A little bit ago AMD sent out an announcement updating their official outlook for the second quarter of 2015. Though we don’t typically publish financial projections, the long and short of it is that AMD is looking to brace investors for a worse than expected Q2, after an already difficult Q1. Soft APU sales are being blamed for dragging down both revenue and gross margins, with AMD now expecting Q2 revenue to be down 8% sequentially, or around $950M, while the non-GAAP gross margin will be just 28%.

Much more interesting however is this little nugget of information buried in the announcement towards the end, offering a short update on AMD’s 20nm plans. AMD had previously announced their intentions to bring out some products at 20nm – these were most likely just APUs, with the only one we explicitly know about being the now-canceled Skybridge. In any case, AMD is now confirming that they have moved several of their 20nm designs to a “leading-edge FinFET node,” and as far as we know AMD no longer has any further 20nm projects in the pipeline. AMD’s press release does not state which foundries these products are now at – or indeed if they’re at multiple foundries – so it’s unknown at this time whether the work is at TSMC, GlobalFoundries, or split between the two of them.

The rationale for announcing this shift at this time comes from the financial aspect. AMD will be taking a $33M charge to their GAAP gross margin as part of the work required to move these designs to a new node. Jumping to FinFET nodes should improve the competitiveness of these products, and greatly so in the case of anything that needs to clock high or is otherwise heavily exposed to leakage, but of course this will take additional time and engineering resources in order to transition these products.

We expect AMD to discuss the issue in at least a bit more depth later next week, when they hold their Q2 earnings call on July 16th.

Source: AMD

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  • behrangsa - Monday, July 6, 2015 - link

    And not necessarily TSMC's...
  • zodiacfml - Tuesday, July 7, 2015 - link

    This is the reason why Intel is ChipZilla. They truly have an advantage in process nodes despite what other companies tell, such as Samsung. I still think Samsung's 16nm process doesn't have the scale or yields yet for their own benefit or other companies.
  • mrdude - Monday, July 6, 2015 - link

    If they keep up this downward slide, at some point they'll be within range of us, the readers of Anandtech, pooling together enough pennies (wouldn't need that many of them) found under couch cushions and purchasing the company...

    ... then promptly firing everyone that works there.
  • Penti - Monday, July 6, 2015 - link

    Anyone can buy shares, and the owner of GloFo is still invested in AMD and probably has an interest in seeing them succeed with a new product on a new process. The institutional owners hasn't abandoned them. They won't go private yet.
  • Nagorak - Monday, July 6, 2015 - link

    I think with AMD it's more likely they go bankrupt or get bought up by another tech company than go private. When a company is taken private it's usually a successful, not too indebted company that is then levered up to pay for the buy out. AMD already has a lot of debt against it, and it's not profitable. It's a bad target for being taken private.

    It makes more sense for someone trying to get graphics and/or CPU tech. Like a halfway decent argument can be made for MS buying them since they won't have to pay for CPUs for their conoles.
  • Penti - Monday, July 6, 2015 - link

    That is really no argument at all as AMD could simply sell the rights of the SoC's, even the whole the Jaguar arch and the right to use the specific GCN part to Microsoft for them to fab it (pay the fab) and shrink the design themselves. Sony certainly would if they would be sold to Microsoft. If Intel would allow it.

    A split of the GPU-business could happen, but I don't see anyone really interested in that. ATI/AMD exited several businesses and would only have desktop/workstation graphics cards if they split. Plus a minor presence in discrete cards for notebooks. No TV/STB, no handheld. Don't see why any semiconductor business would acquire them. They could only license their graphics to AMD when it comes to integrated graphics. They are not ready to compete with ImgTec, ARM, etc and the organization doesn't fit those markets.

    AMD has no majority owner, they could get one without going private but that is unlikely, they would be outright bought and taken private (and probably merged – mergers are seldom successful) if anyone could make a deal to buy all the stocks including those not on the stock exchange. If they see an investment they would likely just do as before issue new stocks for those investing. Abu Dhabi owns ~18% of AMD and would be the most likely buyer as I said. They also owns Globalfoundries. I guess they could spin-off the graphics business into a separate company again and take some of that company to the stock exchange still holding some shares. But who would invest and how would that put money into the graphics business when AMD would get all the initial money for the shares? Where would all that graphics tech go? Who would use it? It would take years to develop good IP for the ARM SoC space. It's not like IBM or some other HPC company wants to buy them.
  • KenLuskin - Monday, July 6, 2015 - link

    AMD's CEO Hints at BUYOUT!
  • chizow - Monday, July 6, 2015 - link

    Warned about this in the E3/Fury X run-up, that it was all song and dance to trump up a stack of Rebrandeons and a flagship part that wasn't going to deliver what they promised. That, along with more rumors of buyout sent AMD stock prices soaring, but this news of course brings them back to reality. $2 price target before earnings was what I said then, and it looks like I was right. ;)

    Down to $2.13 in after hours trading, expect more of the same once markets open tomorrow AM.
  • doggface - Monday, July 6, 2015 - link

    If AMD wants to make a profit... Or any OEM for that matter.

    Make a 13" laptop with 8GB/128GB/1080p for $5-600 USD. If AMD can make the processor that fits in that laptop... Money!!!!
    Srsly. Do it. I am sick of these 15" 768p monsters.
  • Penti - Monday, July 6, 2015 - link

    You can fit a dual-core Haswell/Broadwell/Skylake into a 500-600 USD laptop no problem. There's 1080 15-inch E-IPS panels in 600 dollar laptops.

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