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AMD loses cash less quickly

Is the bottom in sight?

By Rik Myslewski in San Francisco • Get more from this author

Posted in PC Builder, 22nd April 2009 00:39 GMT

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AMD's CEO Dirk Meyer has fired a shot at his Intel counterpart, Paul Otellini, who recently said that the PC market has hit rock bottom.

In a call on Tuesday revealing his company's 2009 first-quarter results, Meyer said: "I've heard some say we've hit bottom. I don't know how someone could say we've hit bottom in the current economic climate."

For the sake of AMD's investors and employees, let's hope that Otellini is more accurate than Meyer. AMD's net revenue was essentially unchanged from the previous heinous quarter - $1,177m (£802m) in Q1 2009 compared with $1,162 (£792m) in Q4 2008 - but down significantly from the $1,487m (£1,013m) during the same period last year.

There were bright spots to be found, however. Although the company is still losing money, it's losing it more slowly. The net loss for Q1 2009 was $414m (£282m), a vast improvement over the $1,437m loss in Q4 2008 (£979m).

But even the good news had a tinge of badness. For example, even though microprocessor sales were up on a unit basis, the average selling prices (ASPs) for those chips was down.

Meyer put the blame squarely on the enterprise market. "Stand back and look at it," Meyer said, "Our server business was down a little bit quarter-on-quarter, while both the desktop and notebook businesses were up quarter-on-quarter, which affects the overall ASP and moves it down."

On the plus side, Meyer noted that he believes that GPU sales "might see a spike" when Microsoft releases the DirectX 11-enhanced Windows 7 expected later this year. He also has high hopes for the upcoming Congo variant of AMD's Yukon platform, which he said will ship near the end of the current quarter.

But oh, those pesky enterprise customers. After noting that "the outlook is murky at best," Meyer admitted that "The enterprise side of the commercial market is clearly still weak. Wallets are closed."

Which echoes Otellini, who recently said that enterprise customers are "keeping their wallets shut."

And that's one analysis upon which Dirk and Paul have found common ground. ®

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