Analyst: AMD faces 'very aggressive' competition from Intel, Nvidia, and tablets

Analyst: AMD faces 'very aggressive' competition from Intel, Nvidia, and tablets

Summary: AMD is being squeezed from all sides, and the company needs to work on reinvigorating by cutting prices and slashing operating expenses, claims Sterne Agee analyst Vijay Rakesh.


CPU and GPU maker AMD is going to face a tough second half to 2012 as consumers turn their attention to tablets, the PC market becomes soggier, and Intel continues to grab increasing market share in the server market, claims Sterne Agee analyst Vijay Rakesh.

The way AMD is tied to the PC market is a big problem for the company, claims Rakesh. "While expectations in the PC supply chain are high for Win8," writes Rakesh in a company report, "actual PC OEM builds and sell-through might fall short given the plethora of skews with Ultrabooks, WinRT-Android, into a limited holiday window in 4Q12, post a late October Win8 launch".

Translating that from analyst-speak, there's too much competition for buyers' cash, and Windows 8 might not be the huge draw that the OEMs expect it to be.

Another problem facing AMD is pressure in the graphics market from both Nvidia and Intel. Rakesh claims that Intel should be of particular worry to AMD because Ultrabooks are gaining traction and most make exclusive use of Intel graphics.

If that's not enough, Intel's launch of the Romley dual-socket Sandy Bridge EP based servers back in March of this year "presents more headwinds to AMD".

But the biggest pressure that Rakesh sees facing AMD is the price pressure placed on processors as tablet prices approach what he describes as "the magic clearing price" of between $299 and $399. This, he claims, pushes the target processor average selling price down from the $70 to $100 that AMD Fusion APUs sell for to a more reasonable $20 to $50. This is great for buyers, but it's likely to be bad for AMD's bottom line.

"AMD needs to reinvigorate its product mix even as challenges grow despite its new Fusion-Radeon platforms with pricing pressure and Opex [cut in operating expenses]," concludes Rakesh.

Gallery: AMD Embedded G-Series APU

Image source: AMD.

Topics: Processors, Hardware, Tablets

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  • I feel that amd fell behind with Intel's Core i generation

    I mean, bulldozer is just BAD.

    problem is, you fall behind one generation, and you will have a HUGE difficulty trying to catch up
    • Intel was behind

      For a very long time. They are still here today. AMD will survive aswell, they offer a better experience overall.
  • RE:"I mean, bulldozer is just BAD."

    Funny. I run an AMD FX4180 without a single issue. I've run a number of 64-bit OSes on it including Server 2008/2008r2, Ubuntu Server 11.xx/12.xx with KDE, Windows 7, & Vista.
  • X

    i love the idea of the ultrabook, and think AMD could do their own range of them, with more power at a lower cost
    i loved ATI ... ! i don't want AMD to die. i just feel Intel are so normal there's nothing too fascinating about them
  • hai

    and everyone should start making laptops out of metal ! so pretty
  • What happens if...

    AMD licenses ARM in place of x86?

    If Windows RT catches on, as Microsoft and AMD would like (they both frequently speak at processor-agnostic talks about software design), would the shift to low-powered (and less-complex) ARM CPU cores be a cost-savings measure with quicker, but bigger returns over x86?

    When they start manufacturing their own true SoC's, you'll see Intel pushing their own, and NVIDIA will compete on Windows with their ARM chips. At that point, AMD could theoretically just swap out x86 cores in place of ARM cores and still keep the advanced graphics capabilities in their APU, which currently dwarfs NVIDIA's Tegra graphics. ARM, by that time, will likely be very competitive with Intel when processing tasks become less intensive and more GPU-bound. Intel will be looking like a sore loser by not having a leg up on graphics and GPGPU. Windows will, at that time, in it's second generation ARM kernel, will be more fully optimized for the platform.