Is AMD Doomed?

By Loyd Case  |  Posted 2007-11-19 Print this article Print

Opinion: AMD frantically tries to get its CPU act together, even as its GPU division trails in the performance arena. Can better process technologies and foreign investments save AMD?

I was as startled as anyone to see last Fridays news that Abu Dhabis Mubadala Development Company handed AMD $622 million in exchange for 8.1 percent of the company. That puts AMDs overall valuation at roughly $7.7 billion, slightly above what the current stock price would indicate. That $622 million infusion gives AMD some vital financial breathing room, given that its lost more than $1.6 billion so far this year. Add $5.3 billion in debt, and only $1.5 billion in cash on hand (now, presumably, $2.16 billion), the situation is not pretty. The real heart of the matter, though, is not AMDs financial situation. The companys financial situation is directly the result of its execution in the market.
Lets step back a few years, to AMDs halcyon days. Back then, CTO Fred Weber was on a roll, after having architected AMDs rise to performance prominence over archrival Intel with AMDs Hammer processor family. K8 became known as the Athlon 64 and later, the Athlon 64 X2 as AMD shipped dual core versions. The native dual core X2 CPUs were the darling of PC performance enthusiasts everywhere, running rings around equivalent Intel processors in terms of performance while at the same time using less power and putting out lower heat.
Intels only response at the time, in terms of product, was to slap two very hot CPU dies into one package and call it a dual core CPU. On the one hand, they actually beat AMD to market with their dual core Smithfield product. But it was a very hot solution and was an underperforming relative to what AMD was shipping. Read the full story on Is AMD Doomed?
Loyd Case came to computing by way of physical chemistry. He began modestly on a DEC PDP-11 by learning the intricacies of the TROFF text formatter while working on his master's thesis. After a brief, painful stint as an analytical chemist, he took over a laboratory network at Lockheed in the early 80's and never looked back. His first 'real' computer was an HP 1000 RTE-6/VM system.

In 1988, he figured out that building his own PC was vastly more interesting than buying off-the-shelf systems ad he ditched his aging Compaq portable. The Sony 3.5-inch floppy drive from his first homebrew rig is still running today. Since then, he's done some programming, been a systems engineer for Hewlett-Packard, worked in technical marketing in the workstation biz, and even dabbled in 3-D modeling and Web design during the Web's early years.

Loyd was also bitten by the writing bug at a very early age, and even has dim memories of reading his creative efforts to his third grade class. Later, he wrote for various user group magazines, culminating in a near-career ending incident at his employer when a humor-impaired senior manager took exception at one of his more flippant efforts. In 1994, Loyd took on the task of writing the first roundup of PC graphics cards for Computer Gaming World -- the first ever written specifically for computer gamers. A year later, Mike Weksler, then tech editor at Computer Gaming World, twisted his arm and forced him to start writing CGW's tech column. The gaming world -- and Loyd -- has never quite recovered despite repeated efforts to find a normal job. Now he's busy with the whole fatherhood thing, working hard to turn his two daughters into avid gamers. When he doesn't have his head buried inside a PC, he dabbles in downhill skiing, military history and home theater.

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