AMD Offers Investors More Hope

Advanced Micro Devices (NYSE: AMD  ) offered investors reasons to be hopeful at its latest APU13 developers conference. There was a flurry of announcements and plenty of buzz, but when everything is distilled, the question on investors' minds is simply whether the company can successfully grow its top and bottom lines in a sustainable, healthy way. While AMD has many challenges ahead (both secular and structural), the company made a number of announcements at APU13 worth examining more closely.

Say hello to Mullins and Beema
Earlier this year, AMD launched system-on-chip parts targeted toward low-cost notebooks, convertibles, and -- to some degree -- fanless tablets. The one aimed at the notebook portion of the spectrum was called Kabini, and those targeted more toward convertibles and fanless systems went by Temash. AMD investors and management alike were hopeful that these would finally enable AMD to take share against Intel (NASDAQ: INTC  ) in notebooks, while at the same time penetrating the high-growth tablet market.

However, while Kabini was solid for low-end, low-cost notebooks, Temash utterly failed to impress. It was too power-hungry and lacked the necessary deep, low-power states to successfully power fanless, thin tablets in the same way that Bay Trail from Intel and numerous chips from ARM (NASDAQ: ARMH  )  have been able to do for quite some time now. While Temash saw some design wins in low-end notebooks, and even some bulky 13" detachable notebooks, it was out of its league in the low-power space.

AMD claims, however, that it has been hard at work revising its Jaguar processor core and reworking critical elements around its system-on-chip solutions. The fruits of this labor yielded the successors to Kabini and Temash, known as Beema and Mullins, respectively. AMD claims that performance per watt has doubled over its previous parts, although it isn't using actual power measurements for the "performance per watt" comparison, but instead the rated thermal design power numbers. If this is true, AMD will have a better shot at finally playing in the low-power tablet space.

Is AMD's biggest advantage moot?
AMD's biggest advantage in this space is that it's the only player (other than Intel) that is legally able to produce an X86-compatible design which, in light of the recent OEM abandonment of Windows RT, seems to be the only instruction set architecture that can successfully play in the Windows space. Additionally, AMD has significant graphics/gaming expertise that could help target OEM designs that are more focused on gaming.

That being said, it's difficult to ignore that Intel has been improving its graphics engines at an incredible rate and that it will -- when Beema/Mullins launch -- be shipping low-power Atom parts built on the company's 14-nanometer FinFET process. Given that AMD will be on TSMC's 28nm high-K metal gate process, it will be very difficult (speaking strictly based on the laws of physics) for AMD to have a competitive design on a performance-per-watt basis.

Even if AMD had designs that were more clever than Intel's, these designs would be fundamentally limited by the performance and power characteristics of the transistors from which the design is built. In other words, all of the problems that keep AMD from meaningfully competing against Intel in the high-end PC space are also present in the low-power/low-cost space.

There's still hope
In scenarios where power consumption is absolutely critical, AMD will have a tough time winning designs against Intel. However, in the low-end notebook space, as long as AMD can provide a "good enough" part at a price that significantly undercuts Intel (since AMD is willing to live with lower gross margins), it can probably do OK. In fact, even with Kabini, AMD was able to score the Samsung Ativ Book 9 Plus.

However, the real story for AMD is its semi-custom business. All of the experience it is building with these chips, and all of the IP that it is building in these products, can be reused for a number of interesting purposes. For instance, the Jaguar cores that didn't do well in tablets found a wonderful home in both the Xbox One and the PlayStation 4. Future AMD IP can be recycled in a similar fashion to meet different end market requirements.

Foolish bottom line
AMD is a risky bet and the company faces a number of competitive headwinds, but as long as the company continues on its semi-custom path, the IP it develops for the PC space won't be for naught, even if share gains prove elusive.

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  • Report this Comment On November 17, 2013, at 4:33 PM, KenLuskin wrote:

    Ashraf as usual MISSES the crux of what AMD is doing, so he can promote Intel....

    Only a single line is devoted to AMDs' focus on SEMI -CUSTOM and EMBEDDED.

