AMD ANNOUNCED a pretty horrible quarter with a net loss of $358m, or $.59 a share at 42 per cent margins. The operating loss of $264m included $50m for the ATI acquisition.

Basically, all segments were down, and that is no shock, they simply didn't have product to sell. The official word is that the cause was 'softening demand for previous generations', something that is normally offset by new product. AMD's woes are based on the fact that the new product is a year late and 500MHz short.

This blew them out of the water on the server side, and that is where the margins are. That lack of new cores is starting to trickle down to desktops, making things worse and worse. On the up side, Barcelona cores are finally starting to ship in a form that OEMs will touch with a 10 foot pole, and triple core is making Intel very nervous.

The other bright spot is graphics, ATI has much higher margins and stayed level, at $-11m, despite the normal seasonal down turn. Given that they are going to gain huge market share in the lucrative notebook segment this year, things are looking up in a big way there.

The biggest theme of the day was cost reduction. Now they are at about a $2B break even point, and the goal is to get that down to $1.5B, quite a large goal. You know about the layoffs, that and dropping capex by basically mothballing Fab 30/38 for the short term.

In the end, things are grim, no question there. They are losing money, and are promising break even in Q3. The main way to get there is cutting costs, the other is to introduce 45nm products. Because of the recent track record, we will see if they can actually execute on that promise.

One last note, the whole asset lite/asset smart bit, they didn't comment on it in any way until Hector slipped up when he was asked about fabs and leadership. He replied by saying that ownership was not necessarily indicative of leadership. I wonder what that means? µ