AMD just released some dismal numbers, along with announcement of substantial impending layoffs. Some have rightly asked — is this the end for AMD? I don’t think AMD is in imminent threat of going under, but clearly they have to do something and do it soon to remain relevant.

But it won’t be that easy.

First, AMD has virtually no mobile strategy (I kid that AMD stands for Absent from Mobile Devices)! Yes, the company just released Hondo, which is a chip targeted at tablets. But it only works with Windows. Where is AMD’s solution for other platforms? (I haven’t seen an Android implementation for the chip yet.)

Next, AMD’s strategy against Intel in the PC space has been to sell at a lower price. But its CPU performance has not kept pace with Intel’s (although AMD’s GPU is better). This is impeding AMD’s ability to sell, even with a lower cost, and Intel is getting more price aggressive blunting their price advantage. And Intel’s marketing advantage often negates any price advantage AMD has at point of sale.

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Third, AMD is at the mercy of third party foundries. This means it’s unable to keep up with Intel around process technologies, so it remains one to two generations behind Intel in fabrication processes. This affects chip power/performance/size/cost, and it’s a big deal in an ultra competitive marketplace.

Finally, and perhaps most importantly, the stand alone graphics market, on which AMD generate lots of revenue, is shrinking quickly as more capable graphics make it to the combined CPU/GPU chips. This means AMD can’t command the higher prices it once did for superior graphics, when on board graphics is good enough for most users. That puts AMD in a bind.

AMD CEO Rory Read

Above: AMD CEO Rory Read

Image Credit: Dean Takahashi

I suspect that, if push comes to shove, someone will throw the company a lifeline (though it likely won’t be Intel). It would probably be a foreign investor who wants to own (or invest in) a semiconductor company. I don’t see any of the US-based chip companies (e.g., Qualcomm, Broadcom, NVidia) wanting the remains of AMD, even with some substantial IP assets. In fact Qualcomm bought AMD’s mobile graphics IP years ago and now constitutes its graphics subsystems integrated into its mobile chips — its hard to see what else it could gain with an acquisition.

It would be a bad thing for the market if AMD went away, since it would only be Intel left standing in x86. And, of course, competition is a good thing. Can AMD recover from this?

Perhaps, but it needs to find a reason why it’s relevant in the market (and not just compete on price). AMD did that several years ago when Intel got complacent. It hasn’t happened since. Some have suggested that AMD invest in ARM technology to hit the mobile market. I don’t think that’s a good idea, as I don’t think it has the resources to concentrate on both ARM and x86.

But AMD clearly needs to do something to get mobile. AMD bought Sea Micro because it would be a good vehicle for it to expand business in a new growth area. But that could take years. And the hardware business is different than the chip business (although AMD did get some interesting technology along with the acquisition).

So, my bottom line: AMD has a tough road ahead, especially given current market conditions of reduced PC shipments, including lower number of graphics cards, and a market shifting to mobile devices. The company doesn’t have forever to get its act together if it wants to become relevant again.

If AMD continues to move on this trajectory, Intel will clean its clock in the x86 world, and ARM will do the same the mobile world. That’s a lot of clock cleaning AMD has to look forward to.

One final thought: since the new management team has not yet been able to turn things around, how long will the investors let them go before demanding change?

Jack Gold is the founder and principal analyst at J.Gold Associates, based in Northborough, Mass. He covers the many aspects of business and consumer computing and emerging technologies.