AMD’s New Chip Can’t Save it

By Douglas A. McIntyre Published Sep 10, 5:16AM EDT

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AMD (AMD) launches it new Barcelona quad-core chip today. With four processors in one, it offers server and PC manufacturers a new level of computing power at a relatively low price. The problem is that Intel (INTC) has already launched a similar product of its own.

Intel has been so successful at taking back market share from AMD over the last 18 months that shares in the smaller company have fallen from $42 in January 2006 to $13. When AMD bought graphics chip company ATI, it took on boat loads of debt, leading to concerns that it cannot meet its obligations on the interest. AMD’s two most senior sales executives recently left the company and CEO Hector Ruiz appears to have no idea how to get the company out of its predicament

According to the company’s 10-Q, it lost $600 million last quarter on revenue of $1.378 billion. Pricing pressures have caused its gross margins to collapse. The balance sheet shows long-term debt of over $5.3 billion.

If Intel had not launched a competing product, Barcelona might have a chance to pick up market share from its larger competitor.

But, if wishes were horses, all the beggars would ride.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.