Earlier this week, we posted a bit of an alarmist post about AMD’s future, based on a report from Kerrisdale Capital Investments. AMD got wind of the report, and took umbrage with a great deal of it, letting us know of inaccuracies contained within.
For starters, though much of the information in the report is sourced the way any report of its ilk might be, one thing that isn’t made clear in the thing is that it’s a report compiled by students.
“The “analysis,” was actually done by a team of MBA students from Warwick Business School who entered competition run by Kerrisdale Capital Investments” contends AMD’s Director of Corporate Communications, Drew Prairie. “Students were asked to predict the future based on modeling and their understanding of the market and trends.”
So while the report may have contained a great deal of factual information, it was also heavily based on conjecture, and a few of the report’s claims were based on faulty reasoning, with Prairie adding that they made gross over-simplifications. He also says that the students’ lack of faith in AMD’s roadmap was misplaced – especially seeing as at the time the report was made, that AMD hadn’t disclosed that information yet.
Those plans include its ZEN core, high-performance server-grade ARM cores and high-performance server APUs. The next-generation 64-bit x86 processor core, codenamed “Zen” is what AMS except to help drive its re-entry in to the top-end desktop and server markets, making good on CEO Lisa Su’s promises not to always be the low cost solution. Its first custom 64-bit ARM core, “K12? core, is an embeddable chip that’s made for efficiency. AMD is also banking on its stacked HBM memory, coming soon to its enthusiast cards, to help shake up the GPU market. Its newly announced, budget, eSports-focused APU’s should also help with its return to consumer favour.
In the article, I also said that AMD’s got “close to no R&D budget,” which Prairie pointed out wasn’t quite right too. While it is true that AMD’s annual research budget has dropped sharply (now half a billion Dollars less than it was 5 years ago), Prairie asserts that it’s down to efficiency.
“Nearly $1.1B in 2014 isn’t “close to no research budget”…and our CTO spent a fair amount of time at our Financial Analyst Day earlier this month talking through how we have re-engineered our R&D functions to work more efficiently by adopting a modular, building block design approach for future products so that we are re-using key IP more effectively across products.
We also talked about future GPU cores planned for next year that will deliver 2x perf/watt gains over current products as well as a new x86 CPU core that will deliver 40% IPC uplift. Innovation is lifeblood of the company, and we are by all means investing to drive this.”
For reference, Nvidia’s annual R&D budgets sits at around $1.3 Billion USD – but it has its fingers in fewer pies – investing more R&D in to a narrow set of products. Intel, AMD’s largest semi-conductor rival spends $11.5 Billion annually on its R&D.
While AMD’s financial situation isn’t at all where the company would like it to be, It’s unlikely that AMD will declare bankruptcy by 2020 – though any sort of turnaround will be an uphill struggle. And it’s one I certainly hope that AMD overcomes.
Last Updated: May 29, 2015
ReaperOfSquirrels
May 29, 2015 at 15:15
I hope AMD overcomes it too, the company and their tech has a lot of potential, but I don’t know if their focus is in the right place. *shrug* just an opinion.
Admiral Chief's Adventure
May 29, 2015 at 15:24
Aye, I’ll still support them no matter what
Hammersteyn
May 29, 2015 at 15:25
I’ll support them even if they stop making graphics chips but potato chips instead
Wesley Fick
May 29, 2015 at 15:54
You’re in luck! 😛
Hammersteyn
May 29, 2015 at 16:04
NO way! Bwahahaha
Deceased
June 1, 2015 at 11:36
Where can I get this O.O
Wesley Fick
June 1, 2015 at 13:18
You had to be at the Hot Chips Symposium back in 2013, which AMD hosted down the road from Intel’s IDF13 event. I wasn’t there myself, but journalists going there picked from random, unmarked chip cans which had different flavours.
Darkwolfie
May 29, 2015 at 16:08
I have my entire PC life been an AMD user but do to the low availabilty of AMD products in my area and our online shops not really stocking the AMD goodies I want, with my latest upgrade I was forced to the dark side I wonder if I will be allowed back
Ghost In The Rift
May 29, 2015 at 16:17
If AMD can come up to par with nvidia and there products cost less ill be more than happy to move to red,until then AMD has to win me over with a spectacular budget card, here is to hoping. “CEO Lisa Su’s promises not to always be the low cost solution. ” is what scares me!
Wesley Fick
May 30, 2015 at 01:51
The “low cost solution” thing really relates to AMD’s APUs always being put into budget desktops and laptops by the OEMs because they are idiots and more or less indebted to Intel or in their pocket somehow. Mind you, AMD’s own marketing hasn’t helped that mindset at all.
Splooshypooh
May 29, 2015 at 16:19
Those students should be failed then surely? Or at least get the wooden mic prize?
Kromas,powered by windows 10.
May 29, 2015 at 17:32
MBA projects are judged on data on the report and the report itself. They are not supposed to be published as actual reports so not their fault.
Carnot Antonio Romero
May 30, 2015 at 00:17
Agreed– it’s sloppy at best to take some report created in a student contest and interpret is as the opinion of professionals.
Splooshypooh
June 1, 2015 at 09:06
So they make it up then? Sounds like a legit degree to me
Kromas,powered by windows 10.
June 1, 2015 at 10:44
If it is not science it usually is made up. When you get a maths question like “Johnny runs at 2km per hour ….” You rarely question who Johnny is and why he is running 2km per hour or even where this is occurring. You get two primary data sets in most degrees. Historical and theoretical. This data set was most likely historical and using historical data only gets you this far due to real time changes in market values etc.
Not sure exactly what you are trying to accomplish here but I would suggest you look into increasing tacit knowledge before posting things like this.
Splooshypooh
June 1, 2015 at 12:33
Or, OR… *runs*
Carnot Antonio Romero
May 30, 2015 at 00:16
Love that chart — where exactly does the Y axis begin?