netrashetty
Netra Shetty
Advanced Micro Devices, Inc. (AMD; NYSE: AMD) is an American multinational semiconductor company based in Sunnyvale, California, that develops computer processors and related technologies for commercial and consumer markets. Its main products include microprocessors, motherboard chipsets, embedded processors and graphics processors for servers, workstations and personal computers, and processor technologies for handheld devices, digital television, automobiles, game consoles, and other embedded systems applications.
AMD is the second-largest global supplier of microprocessors based on the x86 architecture and also one of the largest supplier of graphics processing units. It also owns 8.6% of Spansion, a supplier of non-volatile flash memory.[2] In 2009, AMD ranked eighth among semiconductor manufacturers in terms of revenue
Advanced Micro Devices (NYSE: AMD) is a leading semiconductor producer that makes microprocessors for a variety of computing products, including personal desktop and notebook computers, servers, gaming consoles, and other consumer electronics. Along with market leader Intel, AMD dominates the semiconductor space.[1]
Intel has been in the industry longer than AMD and, with 76.7% market share and 79.7% of the revenue share for micoprocessors, maintains a significant lead over its smaller rival.[2] In FY 2009, AMD's net income was $293 million, up from its $3.09 billion loss in FY 2008. Intel, on the other hand, reported a net income of $4.3 billion giving AMD a huge disadvantage when trying to allot money towards R&D.[3][4] Intel has strengthened its lead with the release of a new line of processing technology (45nm), known as the Core i7. Chips using this technology are faster and consume less power.[5] AMD rolled out its own 45nm release during the 4Q of 2008.[6]
On October 7, 2008 AMD closed a deal for a joint venture with Advanced Technology Investment Company (ATIC), a venture capital firm from Abu Dhabi. The new company assumes all manufacturing debt, operates AMD's two fabs, and will construct another fab in upstate New York. The joint venture gives AMD much needed cash and allows it to focus on chip design so it can most effectively compete with rival Intel.[7]
Business Metrics
AMD has split from being a chip designer and semiconductor foundry into just a chip designer when it spun off its manufacturing business. This business model is still developing and the company has announced a net profit of $280 million, in the latest period. From 2006-2008, AMD has reported a negative income largely due to excessively high costs and write downs on the ATI acquisition. AMD spends a large portion of its money on R&D ($1.72 billion, about 32% of revenue in 2009.) Still, this is far less than Intel's spending in the same area--the industry giant is very aggressive about innovation.
In the first quarter of 2010, AMD reported its second straight quarterly profit. Its net income increased from a loss of $416 million in 1Q09 to $257 million. Its revenue also increased from the year-ago quarter's $1.18 billion to $1.57 billion. This increase was due to an increase in demand for the company's chips and boosted by a non-cash profit of $325 million from the consolidation of the the GlobalFoundries spin-off.[8]
In the second quarter of 2010, AMD reported a net loss of $43 million. However, the loss was primarily attributed to a $120 million related to GlobalFoundries. Without this one-time extraordinary item, AMD would have reported a profit. AMD's revenue increased by 40% over last year to $1.65 billion and its gross margin, a measure of profitability, increased from 37% to 45%.[9]
In the third quarter of 2010, AMD reported a loss of $118 million, $10 million less than the $128 million loss a year ago. Revenue increased 16% from $1.4 billion to $1.62 billion. This growth was due to a 33% increase in graphics segment revenue from a year-ago.[10]
In the fourth quarter of 2010, AMD reported a net profit of $375 million primarily due to income from a patent license and a legal settlement with Sony. In the year ago period, the company's net profit was $1.2 billion, which was due to a legal settlement with Intel. AMD's revenue stayed consistent at $1.65 billion. AMD began shipping its new microprocessors, called Fusion, during this quarter. [11]
Business Segments
2009 2008 2007 2006
Computing Solutions[12]
Net Revenue $4,131 $4,559 $4,702 $5,367
Operating Income (Loss) $127 $(461) $(712) $679
Graphics[12]
Net Revenue $1,206 $1,165 $992 $189
Operating Income (loss) $50 $12 $(39) $(6)
All Other[12]
Net Revenue $66 $84 $164 $71
Operating Income (loss) $968 $(1,506) $(1,559) $(690)
Total[12]
Net Revenue $5,403 $5,808 $5,858 $5,627
Operating Income (loss) $408 $(1,955) $(2,310) $(17)
Products
Computation Products
