | Likes Like |Link to Comment
  • Markets Still Unclear About AMD's Future [View article]
    @Stephen No, you're right and this is part of where the volatility comes from. For those of us in the bull camp the point of the article was to use the volatility to our advantage while the market catches up. If Read bring this all together, $500 million will be peanuts.

    Q2 and Q3 will tell the tale as to whether the market is buying the chips AMD is selling or not.
    Feb 14, 2014. 06:03 PM | 2 Likes Like |Link to Comment
  • Markets Still Unclear About AMD's Future [View article]
    @mKiwi We do aim to please here at Chez Luongo. Thanks.

    18% net margins are for Graphics and Viz. Solutions, not the company as a whole.
    Feb 14, 2014. 05:59 PM | 2 Likes Like |Link to Comment
  • Markets Still Unclear About AMD's Future [View article]
    @Stocks Wall St. will do what Wall St. will do. I would listen to the presentation I linked above. The GS guy was very positive and Kumar did a good job at both explaining the situation and giving a mea culpa on the communications front.

    No one likes uncertainty and AMD will simply have to continue providing reasonable guidance and mild outperformance until all of this either comes together or fails miserably. Obviously, I'm expecting the former rather than the latter but YMMV.

    Seasonality is what it is and it is just as present in the CPU/GPU market as it is in the console market. As this semi-custom business grows the seasonality should smooth out as chips make their way into different markets.
    Feb 14, 2014. 05:51 PM | 1 Like Like |Link to Comment
More on AMD by Tom Luongo