How Can AMD Be Fixed?By Bryan Gardiner | Posted 2007-04-12 Email Print
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Following news of a corporate restructuring and dramatic price cuts at Advanced Micro Devices, analysts are asking where the company went wrong and what can be done to fix it. (ExtremeTech)On almost all fronts, it's been a tough year so far for Advanced Micro Devices.
The fierce competition between the chip maker, based in Sunnyvale, Calif., and its rival, Intel, continues to take its toll on the company, with AMD's revenues slipping sharply quarter over quarter due to lower unit salesespecially in the resale channel.
The answer to each question is tied up in the other. But the early consensus among analysts is that the changes won't need to be drastic, and that the company should find its way back to profitability later in 2007.
Nevertheless, there are still some worrying areas of weakness.
AMD has already revealed some of the specifics of its restructuring plan: a reduction of 2007 capital expenditures by approximately $500 million, which the company believes will not materially impact capacity plans for the year; a corresponding reduction in "discretionary" expenses; and limiting new hires to fill just critical positions.
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