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AMD seeks to attain profitability in mini-notebooks

Posted: 18 Nov 2008 ?? ?Print Version ?Bookmark and Share

Keywords:notebook market? processor? smart phone?

One word drives everything Advanced Micro Devices Inc. does these daysprofits. It's in that context AMD officials spent significant time at its annual analyst meeting in California criticizing the mobile x86 markets archrival Intel Corp. is pursuing with its Atom processor.

AMD will deliver a 65nm chipset designed for small notebooks next year, but it will not pursue the class of so-called Mobile Internet Devices (MID) and smart phones that Intel is going after with its current and future Atom CPUs.

"Of all the opportunities we could look into, we have eliminated microprocessors for smart phones," said Randy Allen, general manager, computing solutions group, AMD. "The company will target everything from a mini-notebook to the highest-end of x86 performance, but we are not going any further than that for the foreseeable future," he added.

"We don't expect the MID market to become meaningful relative to other opportunities we can address," Allen said. "It's a tweener between a cellphone and notebook," he added.

Ironically, Intel's Atom processor is one of the few bright spots in an otherwise bleak outlook for PCs.

A Barclays Capital analyst said unit shipments of PC processors will drop about 2 percent in 2009, excluding Atom sales. When Atom sales are added in, sales will increase, albeit by a meager 2 percent, Barclays estimated.

AMD will produce early next year a Yukon platform for mini-notebooks that dissipate no more than 25W. It will be based on a 65nm processor, chipset and graphics to ship in the Q1 09.

"The move is part of a strategic shift at AMD to focus on mainstream PC markets because they hold the majority of the industry's profits," according to an analysis by Allen. "Mainstream and value products represent 60 percent to 75 percent of the profits of desktop, notebook and server sectors," he said.

"It's counter-intuitive because performance segments are the highest margin, but they are completely overwhelmed by higher volumes," he added. "This dictates our strategy of where we focus our investments," he noted.

Allen outlined plans for some 45nm processors and platforms coming in 2009 and 32nm chips debuting in 2011.

AMD's Tigris platform targets mainstream notebooks with a 45nm CPU due in 2H 09. Consumer desktops will be served by a Pisces platform using three- and four-core versions of 45nm processors.

In 2011, AMD will release its first 32nm CPUs, including its first desktop and notebook chips that integrate x86 and graphics cores, the four-core Llano for desktops and two-core Ontario for notebooks.

The Orochi, a 32nm CPU for PC gamers, will have more than four x86 cores but no integrated graphics. The 32nm chips will sport the first ground up core redesigns for AMD in several years.

At the heart of the new road map is a quest for profits, a push that has also driven the company to split off its design and fab operations into separate companies.

AMD reported its first profits in many quarters recently. It believes with the spin-off it can achieve sustainable profits as long as quarterly revenues hit or exceed $1.5 billion, a target that the company thinks is achievable.

"We have the opportunity for the first time ever to turn this company into a cash-generating machine," said Dirk Meyer, president, AMD. "We have collectively had enough of losing money and we want to hear the cash registers ring," he added.

- Rick Merritt
EE Times

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