Popping its head out of loss for a quarter or two will not change a thing, amd has to manage to stay there long term. Amd has had many quarters it didn't post a loss the last 20 years, but still is at a net loss of billions of dollars.
"Operating income for the year was $204 million, compared to an operating loss of $372 million the year before."
As such, we're talking four consecutive quarters, with the major launches that have most heavily impacted financials trickling out over the 2nd-3rd. This isn't sayning "AMD is a rock-solid business now", but things are definitely looking up. From the looks of it, Su is doing an amazing job.
I would think the huge part of this is popularity of Xbox One and PS4. To say that AMD money come back is because of Ryzen is pre-mature. Keep in mind Intel takes in at least 10 times as much as AMD.
Console sales peak in the holiday season, which means that those chips were ordered in Q3. Q4 profits were HEAVILY driven by consumer Ryzen sales and inking new contracts with cloud service groups, per Lisa Su herself.
I agree. Zen isn’t responsible for profit in Q3/4, GPU’s. As they have been for the last decade. AMD buying ATI was probably the best decision AMD ever made.
I’m still trying to wrap my head around how they have an operating income of less than a billion per quarter in graphics, when seemingly they can’t even keep cards on the shelf. I’ve been trying to buy a VEGA56 for months...
I am looking forward to what AMD has in store for the foreseeable future. I just wish more investors would recognize that AMD is here to stay. We need the market to have more faith in what Lisa Su and the team at AMD are trying to do to keep competition high.
Well it's 50-50, the Zen products are AMDs doing. That crypto-mining is driving the GPU prices nuts is just free windfall for both AMD and nVidia, right now they can sell anything and everything they can manufacture. And it can equally unpredictable come crashing down or transition to FPGA/ASIC miners causing a massive oversupply of second-hand cards afterwards. Of course being in the black is better than being in the red, but I can understand investors are weary.
The higher prices are not their doing, they sell at normal prices and others are pushing prices up, they have no control over that as it would be illegal. Not that GPU growth is just mining as Vega ramped in Q4, the Intel part barely started shipping and Vega laptop is yet to be launched so they actually have room to grow.
Just so. They only good thing considering Nvidia and AMD is that everything They make goes to the market. But Profit goes to shops that sell those cards in much bigger price than They do pay to Nvidia and amd. So shops has increased their margins because They can...
...because it would inevitably come back to bite them once retail prices swing back. Retailers and distributors are much higher-risk businesses than manufacturing, and normally have far tighter margins. After all, AMD reports their gross margin to be 34% (which they need to pay for R&D), while retail margins for GPUs and other hardware is typically in the low-to-mid single digit percent range (retailers mostly survive off of scale and sale of high-margin accessories, which is why it's so damn hard to find good, cheap USB cables and the like). As such, there's a very, very tight limit on what retailers are willing/able to pay, as they would then be taking the risk of losing very significant amounts of money per product sold if prices suddenly returned to MSRP.
As a hypothetical example, let's say a reference RX 580 8GB has an MSRP of $230 before taxes, of which 10% margin (of the retail price) is factored in for both the retailer and distributor. A further 20% goes to the AIB partner. That means that AMD is charging the AIB partner $138 for the card. At a 34% gross margin, AMD then makes $47 per card sold. If AMD increases their price to $200 (a 44% increase), they make $109 per GPU, a margin of 54%. That's a significant increase, sure. But unless the AIB partners, distributors and retailers agree to take on more risk (by buying more expensive stock) while _lowering_ their margins, it also pushes the retail price to $333 - an increase of 60%. Then retailers and distributors start pushing their margins, as by the generally accepted logic they should get more rewards from taking higher risks (i.e. they should have higher margins as an incentive to take on more expensive stock). Suddenly the price peaks past $400, 500, or more - and AMD's gains are still quite small. Should AMD then continue raising prices, to "get more back" from the higher retail prices? This quickly turns into a feedback loop.
AIB partners, distributors and retailers need stability. They stop distributing parts if they lose that, as they know how tenuous this balance can be. It's that simple.
That makes no sense. Why would amd continue raising wholesale prices? They’re not mindless drones in a feedback loop. They could raise it once and leave it there. The retailers can do whatever the heck they want. If demand drops off then amd could lower their prices.
Acrually dedicated gaming market is irrelevant for Samsung..huge majority of their memory business is the general usage memory modules(mobile phones, laptops and servers )
Although only a small profit at least they didn't lose money. Ideally they can scale up, because if interest rates rise they'll be in trouble. Their 1+B debt would take 20+ years to pay off at this rate.
Maybe start marketing their own products like when they bought Seamicro.
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Cliff34 - Tuesday, January 30, 2018 - link
Good to see AMD no longer operating in the red. Let's hope this year will be better for them against Intel.iter - Wednesday, January 31, 2018 - link
Popping its head out of loss for a quarter or two will not change a thing, amd has to manage to stay there long term. Amd has had many quarters it didn't post a loss the last 20 years, but still is at a net loss of billions of dollars.Valantar - Wednesday, January 31, 2018 - link
"Operating income for the year was $204 million, compared to an operating loss of $372 million the year before."As such, we're talking four consecutive quarters, with the major launches that have most heavily impacted financials trickling out over the 2nd-3rd. This isn't sayning "AMD is a rock-solid business now", but things are definitely looking up. From the looks of it, Su is doing an amazing job.
