Thursday, October 18, 2007

AMD reported, I don't have much to report

AMD did better than expected, losses not as terrifying as expected, 7% improvement in Gross Margins, a bit of market share gained in both mobiles and desktops, lost market share in servers.

The market was indeed strong.

What's happening?

The market wanted lots of computers and people is not caring about the Intel brand, since AMD processors are cheaper, but perceived as perfectly comparable to Intel, they have some demand strength.

Does this mean that AMD is on its way to survive? -- No. Let me explain why:

For Intel is very expensive to asphyxiate AMD in a price war that needs to be fought in all segments, and Intel's management may feel the pressure to just increase short term profits. This is a reasonable moment to dedicate to profits, because AMD is lagging behind in competitiveness in a definitive way. The strategy for Intel is very simple: To grind AMD with the economies of scale. They are about to launch 45nm high-k/metal gate, and then 32nm in immersion process. AMD flunked the 65nm process and only will have immersion for 45nm... not significantly better transistors. Like I've said many times before, Intel then will get rid of the FSB/MCM disadvantages, and AMD will be a sitting competitive target.

AMD is losing money at a terrifying rate, and there is no plan to return to profitability. There are no competitive products in the roadmaps. This company is still as inviable as it was yesterday, despite a good quarter.

The stock price? -- good to take bearish positions little by little.

Nothing to new to say.