AMD’s Bet On ARM Does Is Not Working

Buried in the AMD results was a note which seemed to hint that AMD’s plan to flog ARM based server chips was not going very well.

AMD Misses Again

Fabless chipmaker AMD has come up with a mixed set of results for the second quarter. The company managed to make as much cash as the cocaine nose jobs of Wall Street expected, but missed revenue expectations.

In fact its revenues were below the psychologically important billion figure at $942 million.

We knew it was going to be bad. Last week we were warned that the results would be flat. The actual figure was $942m, an 8.5 per cent sequential decline and a 34.6 per cent drop from the same period a year ago.

As you might expect, there are some measures of this not being AMD’s fault. The company is almost entirely dependent on PC sales. Not only have these fallen but don’t look like they are going to pick up for a while.

AMD’s Computing and Graphics division reported revenue of $379m, which was down 54.2 per cent, year-on-year. Its operating loss was $147m, compared to a $6m operating loss for last year’s quarter.

Lisa Su, AMD president and CEO, in a statement said that strong sequential revenue growth in AMD’s enterprise, embedded, and semi-custom segment and channel business was not enough to offset near-term problems in its PC processor business.  This was  due to lower than expected consumer demand that impacted sales to OEMs, she said.

“We continue to execute our long-term strategy while we navigate the current market environment. Our focus is on developing leadership computing and graphics products capable of driving profitable share growth across our target markets,” she added.

In the semi-custom segment, AMD makes chips for video game consoles such as the Nintendo Wii U, Microsoft Xbox One, and Sony PlayStation 4 consoles. That segment did reasonably well, up 13 percent from the previous quarter but down 8 percent from a year ago.

But AMD’s core business of processors and graphics chips fell 29 percent from the previous quarter and 54 percent from a year ago. AMD said it had decreased sales to manufacturers of laptop computers.

Figures like this strap a large target on AMD’s back with a sign saying “take me over” but AMD is not predicting total doom yet.

For the third quarter, AMD expects revenue to increase 6 percent, plus or minus 3 percent, sequentially, which is a fairly conservative outlook given the fact that Windows 10 is expected to push a few sales its way.

AMD supplies chips to the Nintendo Wii U, Microsoft Xbox One, and Sony PlayStation 4 consoles and these seem to be going rather well.

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Did AMD Commit Fraud?

AMD must face claims that it committed securities fraud by hiding problems with the bungled 2011 launch of Llano that eventually led to a $100 million write-down, a US court has decided.

According to Techeye US District Judge Yvonne Gonzales Rogers said plaintiffs had a case that AMD officials misled them by stating in the spring of 2011 and will have to face a full trial.

The lawsuit was over the Llano chip, which AMD had claimed was “the most impressive processor in history.”

AMD originally said that the product launch would happen in the fourth quarter of 2010, sales of the Llano were delayed because of problems at the company’s chip manufacturing plant.

The then Chief Financial Officer Thomas Seifert told analysts on an April 2011 conference call that problems with chip production for the Llano were in the past, and that the company would have ample product for a launch in the second quarter.

Press officers for AMD continued to insist that there were no problems with supply, concealing the fact that it was only shipping Llanos to top-tier computer manufacturers because it did not have enough chips.

By the time AMD ramped up Llano shipments in late 2011, no one wanted them any more, leading to an inventory glut.
AMD disclosed in October 2012 that it was writing down $100 million of Llano inventory as not shiftable.

Shares fell nearly 74 percent from a peak of $8.35 in March 2012 to a low of $2.18 in October 2012 when the market learned the extent of the problems with the Llano launch.

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Intel Shows Off The Xeon SoC

Intel has announced details of its first Xeon system on chip (SoC) which will become the new the Xeon D 1500 processor family.

Although it is being touted as a server, storage and compute applications chip at the “network edge”, word on the street is that it could be under the bonnet of robots during the next apocalypse.

The Xeon D SoCs use the more useful bits of the E3 and Atom SoCs along with 14nm Broadwell core architecture. The Xeon D chip is expected to bring 3.4x better performance per watt than previous Xeon chips.

Lisa Spelman, Intel’s general manager for the Data Centre Products Group, lifted the kimono on the eight-core 2GHz Xeon D 1540 and the four-core 2.2GHz Xeon D 1520, both running at 45W. It also features integrated I/O and networking to slot into microservers and appliances for networking and storage, the firm said.

The chips are also being touted for industrial automation and may see life powering robots on factory floors. Since simple robots can run on basic, low-power processors, there’s no reason why faster chips can’t be plugged into advanced robots for more complex tasks, according to Intel.

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Amazon Web Services Goes Zocalo

Amazon Web Services (AWS) has announced two much-needed boosts to its fledgling Zocalo productivity platform, making the service mobile and allowing for file capacities of up to 5TB.