HStewart - Wednesday, January 31, 2018 - link
I would think the huge part of this is popularity of Xbox One and PS4. To say that AMD money come back is because of Ryzen is pre-mature. Keep in mind Intel takes in at least 10 times as much as AMD.FullmetalTitan - Wednesday, January 31, 2018 - link
Console sales peak in the holiday season, which means that those chips were ordered in Q3. Q4 profits were HEAVILY driven by consumer Ryzen sales and inking new contracts with cloud service groups, per Lisa Su herself.Samus - Wednesday, January 31, 2018 - link
I agree. Zen isn’t responsible for profit in Q3/4, GPU’s. As they have been for the last decade. AMD buying ATI was probably the best decision AMD ever made.Samus - Wednesday, January 31, 2018 - link
I’m still trying to wrap my head around how they have an operating income of less than a billion per quarter in graphics, when seemingly they can’t even keep cards on the shelf. I’ve been trying to buy a VEGA56 for months...Are they just st production capacity or what?
phoenix_rizzen - Monday, February 5, 2018 - link
See the follow-up article (https://www.anandtech.com/show/12380/amd-to-ramp-u... They're pretty much limited in how many GPUs they can pump out by how much GDDR5/HBM2 RAM they can procure.SentientOverlord - Tuesday, January 30, 2018 - link
I am looking forward to what AMD has in store for the foreseeable future. I just wish more investors would recognize that AMD is here to stay. We need the market to have more faith in what Lisa Su and the team at AMD are trying to do to keep competition high.Kjella - Tuesday, January 30, 2018 - link
Well it's 50-50, the Zen products are AMDs doing. That crypto-mining is driving the GPU prices nuts is just free windfall for both AMD and nVidia, right now they can sell anything and everything they can manufacture. And it can equally unpredictable come crashing down or transition to FPGA/ASIC miners causing a massive oversupply of second-hand cards afterwards. Of course being in the black is better than being in the red, but I can understand investors are weary.boozed - Wednesday, January 31, 2018 - link
It was my understanding that the use of GPUs is driven by the development of ASIC-resistant POW algorithms.jjj - Wednesday, January 31, 2018 - link
The higher prices are not their doing, they sell at normal prices and others are pushing prices up, they have no control over that as it would be illegal. Not that GPU growth is just mining as Vega ramped in Q4, the Intel part barely started shipping and Vega laptop is yet to be launched so they actually have room to grow.haukionkannel - Wednesday, January 31, 2018 - link
Just so. They only good thing considering Nvidia and AMD is that everything They make goes to the market. But Profit goes to shops that sell those cards in much bigger price than They do pay to Nvidia and amd. So shops has increased their margins because They can...ABR - Wednesday, January 31, 2018 - link
Why are AMD and nVidia afraid or unwilling to raise their wholesale prices?Valantar - Wednesday, January 31, 2018 - link
...because it would inevitably come back to bite them once retail prices swing back. Retailers and distributors are much higher-risk businesses than manufacturing, and normally have far tighter margins. After all, AMD reports their gross margin to be 34% (which they need to pay for R&D), while retail margins for GPUs and other hardware is typically in the low-to-mid single digit percent range (retailers mostly survive off of scale and sale of high-margin accessories, which is why it's so damn hard to find good, cheap USB cables and the like). As such, there's a very, very tight limit on what retailers are willing/able to pay, as they would then be taking the risk of losing very significant amounts of money per product sold if prices suddenly returned to MSRP.As a hypothetical example, let's say a reference RX 580 8GB has an MSRP of $230 before taxes, of which 10% margin (of the retail price) is factored in for both the retailer and distributor. A further 20% goes to the AIB partner. That means that AMD is charging the AIB partner $138 for the card. At a 34% gross margin, AMD then makes $47 per card sold. If AMD increases their price to $200 (a 44% increase), they make $109 per GPU, a margin of 54%. That's a significant increase, sure. But unless the AIB partners, distributors and retailers agree to take on more risk (by buying more expensive stock) while _lowering_ their margins, it also pushes the retail price to $333 - an increase of 60%. Then retailers and distributors start pushing their margins, as by the generally accepted logic they should get more rewards from taking higher risks (i.e. they should have higher margins as an incentive to take on more expensive stock). Suddenly the price peaks past $400, 500, or more - and AMD's gains are still quite small. Should AMD then continue raising prices, to "get more back" from the higher retail prices? This quickly turns into a feedback loop.
AIB partners, distributors and retailers need stability. They stop distributing parts if they lose that, as they know how tenuous this balance can be. It's that simple.
sonicmerlin - Friday, February 2, 2018 - link
That makes no sense. Why would amd continue raising wholesale prices? They’re not mindless drones in a feedback loop. They could raise it once and leave it there. The retailers can do whatever the heck they want. If demand drops off then amd could lower their prices.Alistair - Wednesday, January 31, 2018 - link
Anyone look at Samsung's profits? More profit is made off the memory in the RX 580 than the whole card it seems.darkich - Wednesday, January 31, 2018 - link
Acrually dedicated gaming market is irrelevant for Samsung..huge majority of their memory business is the general usage memory modules(mobile phones, laptops and servers )Norman Foster - Wednesday, January 31, 2018 - link
AMD results beat estimates. Encouraging outlook for 2018. http://alph.st/b3504af1webdoctors - Wednesday, January 31, 2018 - link
Although only a small profit at least they didn't lose money. Ideally they can scale up, because if interest rates rise they'll be in trouble. Their 1+B debt would take 20+ years to pay off at this rate.Maybe start marketing their own products like when they bought Seamicro.