Due Diligence: AMD's Forecasts, Failures and Excuses

And then came Barcelona.

AMD executives have readily admitted they owe the channel a debt of gratitude for all the years it stuck by AMD as a partner while Tier 1 OEMs ignored it in favor of Intel. Now, for the second year in a row, both the channel and large OEMs are on the short end of AMD blunders, as the company has stumbled badly on its route to shipping the much-anticipated, Opteron quad core processors - - also known as Barcelona.

We worked hard over the past few days to get AMD CEO Hector Ruiz or AMD President Dirk Meyer on the phone to explain to their channel partners what happened this time. They declined our invitation. (CMP Channel's Damon Poeter interviewed AMD's Mario Rivas yesterday.)

Here is a look at AMD executives' remarks, since last year, about supply, demand, forecasts and failure:

Dirk Meyer, in a conference call with financial analysts on Oct. 18, 2006:

"First of all, clearly, the product transition complexity that we've dealt with in our operations is behind us."

Hector Ruiz, on Feb. 21, 2007:

"As far as the channel, frankly, we had a supply logistics issue late in the year (2006) where we were not able to serve our customers as well as we would have liked to, and that not only includes the channel but also OEMs. We took our eye off the ball relative to channel and, unfortunately, that is the result.

"But what happened was the challenge in the mix of our product. It moved so dramatically toward mobile platforms that we couldn't react fast enough. Our mobile platform grew 75 percent quarter over quarter and 95 percent year over year, well beyond anything we could forecast. And in an attempt to react to that, we were unable to supply the channel. We feel bad about it, and we're disappointed. That gave our competitor an opening to gain some mind share with the channel. It is our fault, and we'll deal with it. We'll recover, and we have plans to do that. Those [supply] issues are behind us."

AMD's announcement, on Sept. 10, that it was launching Barcelona:

"Additionally, AMD is providing the channel with a tremendous opportunity to be able to offer their customers Quad-Core AMD Opteron processor-based solutions very soon after launch. AMD Validated Server Program platforms are available today through distribution, empowering channel partners with the opportunity to be early to market with solutions."

Dirk Meyer, answering an analysts' question during AMD's conference call Oct. 18, 2007, to discuss its most recent quarterly earnings:

Chris Danely, JP Morgan: "When do you guys expect to start shipping either at 2.4 GHz or 2.5 GHz Barcelona?"

Dirk Meyer: "The plans that we have haven't changed from what we talked about around the time frame of the Barcelona launch, which is to ship the 2.5 GHz product in the middle of this quarter."

Mario Rivas, head of AMD's Computing Products Group, in an interview with Channelweb, on Dec. 10, 2007, discussing the company's decision to hold off on volume shipments of those chips until next quarter:

"Now if I was to do it all over again, I have to tell you, with the data I had at the time, I would make the same decision again. With the data I have now, clearly, that was a stupid decision. But with the data I had that day, it was the right decision." AMD's stock price has been under pressure, as has been its cash flow. Still, even with that and this latest product goof up, not everybody is down on the company.

Yesterday, a document became public at the SEC which indicates the joint entity of The Growth Fund of America and Capital Research and Management have teamed up to take a 10.8 percent ownership stake in AMD, just weeks after Mubadala Development Company bought an 8.1 percent stake in the company.

Update and Correction at 1:30 p.m. ET: As a reader points out, Growth Fund and Capital Research do own 10.8 percent, but it's actually a decline from earlier holdings.