February 3, 2012 -- AMD's (NYSE:AMD) new president and CEO Rory P. Read detailed what he called an "ambidextrous" strategy for the company, building on its x86 and graphics intellectual property (IP) while incorporating other technologies and IP for differentiation in the electronics marketplace.
AMD's "SoC-centric roadmap" targets faster time-to-market, sustained execution, and more tailored customer offerings. AMD will use system on chip (SoC) design methodology to approach processor design with a modular strategy, using best-practice tools and microprocessor design flows, and re-using IP and design blocks across a range of products, Read asserted. The company has hinted at this strategy recently, as at the Global Interposer Tech conference. CTO Byran Black stated that AMD's "Southbridge" chip was probably the last that would be impacted by scaling, reported Dr. Phil Garrou from the meeting. In the future, chip companies will be focusing process node development on specific application functionalities, Black said. Check out the story here: 2.5D announcements at the Global Interposer Tech conference
The next era of the semiconductor industry will be defined by "the convergence of technologies and devices," said Read, naming off strengthening trends of consumerization, the Cloud, and convergence.
AMD is signaling a "willingness to not manufacture at the leading edge," said Barclays Capital's C.J. Muse. Pros? Notebook and gaming application successes. Cons? Structural concerns continue, said Muse, with pressure from Intel at the high end and ARM at the low end. There also exists risk around execution of AMD's move from SOI to bulk.
With the completion of the GlobalFoundries deconsolidation (2010) and the settlement with INTC (2009) to resolve all outstanding licensing disputes, AMD completed its transformation to a fabless design company, Credit Suisse analysts noted.
Strategically, AMD appears on the right track as the company has boosted ASPs, margins and cash flow in 2011 despite poor availability of 32nm products, added the analysts at Deutsche Bank, though warning that AMD will face revenue headwinds in the GPU sector specifically.
AMD updated its product roadmaps for AMD central processing units (CPU) and accelerated processing units (APU) through 2013. The devices aim for low power consumption, integration into new device form factors like tablets and ultrabooks, and connection to the Cloud. AMD is unlikely to enter the smartphone market, Deutsche Bank noted, focusing on "more traditional devices and tablets."
"AMD did not announce an ARM-based processor strategy (though it did not deny it either); did not discuss thoughts around partner manufacturing (TSM processor manufacturing at 32 nm?); and did not discuss many specifics regarding closing its performance/watt APU lag versus Intel in both mobile and server processers, other than to say it would be competitive," lamented Craig Berger at FBR Capital Markets. He noted that "AMD did talk about doubling down in mobile APUs (thin and light segment), cloud server solutions, and embedded solutions."
Read's 1st analyst day left Credit Suisse with "some rather large open questions" as well, although the company is "clearly broadening their market focus, pursuing a more customized SoC strategy, and leaving open the possibility of a hybrid x86/ARM/MIPs architectural approach," say Credit Suisse analysts. "A broadening of market applications implies increased risk, the fruits of which are unlikely to be realized until 2013 at the earliest, as execution has been a key impediment in recent years."
AMD's updated product roadmap features:
Second-generation mainstream (Trinity) and low-power (Brazos 2.0) APUs for notebooks and desktops. "The 2H12 release of the Trinity APU (and 2013 follow on "Kaveri," built using Steamroller cores) will help solidify the company’s mobile strategy as early design-win momentum is thus far stronger than Llano’s," said Berger. AMD's 32nm Trinity APU offers 2x the performance/watt of Llano and improved graphics functionality for high-end notebooks, noted Credit Suisse. The 40nm Brazos 2.0 (replacing 28nm Krishna) is also a "step up."
Hondo, an ultra-low-power APU designed for ultrabooks and Windows 8 tablets that FBR Capital Markets calls "an interesting addition".
And new CPU cores in 2012 and 2013 with Piledriver, Steamroller, and Bobcat's successor Jaguar.
In 2013, AMD expects to transition its entire portfolio to 28nm based on the Steamroller x86 core, said Credit Suisse. The Brazos and Hondo parts will be refreshed with Kabini and Temash, elaborated FBR, both built with the Bobcat core architectural update Jaguar and designed for ultra-low-power applications like ultrabooks (which AMD called ultrathins) and tablets. Both chips will be SoC, which integrate the South Bridge and other functionality to allow for greater performance and power specifications.
For datacenters, AMD will release three server parts to cater to traditional servers (Interlagos, already out), power optimized servers (Valencia), and microservers (Zurich). AMD acknowledges that it is a behind the curve in servers but realizes its importance to driving profitable growth, Credit Suisse pointed out. The three refreshes (Abu Dhabi, Seoul, and Delhi, respectively) will all be built on the improved Piledriver architecture, the refresh from the underwhelming Bulldozer architecture. In graphics, the company will release the “Southern Islands” discrete graphics products at 28 nm in 2012 and its next-generation GPUs under the “Sea Islands” architecture in 2013.
Sterne Agee analysts see AMD possibly ramping its Bulldozer shipments ahead of Intel, which could be a good sign for AMD's market share. With the 32 nm Llano yield issues resolved, AMD should be positioned more attractively, Vijay Rakesh, Sterne Agee, reports. "AMD will deliver competitive products with Llano and Bulldozer, which should position AMD to slowly chip away at market share with competitive pricing versus peer INTC," Rakesh concludes.
In 2012, AMD plans to introduce four new AMD Opteron processors.
AMD is working to make Heterogeneous System Architecture (HSA), which enables software developers to program APUs by combining scalar processing on the CPU with parallel processing on the graphics processing unit (GPU), an open industry standard for the developer community. HSA "should allow [AMD] to embed its own or third-party IP (ARM?) into its SOC-type solutions and quickly marry this technology to its foundry partners' processes," noted Berger. The company plans to hold its 2nd annual AMD Fusion Developer Summit in June 2012.
FBR's final take: The new roadmap will help AMD address markets outside of the traditional PC sector. SoCs built with low power specifications will address the ultrathin mobile electronics market, as well as the Windows 8 tablet PC opportunity expected to ramp at the end of 2012. AMD is also leveraging its strength in new graphics architectures to further penetrate the gaming and game console market. Additionally, the company’s new lower-power focus will allow it to gain share in the low-power server market, an area previously unavailable to AMD. Management is also focused on new applications for APUs, particularly in the embedded processing market.
AMD has added Mark Papermaster as senior vice president and chief technology officer (CTO), Rajan Naik as senior vice president and chief strategy officer (CSO), and Lisa Su as senior vice president and general manager, Global Business Units.
AMD (NYSE: AMD) is a semiconductor design innovator leading the next era of vivid digital experiences with its groundbreaking AMD Accelerated Processing Units (APUs) that power a wide range of computing devices. AMD's server computing products are focused on driving industry-leading cloud computing and virtualization environments. AMD's superior graphics technologies are found in a variety of solutions ranging from game consoles, PCs to supercomputers. For more information, visit http://www.amd.com.