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A year on the rise for AMD

Posted: 01 May 2006 ?? ?Print Version ?Bookmark and Share

Keywords:Rick Merritt? Advanced Micro Devices? AMD? ACE Awards? Opteron?

In April 2005, Advanced Micro Devices Inc. and its CEO, Hector Ruiz, won both Company of the Year and Executive of the Year at the first-ever EE Times ACE Awards. It was just the start of a great year for the company.

Thanks to the technical leadership of its 64bit Opteron and Athlon CPU designs, AMD had already jumped from $3.5 billion to $5 billion in revenue between 2003 and 2004, and it had climbed out of the hole of 2003's $274 million net loss to post a $91 million net profit.

When all was said and done in 2005, the company had taken another leap, netting $165 million on $5.8 billion in revenue. Net sales of its CPUs increased 50 percent in 2005 over the previous year, thanks to increasing unit sales and rising average selling prices.

Tightening its focus on its core PC processor business, AMD spun out its flash memory division, Spansion Inc., in December, diluting its ownership from 60 percent to 37.9 percent. Wall Street called the IPO the largest and one of the most successful of the year.

And in what was arguably the biggest achievement for the company, which had long been plagued by an inability to manufacture its good designs, AMD completed its 300mm Fab 36 in Dresden, Germany. It started shipping 90nm parts from the factory early this year and plans to ship 65nm parts from Dresden before the year is out.

Leadership in design was another theme for 2005, as AMD beat its larger archrival, Intel Corp., by delivering the first dual-core PC processors. It also claimed bragging rights on power consumption, saying its dual-core parts got 13 to 76 percent better performance at substantially lower power consumption than Intel's dual-core parts at that time.

Cray Inc. spent most of the summer of 2005 weighing whether to stick with AMD or shift to Intel for its long-term road map. After examining both CPU companies' road maps, Cray opted to stay with AMD for its high-end systems.

Similarly, Wall Street analysts reported that wunderkind Google was shifting to Opteron-based servers for its massive computer farms. Others speculated that Dell would ship AMD-based systems for the first time before the end of 2006.

"AMD has been building its reputation, one chip at a time," analyst Nathan Brookwood wrote in a report earlier this month. "It has now emerged as a credible alternative to Intel in the markets both companies serve."

U.S. President Bush recently named Ruiz to the President's Council of Advisors on Science and Technology. The council advises the president on issues related to technology, scientific research priorities, and math and science education.

No horizon is without clouds. Intel has just unveiled an upgrade of its X86 architecture that analysts say will put its CPUs closer to technical parity with AMD's, at least until 2007. And AMD still has an outstanding antitrust suit against Intel that alleges Intel uses unfair tactics to confine AMD's share of the market. "I anticipate that each company will at times pull ahead of the other, only to see the other pull ahead at a later date," said Brookwood.

- Rick Merritt
EE Times

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