The service, which is designed to do what Drive does for Google and what Office 365 does for software rental, has gained mobile apps for the first time as Zocalo appears on the Google Play store and Apple App Store.

Amazon also mentions availability on the Kindle store, but we’re not sure about that bit. We assume it means the Amazon App Store for Fire tablet users.

The AWS blog says that the apps allow the user to “work offline, make comments, and securely share documents while you are in the air or on the go.”

A second announcement brings Zocalo into line with the AWS S3 storage on which it is built. Users will receive an update to their Zocalo sync client which will enable file capacities up to 5TB, the same maximum allowed by the Amazon S3 cloud.

To facilitate this, multi-part uploads will allow users to carry on an upload from where it was after a break, deliberate or accidental.

Zocalo was launched in July as the fight for enterprise storage productivity hots up. The service can be trialled for 30 days free of charge, offering 200GB each for up to 50 users.

Rival services from companies including the aforementioned Microsoft and Google, as well as Dropbox and Box, coupled with aggressive price cuts across the sector, have led to burgeoning wars for the hearts and minds of IT managers as Microsoft’s Office monopoly begins to wane.

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Amazon Intel Zeon Inside

Amazon has become the latest vendor to commission a customized Xeon chip from Intel to meet its exact compute requirements, in this case powering new high-performance C4 virtual machine instances on the AWS cloud computing platform.

Amazon announced at the firm’s AWS re:Invent conference in Las Vegas that the latest generation of compute-optimized Amazon Elastic Compute Cloud (EC2) virtual machine instances offer up to 36 virtual CPUs and 60GB of memory.

“These instances are designed to deliver the highest level of processor performance on EC2. If you’ve got the workload, we’ve got the instance,” said AWS chief evangelist Jeff Barr, detailing the new instances on the AWS blog.

The instances are powered by a custom version of Intel’s latest Xeon E5 v3 processor family, identified by Amazon as the Xeon E5-2666 v3. This runs at a base speed of 2.9GHz, and can achieve clock speeds as high as 3.5GHz with Turbo boost.

Amazon is not the first company to commission a customized processor from Intel. Earlier this year, Oracle unveiled new Sun Server X4-4 and Sun Server X4-8 systems with a custom Xeon E7 v2 processor.

The processor is capable of dynamically switching core count, clock frequency and power consumption without the need for a system level reboot, in order to deliver an elastic compute capability that adapts to the demands of the workload.

However, these are just the vendors that have gone public; Intel claims it is delivering over 35 customized versions of the Intel Xeon E5 v3 processor family to various customers.

This is an area the chipmaker seems to be keen on pursuing, especially with companies like cloud service providers that purchase a great many chips.

“We’re really excited to be working with Amazon. Amazon’s platform is the landing zone for a lot of new software development and it’s really exciting to partner with those guys on a SKU that really meets their needs,” said Dave Hill, ‎senior systems engineer in Intel’s Datacenter Group.

Also at AWS re:Invent, Amazon announced the Amazon EC2 Container Service, adding support for Docker on its cloud platform.

Currently available as a preview, the EC2 Container Service is designed to make it easy to run and manage distributed applications on AWS using containers.

Customers will be able to start, stop and manage thousands of containers in seconds, scaling from one container to hundreds of thousands across a managed cluster of Amazon EC2 instances, the firm said.

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Intel Sampling Xeon D 14nm

Intel has announced that it is sampling its Xeon D 14nm processor family, a system on chip (SoC) optimized to deliver Intel Xeon processor performance for hyperscale workloads.

Announcing the news on stage during a keynote at IDF in San Francisco, Intel SVP and GM of the Data Centre Group, Diane Bryant, said that the Intel Xeon processor D, which initially was announced in June, will be based on 14nm process technology and be aimed at mid-range communications.

“We’re pleased to announce that we’re sampling the third generation of the high density [data center system on a chip] product line, but this one is actually based on the Xeon processor, called Xeon D,” Bryant announced. “It’s 14nm and the power levels go down to as low as 15 Watts, so very high density and high performance.”

Intel believes that its Xeon D will serve the needs of high density, optimized servers as that market develops, and for networking it will serve mid-range routers as well as other network appliances, while it will also serve entry and mid-range storage. So, Intel claimed, you will get all of the benefits of Xeon-class reliability and performance, but you will also get a very small footprint and high integration of SoC capability.

This first generation Xeon D chip will also showcase high levels of I/O integrations, including 10Gb Ethernet, and will scale Intel Xeon processor performance, features and reliability to lower power design points, according to Intel.

The Intel Xeon processor D product family will also include data centre processor features such as error correcting code (ECC).

“With high levels of I/O integration and energy efficiency, we expect the Intel Xeon processor D product family to deliver very competitive TCO to our customers,” Bryant said. “The Intel Xeon processor D product family will also be targeted toward hyperscale storage for cloud and mid-range communications market.”

