In a previous commentary I reported on Intel's results for the fourth quarter and the year. On January 17th the company announced a major reorganization. Before the changes Intel was divided into two major business, computer chips and communications. The communication unit had an operating loss of $791 million last year. The distinction between computing and communicating is increasingly blurring. The plan is to build platforms or bundles of chips and software for various markets.

The new organization set up has business units focused on mobility, enterprise, home, health and global markets. This is being seen as the first major move by Paul Otellini who will be taking over the reins from retiring CEO Craig Barrett.

On January 19th Intel unveiled its latest Centrino mobile technology for notebook PCs. The new mobile platform is packed with entertainment and business features ranging from blazing-fast graphics to better responsiveness and support for greater security options. Centrino mobile technology includes an Intel processor (Pentium M), the 915 Express chipset family, wireless hardware and network connection software. The company expects more than 150 different notebook designs based on the new Intel Centrino mobile technology (formerly codenamed Sonoma) to be available this year.

Intel said it will introduce its next generation 90-nanometer Pentium M processor (code-named "Dothan") by the end of June and update all the elements of its Centrino mobile technology with its new "Sonoma" technology over the rest of the year.


Although much smaller than Intel, AMD had been capturing market share and beating Intel on the technology front during 2004. But then on January 10th AMD issued a statement that it expected fourth-quarter operating income to be "down significantly" from the third quarter. The stock plunged 26% the next day.

On January 18th AMD announced the results for the fourth quarter and the year. The firm reported record sales of $1.26 billion and operating income of $20 million for the quarter. Sales increased 5% year-over-year and 2% sequentially. The fourth quarter net loss of $30 million which included charges of $49 million, largely associated with the conversion and retirement of debt. This compares to net income of $43 million in the same quarter a year earlier and $44 million in the prior quarter.

Table AMD Quarterly Financial Result

CEO Hector Ruiz began the analysts call by saying “The fourth quarter for AMD was a solid quarter in microprocessor but frankly a freaking dismal quarter in flash. In processors we showed some strong fundamentals but in my view despite year over year gains it was an underwhelming end to an otherwise breakaway year.”

According to Robert J. Rivet, AMD's chief financial officer, “Fourth quarter sales growth was largely due to a nine percent increase in Computation Products Group sales. Record fourth quarter microprocessor sales were driven by increased server and mobile dollar and unit sales. As anticipated, AMD64 processor sales increased to 50 percent of total PC processor sales for the quarter. Memory Group sales were weaker than expected due to an aggressive pricing environment (a 30% decline in flash prices in the second half of the year due to Samsung and Intel, flash represents 43% of AMD revenue), significantly lower sales in Japan, and a delay in qualifying a new product in the wireless segment.

For the full year ended December 26, 2004, AMD achieved record sales of $5 billion, a 42 percent increase from 2003. Net income for the year was $91 million, including charges of $51.6 million. AMD reported sales in 2003 of $3.52 billion and a net loss of $274 million including credits of $13.9 million.

Table AMD Annual Financial Results

“In 2004 both the processor and Flash memory businesses were profitable,” said Robert J. Rivet, AMD's chief financial officer. “Total sales increased by 42 percent compared with 2003, driven by 29 percent growth in our microprocessor business and 65 percent growth in our Flash memory business.”

For guidance the company said “Based on the strong acceptance of AMD64 technology, AMD expects its processor momentum to increase as the year unfolds. In the first quarter, AMD expects processor sales to be flat to down slightly in the typically seasonally down quarter."

AMD expects Flash memory sales to be down in the first quarter due to continued imbalance in supply and demand, continued pressure on ASPs and seasonality.”

Weekly Highlights


TransEDA adds SystemVerilog support and Advanced Rule checking to its leading Verification Navigator tool suite

Toshiba Selects Celoxica for SoC Development

MatrixOne Reports Strong Second Quarter Revenue Growth and Improved Bottom-Line Results

Sanyo Achieves Production Design Success for Digital Consumer Product with Cadence Encounter RTL Compiler

Sequence Low-Power Design Focus Highlights

Sequence Appoints Mark Goldman Vice President of Field Operations

Fujitsu Successfully Completes 66 Consecutive Designs with Cadence Encounter; Cadence Encounter-Based Reference Design Flow Delivers First-Pass Silicon in Japan

Mentor Graphics Announces Synthesis Support for HardCopy II Structured ASIC Devices

Mentor Graphics Announces Synthesis Support for ProASIC3 and ProASIC3E Families

Toshiba Achieves 40 Percent Power Reduction in Latest MeP SoC With Synopsys Galaxy Design Platform

Apache Closes 2004 with Over 3X Growth from the Previous Year; Achieves Eighth Consecutive Record Quarter; Expands Headquarter Operations to Support Growth

MatrixOne Design for Compliance Solution to Help Product Companies Comply With Emerging Environmental Regulations

Cadence Introduces New Mixed-Signal and Radio Frequency Capabilities to Address Wireless Design Challenges

IP and SoC

Varian Semiconductor Announces Presentation at the Thomas Weisel Partners 2005 Technology Conference

IXYS Launches an Isolated Linear Error Amplifier for Closed Loop Control, in Power Supply and Motor Control Products

Applied Micro Circuits Corporation Announces Third Quarter Fiscal 2005 Financial Results

STATS ChipPAC Reports Fourth Quarter and Full Year 2004 Results

LTRIM LTR8333 Power-On Reset Digital System Supervisor

The AMD Athlon 64 FX-55 Processor Reigns as Best Desktop Processor of 2004 According to Leading Market Research Firm In-Stat

Toshiba Achieves 40 Percent Power Reduction in Latest MeP SoC With Synopsys Galaxy Design Platform

EEMBC Validates DENbench Digital Entertainment Benchmark Suite With Certified Processor Scores From AMD, Analog Devices, Freescale, and IBM

Virage Logic Expands Distribution Model; 'First Mover' Status Among Emerging Foundries Underscores Market Leadership

Virage Logic Launches 'Silicon Aware IP' to Maximize Yield, Time-to-Volume at 130nm and Below

StarCore SC2400 Processor Core Wins "Best DSP Licensable Core" Analysts' Choice Award from Microprocessor Reports

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