Tag: microchip

AMD Cuts Workforce – Sea Change 101 for Sailors?…,

AMD LayoffsJust one week and a day after assuming her new roll as AMD’s CEO Dr. Lisa Su announced a reduction in force amounting to seven percent of the AMD’s current workforce of 10,149 employees.

The fallowing of ~700 people follows two rounds of layoffs under Rory Read’s three year tenure.

AMD did not provide any information about where the cuts would be made – the company recently split into two divisions “Computing and Graphics”, and “Enterprise, Embedded and Semi-Custom”. Contacts indicate that “Computing and Graphics” will receive a majority of the “hits”.

Last Thursday’s warning by Microchip Chief Executive Steve Sanghi that a correction will spread more broadly across the industry in the near future sent shares of chipmakers lower last Friday.

Microchip is a broad spectrum supplier into the Chinese and Asian marketplace, booking revenue only after it is shipped by distributors – a closely coupled supply chain that quickly indicates impending sea changes. AMD shares a similar situation in China, the company’s biggest market, substantiating Microchip’s warning. Whether this is the beginning of a prolonged downturn or is merely another “noise blip” on the radar is entwined in controversy.

Strangely enough, AMD’s arch nemesis Intel, reported rather glowing results on Tuesday indicating that AMD might be suffering from Intel’s competitive resurgence in Asia. The fact that Intel is devoting resources to system level integration at the SoC level may now be having an effect on both competitors.

AMD’s experienced a 65% drop in quarterly profits and is expecting the current quarter to be 13% lower than the period ended in September. The company’s share price fell 6% to $2.49 in after-hours trading. The share price has dropped 43% in three months as of close Thursday.

Su went on to assure analysts that the company was moving toward customized chips for applications beyond videogames hinting at two customers that had the potential of bringing in $3 Billion in additional revenue over the next three years.

TechEye Take

The first time I saw Rory Read perform in front of analysts was somewhat of an embarrassment. He became so animated on stage that an additional two flaps of his arms per minute would have gotten him airborne (I heard that he fired his stage coach soon thereafter). His resignation came as no surprise, only late by three years. Lisa Su was the only stand-up with credibility and has remained so since.

Can we expect Dr. Su to right the AMD ship? She’s very smart and well experienced in the land of semiconductors and if anyone can accomplish the miracle required to make AMD a player she’d be my pick…,

Intel makes profit

OLYMPUS DIGITAL CAMERASemiconductor firm Intel gave a current-quarter revenue forecast well above what the cocaine nose jobs of Wall Street had predicted.

Intel posted third quarter net profits of $3.32 billion compared with $2.95 billion in the same financial quarter last year.

Third quarter revenue was $14.6 billion, up eight percent from same quarter last year, and the company said it expects fourth quarter revenues of $14.7 billion, plus or minus $500 million.

Wall Street expected third quarter revenues of $14.44 billion and fourth quarter revenues of $14.48 billion.

The company said its supply chain was in good shape ahead of the holiday season and demand for PCs had recovered as enterprises finally started replacing their aged PCs.

Intel said in a statement on Tuesday that demand for its chips was in good shape.

“The worldwide PC supply chain appears to be healthy, with inventory levels appropriate in anticipation of the fourth quarter retail cycles,” Intel said.

The recovering PC industry has helped push Intel’s shares 24 percent higher in 2014, making it the top performer in the Dow Jones industrial average.

The results are an apparent poke in the eye to comments from Microchip that weak demand in China  would soon become visible across the chip industry.

Intel said its gross margins would slip to 64 percent in the current quarter from 65 percent in the third quarter.

Intel said its mobile and communications group had an operating loss of $1.04 billion on revenue of $1 million, reflecting subsidies Intel has been paying to persuade tablet makers to use its chips.

Shares of Intel were up 2.05 percent in extended trade after closing up 2.13 percent at $32.14 on Nasdaq.

Intel suffers from industry nervousness

Intel-logoChip giant Intel puts out its quarterly results tomorrow but its shares dropped last Friday after Microchip issued a revenue warning.

Microchip said it was ready for another industry correction and, according to financial analysts at Seekingalpha.com, “the entire semiconductor space was reeling on Friday”.  That applied particularly to behemoths like Intel.

But other things may help Intel’s share price, according to the financial analysts.  There were reports that Apple will delay its 12.9-inch iPad to 2015 and that will give Intel a window of opportunity to steal market share on its chips, if the reports are true.

Intel will report its third quarter earnings tomorrow afternoon, US time.

Analyst Bill Maurer at Seeking Alpha said the fact that Intel planned to buy back a cool $4 billion worth of shares will have an impact on its bottom line – a positive one, that is.

As a result of Microchip’s revenue warning on Friday, Intel (ticker: INTC) lost over five percent on the stock exchange.  Intel still makes huge gross margins and had predicted when it released its second quarter earnings that gross margins would be 66 percent, and revenues $14.4 billion or so.