Microprocessors: Essentially the brain of a computer, these products are found in all personal computers. AMD produces both single- and dual-core processors, which run both 32- and 64-bit computing.[13]
Servers and Workstations: The single- and dual-core Opteron processors are AMD's server and workstation microprocessing units, similar to their standard microprocessor cousins but made for larger computing projects including business processing (supply chain management, for instance), engineering and web servers. In August 2007, AMD introduced their quad-core AMD Opteron processors.[14]
Embedded Products: These are processors that are designed for devices in non-PC/computer markets. These products are made to meet particular consumer needs that may be outside the scope of PC processor units, like significantly smaller size, higher mobility, or tolerance of harsh environments.[15]
Graphic & Chipset Products: These enhance a computer's graphics capabilities, and can be either stand-alone graphic cards or chipsets that are integrated into motherboards. These products are used in systems designed for gaming or high-level graphic display.[16]
Memory Products: Until its IPO in October 2006, Spansion was a subsidiary of AMD that produced and sold flash memory products. Since its sale, AMD has discontinued its production and sale of flash memory products.[17]
Consumer Electronics: This segment includes processors for gaming consoles, digital televisions and handheld devices. These processors are specialized to fit the needs of a given product line. AMD's processors can be found in Microsoft's Xbox 360, the Nintendo Wii and Nintendo GameCube gaming consoles. (See Game Consoles Wars: Xbox 360 vs. PS3 vs. Wii.)[18]
Computers: AMD has announced their first computer brand named AMD Business Class. The company would develop and design these machines in collaboration with partners like Dell. These desktops would be followed by a range of new laptop products likely to be sold by companies like Acer, Dell, Fujitsu-Siemens, Hewlett-Packard and Lenovo. They will be targeted at the small- and medium-size business market, but would also meet the demands of the biggest corporate clients as well.[19]
Customers
Original Equipment Manufacturers (OEMs) and Original Design Manufacturers (ODMs) are companies that produce computers, handheld devices, and telecommunications and network communications products, and who are among ADM's chief customers. The products that these manufacturers produce rely on the processors that AMD makes.[20]
Third Party Distributors:AMD also sells its products to companies that distribute to smaller OEMs and ODMs.[21]
Industry Metrics
Process Technology and Architecture
Process Technology: this is the technology used in creating microprocessors. AMD's 65nm process technology is considered to be superior to Intel's, but Intel went one step further than AMD when it announced its new 45nm process technology. These numbers (65nm, 45nm) refer to the thickness of the insulation on the transistors inside the microprocessors--with thinner insulation, the density of circuits on a processor can be increased, so processors can be made both smaller and more powerful. Intel's 45nm processor was introduced in early November, while AMD is introducing its own around six months after.
Architecture: architecture refers to the chip design--how many individual processors can be crammed into one single chip. How the chip functions depends on its architecture, and changes in architectural design usually stem from attempts to create more efficient or more powerful processors. Currently, AMD uses both single-core and multi-core architecture for its processors.
Performance Metrics
Microprocessors are typically rated on a number of characteristics that measure their performance. These measurements are the most important factors for determining the success of a specific line of products, and as such they are the focusing points for creators of these chips. Some lines of chips will focus more on one factor than another in an attempt to predict what the market prefers (i.e. faster chips vs. more energy efficient chips, etc.)
Number of cores: Modern CPUs are multicores which means it has two or more processing units operating in parallel. The number of cores, clock speed, the number of threads each core can process in paralell, the cache and memory architecture deterimine the speed of the processor.
Clock Speed: Microprocessor speed is an indicator of how powerful the product is. In this ultra-competitive industry, Intel and AMD compete to produce the faster processor, even if the difference is very minimal. While clock speed is not the only performance factor that determines how good a processor is, it certainly plays a significant role.
Power Usage: processors that can provide the same computing power while using less energy are more efficient and more valuable. Here too, AMD and Intel race to create the most power-desirable chips.
