Analyst: AMD-ARM deal makes no sense

SAN JOSE, Calif.--ARM Holdings plc is trying to persuade Advanced Micro Devices Inc., the long-time rival to global chip leader Intel Corp., to license ARM processors and use them instead of the x86 architecture.

This makes little or no sense for AMD--at least according to one analyst. ''AMD is committed to x86; for now,'' said Hans Mosesmann, an analyst with Raymond James & Associates Inc., in a report.

''Not surprisingly until AMD hires a new CEO the big strategic decisions such as pursuing or not an ARM processor core strategy will be on the backburner,'' he said. ''Our two cents: we do not see an AMD value-add in the ARM market.''

Earlier this year, Dirk Meyer, president and CEO of AMD, resigned from the company after two years as its top executive. Thomas Seifert, AMD's chief financial officer and senior vice president, was appointed interim CEO of AMD.

In the report, Mosesmann said he recently had a chance to ''catch up'' with AMD senior vice president and chief marketing officer Nigel Dessau. ''Dessau deflected AMD’s lack of tablet strategy other than to say that the company views it simply as an ultra low power part of the market and as such, given tablets are such a small market today, AMD intends to intersect higher tablet volumes as part of the normal scale down of its Fusion portfolio,'' he said.

AMD could shake up the market on another front. ''A potentially more interesting catalyst for AMD later this year is in the server cloud/datacenter arena with the upcoming Bulldozer core,'' Mosesmann said. ''We doubt Bulldozer will disrupt much the competitive dynamic in enterprise but it is a long awaited update for the Opteron brand and may play very nicely in large datacenter applications where performance/watt/dollar may trump performance or performance/watt.''

Last year, AMD made its first public presentations on Bulldozer. Bulldozer, which targets everything from mainstream notebooks to high-end servers, will come toward the end of 2011. The longer time to market is due in part to the fact the chip is the second in line to be made in GlobalFoundries' 32-nm process.

The fab's first major 32-nm processor is AMD's previously-announced Llano, the first member of AMD's Fusion family which merges x86 and graphics cores. It is also AMD's first processor, based on high-k and metal gates.
 
''Look for AMD’s consumer PC campaign to get an important volume kick with the launch of the Llano processor, or APU (CPU and graphics in one chip), in June (likely at the Computex show in Taiwan),'' according to the analyst. ''Llano on its own doesn’t solve or relate necessarily to success in commercial PCs and or/the server markets; however, it’s a much needed solution that has been a hole in AMD’s product portfolio.''

Where does Llano fit? ''Llano will be positioned roughly in the segment where the Intel Sandy Bridge-based Core i3 resides and perhaps the lower end of the Core i5,'' he said. ''Llano seems positioned at or slightly below where we had expected; however, given the success of the lower-end Brazos Fusion APU (targeting netbook level price points), we suspect market adoption will be quite reasonable. AMD is delighted in Intel emphasis of Sandy Bridge’s graphics performance as Llano should easily trump it in classical graphics metrics.''