Bryant said that the product is not yet available, but it is being sampled, and the firm will release more details later this year.

This announcement comes just days after Intel launched its Xeon E5 v2 processor family for servers and workstations.

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Vendors Testing New Xeon Processors

Intel is cooking up a hot batch of Xeon processors for servers and workstations, and system vendors have already designed systems that are ready and raring to go as soon as the chips become available.

Boston is one of the companies doing just that, and we know this because it gave us an exclusive peek into its labs to show off what these upgraded systems will look like. While we can’t share any details about the new chips involved yet, we can preview the systems they will appear in, which are awaiting shipment as soon as Intel gives the nod.

Based on chassis designs from Supermicro, with which Boston has a close relationship, the systems comprise custom-built solutions for specific user requirements.

On the workstation side, Boston is readying a mid-range and a high-end system with the new Intel Xeon chips, both based on two-socket Xeon E5-2600v3 rather than the single socket E5-1600v3 versions.

There’s also the mid-range Venom 2301-12T, which comes in a mid-tower chassis and ships with an Nvidia Quadro K4000 card for graphics acceleration. It comes with 64GB of memory and a 240GB SSD as a boot device, plus two 1TB Sata drives configured as a Raid array for data storage.

For extra performance, Boston has also prepared the Venom 2401-12T, which will ship with faster Xeon processors, 128GB of memory and an Nvidia Quadro K6000 graphics card. This also has a 240GB SSD as a boot drive, with two 2TB drives configured as a Raid array for data storage.

Interestingly, Intel’s new Xeon E5-2600v3 processors are designed to work with 2133MHz DDR4 memory instead of the more usual DDR3 RAM, and as you can see in the picture below, DDR4 DIMM modules have slightly longer connectors towards the middle.

For servers, Boston has prepared a 1U rack-mount “pizza box” system, the Boston Value 360p. This is a two-socket server with twin 10Gbps Ethernet ports, support for 64GB of memory and 12Gbps SAS Raid. It can also be configured with NVM Express (NVMe) SSDs connected to the PCI Express bus rather than a standard drive interface.

Boston also previewed a multi-node rack server, the Quattro 12128-6, which is made up of four separate two-socket servers inside a 2U chassis. Each node has up to 64GB of memory, with 12Gbps SAS Raid storage plus a pair of 400GB SSDs.

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Intel Outs New Xeon Chipset

Intel has released details about its new Xeon E7 v2 chipset. The Xeon processor E7 8800/4800/2800 v2 product family is designed to support up to 32-socket servers with configurations of up to 15 processing cores and up to 1.5 terabytes of memory per socket.

The chip is designed for the big data end of the Internet of Things movement, which the processor maker projected will grow to consist of at least 30 billion devices by 2020. Beyond two times better performance power, Intel is promising a few other upgrades with the next generation of this data-focused chipset, including triple the memory capacity, four times the I/O bandwidth and the potential to reduce total cost of ownership by up to 80 percent.

The 15-core variants with the largest thermal envelope (155W) run at 2.8GHz with 37.5MB of cache and 8 GT/s QuickPath connectivity. The lowest-power models in the list have 105W TDPs and run at 2.3GHz with 24MB of cache and 7.2 GT/s of QuickPath bandwidth. There was also talk of 40W, 1.4GHz models at ISSCC but they have not been announced yet.

Intel has signed on nearly two dozen hardware partners to support the platform, including Asus, Cisco, Dell, EMC, and Lenovo. On the software end, Microsoft, SAP, Teradata, Splunk, and Pivotal also already support the new Xeon family. IBM and Oracle are among the few that support Xeon E7 v2 on both sides of the spectrum.

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Should Investors Dump AMD?

If you have any old AMD shares lying around you might like to sell them as fast as you can, according to the bean counters at Goldman Sachs.

Despite the fact that the company is doing rather well, and its share price is has gone up rapidly over recent months, Goldman Sach analysts claim that the writing is on the wall for AMD. It thinks that AMD shares will be worth just $2.50 soon. The stock’s 50-day moving average is currently $2.98.

The company said that while AMD could clean up in the gaming market even if you take those figures into account the stock is trading at 22 times its 2014 CY EPS estimate. In other words the company’s core PC business is still shagged and still will generate 45 per cent of the company’s 2013 revenue.

“We therefore believe this recent move in the stock is just the latest in a long history of unsustainable rallies, and we are downgrading the stock to Sell. We believe the current multiple is unjustified for any company with such significant exposure to the secularly declining PC market,” the firm’s analyst wrote.

Analysts at Sanford C. Bernstein think that the share price will settle on $2.00 and FBR Capital Markets thinks $3.00. In other words if you want to know what is really happening at AMD you might as well ask the cat, than any Wall Street expert.

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