AMD's third-party IP plans won't disrupt x86 market

Chipmaker's move to include architectures other than x86, such as ARM, into future processors unlikely to impact x86 server market share but could boost its competitiveness against Intel, say market observers.
Written by Liau Yun Qing, Contributor

AMD's move to include other architectures besides x86 in future chipsets based on customer requirements will not affect x86's hold on the server processor market but would allow it to better compete with Intel, said market watchers.

The chipmaker announced in early-February that it will be embracing an "ambidextrous" strategy that allows it to include other technologies and intellectual property (IP) into its chips, alongside its usual x86 and graphics technologies.

AMD spokesperson Phil Hughes further explained to ZDNet Asia that being "ambidextrous" means the designs of the instruction set architecture (ISA) of a chipset can be defined by the market. "So we are putting flexibility in the system-on-the-chip (SoC) to be flexible at the ISA level. As the market defines an ISA, or a type of IP block, we can react and provide the solution," he said.

Market observers, however, said AMD's latest move would not affect x86's hold on the market.

Simon Stanley, founder and principal consultant at Earlswood Marketing, a U.K.-based market analyst firm, believed that in the short term, AMD would be using chip architectures such as ARM and other third-party IP alongside x86 cores in server processors to address both low-power and high-integration segments. These two areas are key differentiators for companies looking to compete with Intel in the server market, he said.

But with x86 included in the portfolio mix, the company's decision to open up its chip designs to other architectures would not make a significant impact to the x86 architecture market share in the near future, he added.

"In the longer term, AMD might start selling ARM-based chips for servers but the demand for that would need to come from customers first," he said.

Enterprise customers are typically "extremely conservative" and would need a long time before they accept new hardware, such as ARM-based servers, into their existing IT environments, according to analysts ZDNet Asia spoke with previously.

Ron Leckie, president of Infrastructure Advisors, an independent semiconductor research firm, added that Intel already dominates the x86 space with its design and manufacturing prowess, and it would be "very difficult" to make a dent in its market share.

However, ARM has "really excelled" in the mobile space, and opening up its chipsets to include ARM architectures could potentially help AMD in this arena, he stated.

AMD's success will ultimately depend on the systems companies and their willingness to shift to a non-x86 architecture, Leckie surmised. "Although the semiconductor industry is very dynamic, it is also very risk-averse," he said.

One IT vendor that has showed support for ARM-based servers is Hewlett-Packard (HP), which in October 2011 announced that it will snub Intel and include ARM servers in its line of products. One of the reasons for its decision is because the low-energy chips will help reduce the energy consumption of its servers by 89 percent, the company stated then.

Asked about AMD's decision to include third-party architectures into its chipsets, Stephen Bovis, vice president and general manager for industry standard services at HP Asia-Pacific and Japan, said the company cannot comment on rumors about what its partners are doing nor speculate on possible market impact.

Instead, he shared that ARM servers will complement and extend HP's beyond its traditional x86 reach into other selected market segments. Such architecture is suitable for servers delivering Web services, social media and simple content delivery applications, for example, as it brings improved simplicity while achieving energy and cost savings, the executive said.

"As an emerging and enabling technology, we believe that it will start small, targeting a select market segment and grow exponentially to become an important and significant part of the server market," Bovis said.

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