Performance Per Watt: This measures the computing power of a microprocessor per single watt of energy consumed. In 2005, this metric proved to be very important for server processors: AMD's performance-per-watt focused processor was more appealing to the server market than Intel's clock-speed-focused processor because of the significant difference in power usage. AMD's was much more energy-efficient, lowering energy bills for products using its chips. As a result, AMD saw an 18.5% jump in its share of the server market between 2005 and 2006.
Trends and Forces
Semiconductor Cyclicality
The semiconductor industry is deeply cyclical. Demand in up cycles is so high that chip manufacturers have trouble keeping up. Similarly, if electronic sales, particularly PC sales, are slow, demand for chips can plummet. The fact that the semiconductor industry is more subject to the whim of consumer demand more than corporate demand, also adds to the overall volatility. Semiconductor sales have shown about an 80% correlation with GDP growth trends, meaning a downturn in GDP growth could very likely be accompanied by a downturn in semiconductor sales.
Declining PC Sales Decrease Product Demand
The demand for products that use AMD's processors is a significant factor in the success of AMD. Demand for computers has been decreasing growth since the mid 1990s, and as a result, microprocessing companies have seen decreasing growth in profits. IDC expects PC sales to be down 5.3 pct in 2009 as consumers search for cheaper units in a bad economy.[22] In addition the slumping of the world economy, AMD's substantial amount of indebtedness is concerning. For the FY08, the company recorded a debt of $5.1 billion. This amount is large and with no means to repay this debt (loss of $3.1 billion for FY08), the company has to look at ways of cutting debt while increasing profitability. They have announced restructuring measures and headcount reduction methods as ways of achieving cost cutting.[23][24]
New Platform Technology Business
With the acquisition of ATI Technologies in October 2006, AMD was able to begin supplying 3D graphics, video and multimedia products for all types of computers, as well as products for consumer electronics. Before this acquisition AMD was unable to compete with Intel in platform technologies. AMD has developed a notebook platform, called Puma. This platform is designed to be compatible with consumer, business, and high end notebooks, making it a very attractive platform for OEM's. The high end graphics provided by ATI gives AMD's platform a significant advantage over Intel's competing platforms.[25] However, this advantage comes partly from the fact that Intel has had problems with the graphics aspect of its platform, known as Montevina. If Intel can get this chip working then the competition for AMD would increase.
Competition
AMD competes directly with Intel (INTC). Intel has been in the microprocessor industry longer than AMD and has a significant lead in market share, but AMD has been able to gain some of this market share.
With the acquisition of ATI Technologies, AMD hoped to increase its ability to compete with Intel on all levels. However, with the loss of Spansion, AMD's flash memory subsidiary, there are even more areas in which Intel has the outright advantage.
Intel has an enormous amount of power in the microprocessing industry and as a result is able to leverage its market share to gain more customers. This has been a difficult obstacle for AMD to overcome in the past. However, AMD does boast a reputation for better service, making it popular among certain groups of consumers. Lower price points also make certain AMD products preferable to Intel's equivalents. But these recent price wars between the two competing firms have proven to be costly for AMD. Because Intel is so much larger than AMD, it is able to cut costs more effectively and as a result the losses in profit margins (from price cuts) does not affect Intel as severely.
There is another market where AMD has yet to develop a processor. Greater demand for mobility drove the increase in notebook popularity, and now that trend has sparked the rise of netbooks (aka Mobile Internet Devices, or MID's). Intel has released its Atom processors for this market and NVIDIA has released a competing processor called the Tegra. AMD is currently developing a competitor by the name of Ontario, which is set for release in the first quarter of 2011.
