Phenom II Earns a Financially Troubled AMD Less per Chip than Core 2 Quad

The global economy isn’t exactly strong right now. People are still buying, just not nearly as much as before when it felt like money grew on trees. Financially, all companies have been hurt, but AMD has much bigger issues. The table below shows net income in millions of US dollars before taxes for AMD and Intel over the past four quarters:

Yeah. Ouch. Granted Intel going from ~$2.8B of income in a quarter down to under $400M must’ve hurt, but AMD has lost over $2.3B in the past four quarters. The company isn’t profitable and unfortunately is stuck between a rock and a hard place when it comes to fixing that.

The financial issues extend beyond simple CPU sales but I must point out the obvious issue with AMD’s current strategy. We know that the Phenom II is competitive, but look at what it’s competing against:

Every single Phenom II uses a single 258 mm2 45nm die, that’s nearly Nehalem-sized. The problem is that the Phenom II parts generally compete against Intel’s Core 2 Quad Q9x00 and Q8xxx series, both of which have a total die size of 164mm2. AMD’s Phenom II die is 57% larger.

AMD and Intel both manufacture on 300mm wafers, but Intel can get nearly 60% more CPUs for each wafer than AMD can thanks to its die size advantage. That translates into more revenue per wafer and a significant profit advantage for Intel.

AMD’s Phenom II is very competitive, but the strategy does not have much long term staying power. AMD needs to introduce smaller die versions of its CPUs soon.

The deeper ramifications of AMD’s current situation are troubling. I’m not sure what impact all of this is having on the development of AMD’s next-generation architectures, but I suspect that it can’t be good.

The Test