Just yesterday, there was a "fireside chat" between Hans Mosesmann and John Byrne, the Senior VP and Chief Sales Officer of Advanced Micro Devices, Inc (NYSE: AMD), at the Raymond James Systems, Semiconductors, Software & Supply Chain Conference and the transcript of the chat is now available on Seeking Alpha here. John has been with the company for six years and has been the Chief Sales Officer since August of last year. I should point out that we have had AMD in our SmallCap Network Elite Opportunity (SCN EO) portfolio since last summer and its been an up and down ride for us with the down ride usually coming after earnings reports (right now, we are down around 3.88%). With that in mind, here are a few highlights from the "fireside chat" with John Byrne:
Staying in the The PC Market. John began by talking about Advanced Micro Devices's shift in strategy, but he quickly reiterated that they aren't abandoning the PC market because:
…it's still a $300 million plus unit market. So we are going to play in that space. But we are going to attack ultra low power in the client market surely we can see a huge transformation in that space. We're going to continue to attack professional graphics, some $1 billion, $1.2 billion market which actually leverages perfectly into if you look at our Technology and our Graphics business. We are going to attack the embedded space. The embedded space is a $7 billion market.
Later on, he pointed out that:
The PC market has gone traditionally from a 90 million unit per quarter give or take to 80 million units per quarter. And then you then look, you got to separate it consumer and commercial. Commercial has been relatively robust. Commercial market has been declining low single-digits, but if you look at consumer, the consumer market is actually - the consumer PC has been declining double-digit percentage in 2013.
He also added that AMD believes the Commercial market is going to be down single-digit in 2014 and they are attacking the commercial space. In fact and in India, there was probably the largest commercial tender issued this year for 1.5 million units in Q2. Moreover, AMD "historically has done very well in the DIY and the desktop marketplace" plus they have market share of more than 40% in China.
Tackling the Server Business. John noted that the Dense Server space is one of our five pillars AMD is targeting and that ARM products actually allows them to address data center concerns over issues like costs, space etc. He then commented:
The question is, okay, can AMD win? There is going to be possibly a nine Arm/server predators. We believe we can. It's not a mode of just bringing the server piece of silicon to the marketplace and saying okay, we are going to win. AMD has over 10 to 15 years of server experience. We have sold over multi-millions of server products. What does that require? It's not just hardware. You got to have the software capability. You have to bring the platforms to market.
John also stated that:
2014 is really about marketing, it's about design wins, it's about announcing where the market is going. Our passionate belief is that space by 2017, Hans will be in the region of 20% of the server market. I think the server market today is in region of 10 million units. It's an $11 billion market.
How AMD Landed Both Sony and Microsoft. When asked how Advanced Micro Devices landed both the Sony Corporation (NYSE: SNE) Playstation 4 and the Microsoft Corporation (NASDAQ: MSFT) Xbox, Byrne explained that it was based upon the company's IP plus having "world-class x86" and "world-class graphics capability." He also commented that the cycle of these types of products has traditionally been five to seven years, but if you look at the peak years or predominantly year number, its year number three. In other words, both the Playstation 4 and the Xbox have yet to really reward AMD.
Share Performance. Yesterday, Advanced Micro Devices rose 2.48% to $3.72 for a market cap of $2.69 billion. AMD is also up 55% since the start of the year and up 74.6% over the past five years:
Finally, here is a look at the latest somewhat bearish technical chart for AMD:
With the above performance in mind, the entire fireside chat with John Byrne Raymond James Systems, Semiconductors, Software & Supply Chain Conference is probably worth reading by current and would be investors and traders alike.
SmallCap Network Elite Opportunity (SCN EO) has an open position in AMD. To find out what other open positions SCN EO currently has, and to learn why so many traders and investors are relying on this premium subscription service, click here to find out more.
No comments:
Post a Comment