In the graphics chips world, the major competitors are Intel and Nvidia. AMD's Radeon line of graphics processors have turned out to be better than expected and are delivering stiff competition to Nvidia in the high end market. AMD executed a differentiating strategy for its high end graphics cards by developing mid range chips but then bundling those chips into its high end graphics cards.[26] Nvidia, on the other hand, generally develops a high end chip and then move that chip down the value chain over time. Intel currently only sells low end graphics chips. AMD's strategy poses possible execution problems over time because it requires advanced inter processor communications, but the design is able to dramatically decrease power consumption.[27] AMD released a dual processor graphics card, named the HD 4870 X2, in August 2008. The is aimed at gaming and is capable of 2.4 trillion operations per second. [28] This card marks an important step in gaining market share from leading graphics producer Nvidia.[29]
For FY09 AMD[3] Intel[4] NVIDIA
Annual Revenue(in M) $5,403 $35,127 $3,326
Net Income (in M) $293 $4,369 $1,176
Number of Employees 10,400 83,500 5,420
Latest Full Context Quarter Ending Date
2010/09
Gross Profit Margin
52.7%
EBIT Margin
24.1%
EBITDA Margin
27.1%
Pre-Tax Profit Margin
19.8%
Interest Coverage
5.6
Current Ratio
1.9
Quick Ratio
1.5
Leverage Ratio
7.5
Receivables Turnover
9.7
Inventory Turnover
5.4
Asset Turnover
1.0
Revenue to Assets
1.4
ROE from Total Operations
207.3%
Return on Invested Capital
45.5%
Return on Assets
27.7%
Debt/Common Equity Ratio
3.56
Price/Book Ratio (Price/Equity)
9.15
Book Value per Share
$0.90
Total Debt/ Equity
3.56
Long-Term Debt to Total Capital
0.78
SG&A as % of Revenue
2.7%
R&D as % of Revenue
22.9%
Receivables per Day Sales
$42.43
Days CGS in Inventory
67
Working Capital per Share
$2.27
Cash per Share
$0.91
Cash Flow per Share
$2.62
Free Cash Flow per Share
$-0.35
Tangible Book Value per Share
$0.36
Price/Cash Flow Ratio
3.1
Price/Free Cash Flow Ratio
-23.8
Price/Tangible Book Ratio
23.12
Most recent data
5-Year Averages
Return on Assets
-12.7%
Return on Invested Capital
-19.5%
Gross Profit Margin
58.8%
Pre-Tax Profit Margin
-18.5%
Post-Tax Profit Margin
-19.1%
Net Profit Margin (Total Operations)
-20.0%
R&D as a % of Sales
27.0%
SG&A as a % of Sales
17.7%
Debt/Equity Ratio
1.50
Total Debt/Equity Ratio
1.57
AMD is the second-largest global supplier of microprocessors based on the x86 architecture and also one of the largest supplier of graphics processing units. It also owns 8.6% of Spansion, a supplier of non-volatile flash memory.[2] In 2009, AMD ranked eighth among semiconductor manufacturers in terms of revenue
Advanced Micro Devices (NYSE: AMD) is a leading semiconductor producer that makes microprocessors for a variety of computing products, including personal desktop and notebook computers, servers, gaming consoles, and other consumer electronics. Along with market leader Intel, AMD dominates the semiconductor space.[1]
Intel has been in the industry longer than AMD and, with 76.7% market share and 79.7% of the revenue share for micoprocessors, maintains a significant lead over its smaller rival.[2] In FY 2009, AMD's net income was $293 million, up from its $3.09 billion loss in FY 2008. Intel, on the other hand, reported a net income of $4.3 billion giving AMD a huge disadvantage when trying to allot money towards R&D.[3][4] Intel has strengthened its lead with the release of a new line of processing technology (45nm), known as the Core i7. Chips using this technology are faster and consume less power.[5] AMD rolled out its own 45nm release during the 4Q of 2008.[6]
On October 7, 2008 AMD closed a deal for a joint venture with Advanced Technology Investment Company (ATIC), a venture capital firm from Abu Dhabi. The new company assumes all manufacturing debt, operates AMD's two fabs, and will construct another fab in upstate New York. The joint venture gives AMD much needed cash and allows it to focus on chip design so it can most effectively compete with rival Intel.[7]
Business Metrics
AMD has split from being a chip designer and semiconductor foundry into just a chip designer when it spun off its manufacturing business. This business model is still developing and the company has announced a net profit of $280 million, in the latest period. From 2006-2008, AMD has reported a negative income largely due to excessively high costs and write downs on the ATI acquisition. AMD spends a large portion of its money on R&D ($1.72 billion, about 32% of revenue in 2009.) Still, this is far less than Intel's spending in the same area--the industry giant is very aggressive about innovation.
