SAN FRANCISCO--Advanced Micro Devices is embarking on a turn-around
strategy that rests on a simple premise: The PC market and its basic
architecture are dead.
Seizing on a market and design evolution that some argue AMD has
been slow to exploit, the company came out this week with a mea
culpa and a three-pronged strategy for long term growth that
recognizes the quickening decline of the core personal computer
market and its design assumptions.
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"We underestimated the speed of change in our industry," AMD
Rory Read said in an analyst call this week (Oct. 19).
"We expected we'd have several years to transform the AMD business,
but we must implement our transformation on a more aggressive
Staggered by falling revenues in its core business and major staff
cuts two years running, AMD is charting a future that hinges on an
aggressive push into the embedded markets, a significant
transformation of design into heterogeneous computing and the
potential of its $334 million acquisition of SeaMicro in server
applications. It's all part of a broader strategy to remake the
onetime Intel x86 second-source company as a system-on-chip
Goal: Quadruple embedded share Read and Lisa Su, senior vice president and general manager of global
business units, said AMD will expand its embedded business from 5
percent of overall revenues to 20 percent in the next 12 months.
"The key differentiator we have is really in the high-performance
design methodology, microprocessor technology as well as the
graphics IP that we have," Su said.
Executives said they are targeting embedded markets in gaming,
industrial and communications, and the company already has a number
of "confidential" design wins they refused to disclose. When
pressed, Su declined to name potential competition for AMD in the
"Our low-power APUs, graphics IP and reusable design
blocks give us a distinct advantage for building semi-custom APUs
(Accelerated Processor Units) for new embedded markets, which
will outpace the PC industry for the foreseeable future," Read said.
Key issue: Are they going to make it until long term strategy pay's off?
BTW I do not buy there embedded story with APU, this is yet another new product looking for market, that will take 3 ~4 years to happen in volume, once again they do not have time.
Lets see they want to go after Comm's , Gaming, and Industrial.
Seems like Industrial is Embedded Single Board Computer, they have been there since they bought Cyrix from National whats new about Mkt.
Gaming : This yet another mature Mkt? Consoles are all SOC with Graphics IP on it, they have MSFT.
Comm's: This new Mkt where everyone who sells Embedded has presence, what are they going to do differently, for customers, that will make customer say forget Cavium and lets go with AMD? Lets ask Mr Cisco, forget all that custom ASIC, just buy my AMD APU, Let's see Mr Cisco has say about all this.
Seems like Chop shop approach will be needed sooner versus day dreaming, they are headed the CSR way, CSR cut there limb recently to survive Zoran acquisition, by selling there Combo radio with GPS to Samsung.
I have been watching AMD over many many years. It appears that the number of years in which AMD lost money is more than the number of profitable years. I always wonder why the investors were willing to put up with the management of AMD. Now, we are probably seeing the end of AMD.
At EE Times we have seen many chip makers turn to the diverse and fragmented set of "embedded" markets when they could not make a go of it in the big markets such as PC or smartphones.
TI could not carve out a top tier position in mobile for Omap and so is taking it to embedded, i.e. all other markets.
Now AMD is not making enough headway in PCs and tablets so is turning to embedded, a collection of markets it has worked on for many years with marginal results.
But --O, oh-- most "embedded" markets don't need as much graphics umph as AMD has in its IP. What's more, AMD lacks the breadth of experience and contacts to drive its business in medical, industrial, aerospace, military, networking and the dozen other "embedded" markets.
This still leaves one remaining and major question unresolved. We could all easily say "the PC is dead" but there's still the IT and replacement markets. So with AMD totally out of the PC CPU market, will Intel be able to still avoid being tagged as an uncompetitive monopolist, both here and in Europe? The left (represented by the current US administration) is usually the clear opponent of trusts, although the opposition will also be on the hot seat to rectify unfair competitive advantage, especially if the upcoming election results in a reversal of fortune. It should sure be interesting to watch this space for the next few months!
Margins in the embedded space will be far lower. It would have been better for them to target Mobility space. But they probably realize that Investors may not be patient; If we remove Debt from the picture this may be an acquisition/merger candidate for either NVIDIA, Qualcomm or Broadcom or even Samsung;
The best predictor of future performance is past performance. Can anyone point to anything successful that the band of ex-IBM thieves has done that would predict success for AMD? I think that they've all left a trail of fail where they've gone.
As to embedded... let's just assume that we rule out network infrastructure for the moment and count the number of double-digit ASP sockets out there? Buehler? Anyone? How about development cycles? Time to revenue?
While blowing a distant-second position in the compute world, AMD is moving towards a zero-crossing - not just in profit (in which they have proven skills) but in revenue.
Sad. And a lot of good engineers are going to get crushed while the band of thieves get wealthy. Or more wealthy anyway. Hector was just the first raider of the AMD treasury.