Summary
1. Ruiz and Meyer are hoping against hope in expecting AMD to return to profitability so soon. 2. Barcelona was supposed to have delivered the “killer” punch to Intel but instead turned out to be a major embarrassment for AMD
Analysis
All one has to do is to look back over the last decade and review what AMD has promised and what they have delivered. The latest in their stream of failures has been “Barcelona”, the quad core server chip supposedly the one that was technologically advanced and would result in taking market share away from Intel.
Last year, AMD actually was doing well ahead of Intel in almost every are from servers to desktops to laptops until Intel took stock of the situation and came up with its new line of energy-efficient microprocessors and has not looked back since. This combined with the costly acquisition of ATI Technologies has hurt AMD in the short run. AMD’s management has a tough task on hand now, from the integration of ATI to getting to delivering better quality products as promised. Investors have already dumped the stock down from its peak in 2006 and AMD needs to lay out a plan on its road back to profitability.
Bottom line, AMD has a number of challenges to overcome in the short run and I do not see how they will return to profitability so soon. I do think that in a couple of years, they will overcome the recent issues and failures and once again become an Intel competitor.
