AMD turnaround depends on next-gen Fusion

Move to refocus brand away from "cores and hertz" in right direction, but chipmaker will be challenged to keep pace with Intel's frequent and swift technological advances, say market analysts.
Written by Edwin Yapp, Contributor

PETALING JAYA--AMD has outlined some broad strategies that include enhanced visual performance of its chips in a bid to regain some marketshare, but industry analysts remain cautious about the company's chances to turn things around.

In an e-mail interview with ZDNet Asia, Ben Williams, AMD's Asia-Pacific corporate vice president and general manager, noted that the chipmaker will continue to differentiate itself by leveraging AMD Radeon graphics technology to provide optimal visual experience on PCs.

"This is especially relevant in the marketplace today as applications are more graphical," Williams said. "Our approach is to lead the next era of vivid digital experiences with our ground-breaking AMD Fusion accelerated processing units (APUs)."

He added that the company's Fusion family, with their low power and integrated CPU and DirectX 11 GPU (graphical processing unit) processing capabilities, are strong offerings that will allow AMD's manufacturing partners to design compelling form factors and meet consumer demand. This includes the tablet market, he said, where hardware vendors such as Acer and MSi have announced tablets based on the 2011 AMD low-power platform.

Asked how AMD is expecting Fusion products to perform in the market, Williams remained coy, noting that the chipmaker is "not making any forward-looking projections but is seeing positive reaction" now that AMD Fusion-based systems are available in Malaysia and across the Asia-Pacific region.

"AMD is an admirable engineering company but it is difficult to imagine it taking a leadership role in this transition."
-- Christian Heidarson

"Worldwide, we have over 150 design wins with our partners and customers, and over 35 will be available in Asia-Pacific during the first half of 2011," he said. "We are getting very positive feedback from all our stakeholders in the region."

Uphill climb against Intel
While AMD believes it is making strides in the market with Fusion products, analysts noted that the chipmaker still faces significant challenges to recapture the market.

Christian Heidarson, Gartner's principal research analyst for semiconductors, said AMD is moving in the right direction by refocusing its branding, from "cores and hertz" to consumers, to align itself with Intel's i3/i5/i7.

However, Heidarson told ZDNet Asia that AMD would still have to become "an entirely different company to leapfrog Intel and gain any significant share".

"AMD is an admirable engineering company but it is difficult to imagine it taking a leadership role in this transition," he said.

He noted that while Fusion introduced integrated graphic chipsets, a radical notion when AMD acquired ATI in 2006, its products did not reach the market before Intel offerings did.

AMD has some very interesting ambitions to take the CPU-GPU integration further than Intel, but it may be a question of "too late and in the wrong direction," the Gartner analyst said.

Tim Chuah, principal consultant for Frost & Sullivan, noted that the tablet market is the next hotspot for growth in the semiconductor sector, and AMD will have to ride this wave to be able to compete with Intel and other chipmakers.

Chuah said in an e-mail: "AMD needs to view these market opportunities in tandem with its next-generation chips for PCs as part of its long-term survival plans.

"The success of second-generation APU products will set the ground for a turnaround for AMD, but much will depend on how the company capitalizes on this product and gains headway into the netbook market," he said.

Ng Juan Jin, associate market analyst for IDC Malaysia, noted that AMD's challenges going forward would be to keep up with Intel's frequent and rapid advances in technology and change the consumer market's obsession with Intel processors.

"The main challenge for the new CEO will include having to convince principals and major channels to adopt more AMD processors in their new lineups," Ng said.

Expanding in Malaysia
Meanwhile, AMD last week launched a new global services center in Cyberjaya, about 70 kilometers southwest of the capital, Kuala Lumpur.

"Malaysia is important for AMD with 1,100 employees in three locations, and we have plans to hire more in the coming years," said Devinder Kumar, senior vice president and corporate controller. "Over the years, we have been impressed by Malaysia's multi-cultural society and educated workforce with multi-language competency."

Established to meet growing demand for organizational and operational services within the AMD's global network, the center occupies over 80,000 square feet and will support functions such as finance and accounting, IT, human resources, procurement and other business services.

Edwin Yapp is a freelance IT writer based in Malaysia.

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