AMD Promises (Fingers Crossed) a Better 2008

Amid a flurry of new product announcements, AMD took plenty of time during its annual meeting with New York financial analysts to flagellate itself over the manufacturing problems that made this a year it would rather forget.

The errata problems with the Quad-Core Opteron were front and center, as was the write-down of ATI assets announced yesterday. While the company did talk about 2008 shipment plans and a number of new processors and platforms, including a new eight-core processor, 2007’s financial problems dominated.

“We made some mistakes — shame on us — but with the success we had for four years of nearly flawless execution, we’ve done well,” said Chairman and CEO Hector Ruiz. “I have to say, looking back, we fell into complacency in one area: the difficulty and unpredictability of this increasingly complex technology we are building. So we blew it, we are very humbled by it and we are not going to do it again.”

He also expressed a little dissatisfaction with the low stock price, which many in the audience could do something to help change if they wanted.

“How can anyone conclude our company is worth 40 percent less today than it was a few weeks ago?” he asked.

President and Chief Operating Officer Dirk Meyer added that AMD has done a lot of things “very well” this year, but “we have done one thing very poorly. Namely, we haven’t delivered our quad-core product.”

The company denied claims that it stopped shipment of the Quad-Core Opteron due to the errata problem and said it’s currently spinning up new chips at its Dresden manufacturing facility that fix the problem. It will check those chips in January and begin volume shipments after that. Computers from OEM partners and system builder are expected in the second quarter.

For now, Meyer said he is “maniacally focused on being cash-flow neutral. We don’t want to have to go back to the market to borrow money,” he said, a reference to the 8.1 percent stake the company sold to a United Arab Emirates investment firm.

The company said it expects to break even in the second quarter of 2008 and be profitable beginning in third quarter.

The company also discussed “Montreal,” its first octal-core server processor, which will ship in 2009 along with AMD’s first server platform, codenamed “Piranha.” That platform will feature a new server chipset and HyperTransport 3.0 and support DDR3 memory.

The company also detailed its first notebook platform, called “Shrike.” Shrike is based on AMD’s first accelerated processing unit (APU), dubbed “Swift.”

The APU idea is a combination of a CPU and other processors in one core, such as CPU and GPUs. Swift, accordingly, combines CPU and GPU technology on a single processor die. AMD plans to begin shipping both Swift and Shrike during the second half of 2009.

The company also said it is on schedule to ramp up its 45nm production in first half of 2008, with products in market during second half of 2008. It also said it would reach 32nm in 2010, thanks to its partnership with IBM, which recently announced plans to offer 32nm production capabilities to processor designers.

AMD executives also described moving to a 55nm process for the company’s graphics processors and said it had made a number of wins in the notebook space, which will begin showing up in products starting next year.

In the consumer electronics space, AMD said it sees opportunities in LCD TVs, which continue to grow in popularity. It plans to release new MPEG video processors in 2008 for the HDTV market. It will also release new 2D and 3D graphics chips for the handset market.

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