In the first quarter of 2010, AMD reported its second straight quarterly profit. Its net income increased from a loss of $416 million in 1Q09 to $257 million. Its revenue also increased from the year-ago quarter's $1.18 billion to $1.57 billion. This increase was due to an increase in demand for the company's chips and boosted by a non-cash profit of $325 million from the consolidation of the the GlobalFoundries spin-off.[8]
In the second quarter of 2010, AMD reported a net loss of $43 million. However, the loss was primarily attributed to a $120 million related to GlobalFoundries. Without this one-time extraordinary item, AMD would have reported a profit. AMD's revenue increased by 40% over last year to $1.65 billion and its gross margin, a measure of profitability, increased from 37% to 45%.[9]
In the third quarter of 2010, AMD reported a loss of $118 million, $10 million less than the $128 million loss a year ago. Revenue increased 16% from $1.4 billion to $1.62 billion. This growth was due to a 33% increase in graphics segment revenue from a year-ago.[10]
In the fourth quarter of 2010, AMD reported a net profit of $375 million primarily due to income from a patent license and a legal settlement with Sony. In the year ago period, the company's net profit was $1.2 billion, which was due to a legal settlement with Intel. AMD's revenue stayed consistent at $1.65 billion. AMD began shipping its new microprocessors, called Fusion, during this quarter. [11]
Business Segments
2009 2008 2007 2006
Computing Solutions[12]
Net Revenue $4,131 $4,559 $4,702 $5,367
Operating Income (Loss) $127 $(461) $(712) $679
Graphics[12]
Net Revenue $1,206 $1,165 $992 $189
Operating Income (loss) $50 $12 $(39) $(6)
All Other[12]
Net Revenue $66 $84 $164 $71
Operating Income (loss) $968 $(1,506) $(1,559) $(690)
Total[12]
Net Revenue $5,403 $5,808 $5,858 $5,627
Operating Income (loss) $408 $(1,955) $(2,310) $(17)
Products
Computation Products
Microprocessors: Essentially the brain of a computer, these products are found in all personal computers. AMD produces both single- and dual-core processors, which run both 32- and 64-bit computing.[13]
Servers and Workstations: The single- and dual-core Opteron processors are AMD's server and workstation microprocessing units, similar to their standard microprocessor cousins but made for larger computing projects including business processing (supply chain management, for instance), engineering and web servers. In August 2007, AMD introduced their quad-core AMD Opteron processors.[14]
Embedded Products: These are processors that are designed for devices in non-PC/computer markets. These products are made to meet particular consumer needs that may be outside the scope of PC processor units, like significantly smaller size, higher mobility, or tolerance of harsh environments.[15]
Graphic & Chipset Products: These enhance a computer's graphics capabilities, and can be either stand-alone graphic cards or chipsets that are integrated into motherboards. These products are used in systems designed for gaming or high-level graphic display.[16]
Memory Products: Until its IPO in October 2006, Spansion was a subsidiary of AMD that produced and sold flash memory products. Since its sale, AMD has discontinued its production and sale of flash memory products.[17]
Consumer Electronics: This segment includes processors for gaming consoles, digital televisions and handheld devices. These processors are specialized to fit the needs of a given product line. AMD's processors can be found in Microsoft's Xbox 360, the Nintendo Wii and Nintendo GameCube gaming consoles. (See Game Consoles Wars: Xbox 360 vs. PS3 vs. Wii.)[18]
Computers: AMD has announced their first computer brand named AMD Business Class. The company would develop and design these machines in collaboration with partners like Dell. These desktops would be followed by a range of new laptop products likely to be sold by companies like Acer, Dell, Fujitsu-Siemens, Hewlett-Packard and Lenovo. They will be targeted at the small- and medium-size business market, but would also meet the demands of the biggest corporate clients as well.[19]
Customers
Original Equipment Manufacturers (OEMs) and Original Design Manufacturers (ODMs) are companies that produce computers, handheld devices, and telecommunications and network communications products, and who are among ADM's chief customers. The products that these manufacturers produce rely on the processors that AMD makes.[20]
Third Party Distributors:AMD also sells its products to companies that distribute to smaller OEMs and ODMs.[21]
Industry Metrics
Process Technology and Architecture
Process Technology: this is the technology used in creating microprocessors. AMD's 65nm process technology is considered to be superior to Intel's, but Intel went one step further than AMD when it announced its new 45nm process technology. These numbers (65nm, 45nm) refer to the thickness of the insulation on the transistors inside the microprocessors--with thinner insulation, the density of circuits on a processor can be increased, so processors can be made both smaller and more powerful. Intel's 45nm processor was introduced in early November, while AMD is introducing its own around six months after.
