Yesterday, AMD CEO Hector Ruiz told investors that the company hopes to break even in the second quarter of 2008 and to return to profitability in third quarter of 2008.
Many on Wall Street had hoped that AMD would provide details on its "asset lite" strategy. This would include its plans to sell off some FABs and outsource manufacturing tasks to cut costs. AMD didn’t announce such a plan, and we know for a fact that this would be the final nail in the AMD coffin.
AMD can barely compete with Intel FAB capabilities and it doesn’t need TSMC or IBM to increase margins to its chips, as AMD already has higher manufacturing costs than it would have in that case.
It looks like Core 2 Quad 45nm-based Yorkfield CPUs won’t get real competition at least until Q3 2008, and Intel should be getting ready with Nehalem at that time. Intel plans to have Nehalem native quad core in Q4 2008 and with eight cores native Nehalem in the pipe for 2009.
AMD didn’t even try to put a focus on ATI’s success over the last two quarters, as the company is coming back on both chipset and graphics fronts. Unfortunately, AMD needs a better Quad core and eventually dual and tri cores to get back in the game.