AMD's 2011 Will Be Nothing Like 2010

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At the start of 2010, Advanced Micro Devices (NYSE: AMD  ) was still in pretty dire straits.

The long-awaited Fusion architecture was still a distant dream, at least for system builders and consumers. The manufacturing arm spun off as Globalfoundries hung like a lead albatross around AMD's neck and balance sheet, despite a recent cash infusion from the legal department of Intel (Nasdaq: INTC  ) and further assistance from AMD's Arabian investors/friends.

The company was up to its neck in debt and alligators, with lots to prove and not many weapons at its disposal. Even the graphics segment was under attack from an NVIDIA (Nasdaq: NVDA  ) more burdened with manufacturing shortages than design misses.

Here we are, 52 weeks later. How much has AMD's picture changed?

For one, AMD has gained the high ground in the graphics wars, while Intel is coming on strong with graphics features in the minty-fresh Sandy Bridge processor line that should soon see competition from more well-endowed graphics performance on Fusion products.

In the main processor market, Intel is still unquestionably the king of raw performance, though AMD puts up its dukes for a spirited fight when you also consider bang-for-the-buck and power efficiency vectors. The David and Goliath battle has been a stalemate all year, according to the industry analysts at iSuppli, setting the stage for a very interesting 2011 in the processor industry.

Intel is branching out into mobile computing in a big way, while AMD is finally getting those Fusion chips onto store shelves and potentially reinventing what a personal computer or corporate server can do. AMD CEO Dirk Meyer has proven his mettle in a way that predecessor Hector Ruiz never could, so Intel now has a worthy adversary on its hands.

In October, I explained why AMD is worth about $10 per share, a price it rarely approached in 2010. I put my money where my mouth is this week and bought a few shares with my own money. While $10 is still the absolute minimum price at which I would sell, I'm hoping and half-expecting Fusion to be a game-changer beyond analyst estimates and my own conservative projections, in which case I'd hang onto those shares all 2011 long -- and beyond.

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Fool contributor Anders Bylund owns shares in AMD but holds no other position in any of the companies discussed here. Intel is a Motley Fool Inside Value recommendation. NVIDIA is a Motley Fool Stock Advisor selection. The Fool owns shares of and has bought calls on Intel. Motley Fool Options has recommended buying calls on Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.

Read/Post Comments (5) | Recommend This Article (4)

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  • Report this Comment On December 30, 2010, at 2:10 PM, rav55 wrote:

    Back in September "AMD Vice President Leslie Sobon said that the company has no immediate plans for supporting a tablet PC, answering recent questions regarding its stance on the emerging iPad-charged market. Specifically, Sobon was asked if the Ontario platform could be used in the netbook and tablet sector, running a Microsoft-based OS." This was from and others also reported it.

    This morning we are treated to a Digitimes report:

    "AMD is set to announce its Brazos platform, a combination of the company's Ontario APU and Hudson chipset, at Consumer Electronics Show (CES) 2011. The company has already prepared its next-generation platform codenamed Deccan, which consists of its Krishna APU and Yuba chipset, according to sources from PC players.

    AMD will start internal testing of Deccan in the first quarter of 2011 and will send samples to clients for testing by the end of the second quarter, with mass shipments expected to start as early as the end of 2011, the sources noted."

    Digitimes also reported last week that AMD Market share is due to increase by about 25% or more in the desktop and laptop markets.

    I also think that AMD has created a game changer with Fusion. And the strategy of going after the tablet and netbook market first caught Intel napping. Intel now has to react with a refresh of Atom which just can't compete and give AMD a chance to further develop Bulldozer and the desktop and server market. What AMD has that Intel does not have is a library of graphics design AND the experience and expertise to combine high performance graphics with a cpu. In fact the middle price point for discrete graphics I think will be eliminated completely except for legacy pc's.

    Yes 2011 could be a great year for AMD.

  • Report this Comment On December 30, 2010, at 3:35 PM, austec wrote:

    The Big Question Is:




  • Report this Comment On December 30, 2010, at 7:15 PM, BuyemHoldem wrote:

    I was hoping Fusion would have been ready for Christmas past. Sandybridge is laughable but Intel will probably con (or bribe) the masses again. Intel is a manufacturing & marketing machine... not known to be on the cutting edge of engineering. Here's to AMD kicking Intel's butt.

  • Report this Comment On January 01, 2011, at 9:31 AM, jkubinak1339 wrote:


    probably not entirely -- but right now AMD's plan makes the most sense - they made Fusion step away from being a CPU to being an APU. powerful graphics on the same chip as the CPU- if Fusion helps OEM's make a superior product at any price point they will obviously use it. in the past you really had AMD CPU vs INTC CPU which was basically the same product- no reason not to take the intel bribe. If HP adopts Fusion for some of its Laptops/netbooks ect - does apple compete against them with an Atom chip from intc? apple might have to add a graphics card to even out performance.i doubt steve jobs will put out apple products with inferior graphics.

  • Report this Comment On January 02, 2011, at 2:48 PM, austec wrote:



    Will the EVIL MONOPOLY get its way!?

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