Architecture: architecture refers to the chip design--how many individual processors can be crammed into one single chip. How the chip functions depends on its architecture, and changes in architectural design usually stem from attempts to create more efficient or more powerful processors. Currently, AMD uses both single-core and multi-core architecture for its processors.
Performance Metrics
Microprocessors are typically rated on a number of characteristics that measure their performance. These measurements are the most important factors for determining the success of a specific line of products, and as such they are the focusing points for creators of these chips. Some lines of chips will focus more on one factor than another in an attempt to predict what the market prefers (i.e. faster chips vs. more energy efficient chips, etc.)
Number of cores: Modern CPUs are multicores which means it has two or more processing units operating in parallel. The number of cores, clock speed, the number of threads each core can process in paralell, the cache and memory architecture deterimine the speed of the processor.
Clock Speed: Microprocessor speed is an indicator of how powerful the product is. In this ultra-competitive industry, Intel and AMD compete to produce the faster processor, even if the difference is very minimal. While clock speed is not the only performance factor that determines how good a processor is, it certainly plays a significant role.
Power Usage: processors that can provide the same computing power while using less energy are more efficient and more valuable. Here too, AMD and Intel race to create the most power-desirable chips.
Performance Per Watt: This measures the computing power of a microprocessor per single watt of energy consumed. In 2005, this metric proved to be very important for server processors: AMD's performance-per-watt focused processor was more appealing to the server market than Intel's clock-speed-focused processor because of the significant difference in power usage. AMD's was much more energy-efficient, lowering energy bills for products using its chips. As a result, AMD saw an 18.5% jump in its share of the server market between 2005 and 2006.
Trends and Forces
Semiconductor Cyclicality
The semiconductor industry is deeply cyclical. Demand in up cycles is so high that chip manufacturers have trouble keeping up. Similarly, if electronic sales, particularly PC sales, are slow, demand for chips can plummet. The fact that the semiconductor industry is more subject to the whim of consumer demand more than corporate demand, also adds to the overall volatility. Semiconductor sales have shown about an 80% correlation with GDP growth trends, meaning a downturn in GDP growth could very likely be accompanied by a downturn in semiconductor sales.
Declining PC Sales Decrease Product Demand
The demand for products that use AMD's processors is a significant factor in the success of AMD. Demand for computers has been decreasing growth since the mid 1990s, and as a result, microprocessing companies have seen decreasing growth in profits. IDC expects PC sales to be down 5.3 pct in 2009 as consumers search for cheaper units in a bad economy.[22] In addition the slumping of the world economy, AMD's substantial amount of indebtedness is concerning. For the FY08, the company recorded a debt of $5.1 billion. This amount is large and with no means to repay this debt (loss of $3.1 billion for FY08), the company has to look at ways of cutting debt while increasing profitability. They have announced restructuring measures and headcount reduction methods as ways of achieving cost cutting.[23][24]
New Platform Technology Business
With the acquisition of ATI Technologies in October 2006, AMD was able to begin supplying 3D graphics, video and multimedia products for all types of computers, as well as products for consumer electronics. Before this acquisition AMD was unable to compete with Intel in platform technologies. AMD has developed a notebook platform, called Puma. This platform is designed to be compatible with consumer, business, and high end notebooks, making it a very attractive platform for OEM's. The high end graphics provided by ATI gives AMD's platform a significant advantage over Intel's competing platforms.[25] However, this advantage comes partly from the fact that Intel has had problems with the graphics aspect of its platform, known as Montevina. If Intel can get this chip working then the competition for AMD would increase.
Competition
AMD competes directly with Intel (INTC). Intel has been in the microprocessor industry longer than AMD and has a significant lead in market share, but AMD has been able to gain some of this market share.
With the acquisition of ATI Technologies, AMD hoped to increase its ability to compete with Intel on all levels. However, with the loss of Spansion, AMD's flash memory subsidiary, there are even more areas in which Intel has the outright advantage.
Intel has an enormous amount of power in the microprocessing industry and as a result is able to leverage its market share to gain more customers. This has been a difficult obstacle for AMD to overcome in the past. However, AMD does boast a reputation for better service, making it popular among certain groups of consumers. Lower price points also make certain AMD products preferable to Intel's equivalents. But these recent price wars between the two competing firms have proven to be costly for AMD. Because Intel is so much larger than AMD, it is able to cut costs more effectively and as a result the losses in profit margins (from price cuts) does not affect Intel as severely.
There is another market where AMD has yet to develop a processor. Greater demand for mobility drove the increase in notebook popularity, and now that trend has sparked the rise of netbooks (aka Mobile Internet Devices, or MID's). Intel has released its Atom processors for this market and NVIDIA has released a competing processor called the Tegra. AMD is currently developing a competitor by the name of Ontario, which is set for release in the first quarter of 2011.
In the graphics chips world, the major competitors are Intel and Nvidia. AMD's Radeon line of graphics processors have turned out to be better than expected and are delivering stiff competition to Nvidia in the high end market. AMD executed a differentiating strategy for its high end graphics cards by developing mid range chips but then bundling those chips into its high end graphics cards.[26] Nvidia, on the other hand, generally develops a high end chip and then move that chip down the value chain over time. Intel currently only sells low end graphics chips. AMD's strategy poses possible execution problems over time because it requires advanced inter processor communications, but the design is able to dramatically decrease power consumption.[27] AMD released a dual processor graphics card, named the HD 4870 X2, in August 2008. The is aimed at gaming and is capable of 2.4 trillion operations per second. [28] This card marks an important step in gaining market share from leading graphics producer Nvidia.[29]
For FY09 AMD[3] Intel[4] NVIDIA
Annual Revenue(in M) $5,403 $35,127 $3,326
Net Income (in M) $293 $4,369 $1,176
Number of Employees 10,400 83,500 5,420
Latest Full Context Quarter Ending Date
2010/09
Gross Profit Margin
52.7%
EBIT Margin
24.1%
EBITDA Margin
27.1%
Pre-Tax Profit Margin
19.8%
Interest Coverage
5.6
Current Ratio
1.9
Quick Ratio
1.5
Leverage Ratio
7.5
Receivables Turnover
9.7
Inventory Turnover
5.4
Asset Turnover
1.0
Revenue to Assets
1.4
ROE from Total Operations
207.3%
Return on Invested Capital
45.5%
Return on Assets
27.7%
Debt/Common Equity Ratio
3.56
Price/Book Ratio (Price/Equity)
9.15
Book Value per Share
$0.90
Total Debt/ Equity
3.56
Long-Term Debt to Total Capital
0.78
SG&A as % of Revenue
2.7%
R&D as % of Revenue
22.9%
Receivables per Day Sales
$42.43
Days CGS in Inventory
67
Working Capital per Share
$2.27
Cash per Share
$0.91
Cash Flow per Share
$2.62
Free Cash Flow per Share
$-0.35
Tangible Book Value per Share
$0.36
Price/Cash Flow Ratio
3.1
Price/Free Cash Flow Ratio
-23.8
Price/Tangible Book Ratio
23.12
Most recent data
5-Year Averages
Return on Assets
-12.7%
Return on Invested Capital
-19.5%
Gross Profit Margin
58.8%
Pre-Tax Profit Margin
-18.5%
Post-Tax Profit Margin
-19.1%
Net Profit Margin (Total Operations)
-20.0%
R&D as a % of Sales
27.0%
SG&A as a % of Sales
17.7%
Debt/Equity Ratio
1.50
Total Debt/Equity Ratio
1.57
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