    NOTHING is mentioned about the APU 13 conference, where innovations from HSA explained.

    People who are actually interested in the category that AMD calls APU, which is also known as Integrated Graphics should read this well written story written story in Tom's Hardware by William Van Winkle, entitled:

    AMD Fusion: How It Started, Where It’s Going, And What It Means

    http://www.tomshardware.com/reviews/fusion-hsa-opencl-histor...

    The key comments are:

    >>>""Today," says AMD’s Hegde, "the CPUs in our APUs may be lower in performance in your tests against Intel. But that’s not an indication of where we are going. We’re now embracing the low-power space in a very strong way, so we are building CPUs that are going to have very good performance with a very low power envelope. So when we say ‘balanced platform,’ we’re not saying that you have to take one or the other. We’re saying that, in a balanced platform, for every workload, do it in the place that makes the most sense. Intel’s approach of doing everything on the CPU is just wrong, because when you put a balanced workload on just the CPU, your power draw is dramatic and unnecessary. That’s why we don’t think that’s a good model. We’re going to make the cost of transition from CPU to GPU next to nothing. Then it’s up to each application to choose the right execution engine in terms of performance and power."<<<

    >>>"Similarly, AMD feels that HSA may be its path to success in smartphones and tablets, because when applications are properly optimized for balance, the GPU becomes much more influential in determining battery life. HSA targets two things: ease of programming and performance per watt. Once GPGPU compute comes into play, analysis shows that the GPU is 4x to 6x more performance per watt efficient than a CPU. ARM may have the biggest piece of that heterogeneous smartphone opportunity, but AMD is betting there’s still plenty of room for a strong number-two player who just happens to be using the same programming architecture as ARM."<<<

    Intel simply canNot compete in GPGPU because their GPU IP and designs are far, far behind AMD and Nvidia.

    There is a HUGE shift in IT that is just now starting.

    1) The cloud

    2) HSA that releases the power of the GPU

    The combination will result in large market share increases to AMD in server chip sales.

    The Apple acquisition of Prime Sense, the creators of some of the original tech behind of Microsoft's Kinect sensor, before MSFT took the project in house for the Xbox One, signals that importance of grahics to Apple.

    GPU processing will become increasingly important....

    That is WHY AMD will have an advantage over Intel, despite Intel's process node advantage.

    IF process node dictated success, Intel would not be struggling with less than a 5% market share in mobile.

    IF process node dictated success, Intel would not be playing 3 fiddle to AMD and Nvidia.

    IF process node dictated success, MSFT and SONY would have chosen an Intel chip for their new TV consoles.

    >>>"an industry that wants to keep accelerating compute capabilities must turn increasingly to optimizing efficiency. Ultimately, this is what GPGPU and HSA enable. By old methods, how much would a CPU need to evolve in order to facilitate a 5x performance gain? Now, such gains are possible simply through hardware and software vendors adopting an end-to-end platform such as HSA"<<<

    Too bad that the author completely misses the point...

    Could that be because Intel does not want people to know?

  • Report this Comment On November 18, 2013, at 7:21 PM, mycardbrokedown wrote:

    Ooook...

    We get it, you... big fan of intel... we got that long time ago... do you write fan-mail to intel too? Geez...

    + Where the hell did you learn that AMD is the ONLY other x86 license holder??? I will not tell you who's the other one will rely on google to do that for you...

    BUT... because this article is actually somewhat researched -well... a bit- and less fanboyish think it deserves some answer...

    You skip the part where AMD is actually taping out 14nm(cpu) and 20nm(gpu) this and next quarter. Intel will have 14nm to market no sooner then 2015(as to their own roadmap and Intel is known to follow roadmaps almost religiously...) most probably due to process problems. Intel is a big-boy steam engine pushing against the 14nm wall... Problem is it's a ~60BN$ steam engine... On the other side of the proverbial wall there is a total of ~0.7TN$ army of much more modern engines pushing at the same wall, even if the big-boy got to push first, ultimately the one with more force(read $ & talent) will break it down.

    Intel has made great progress in gpu tech? Well 1.5Bn$ in NVIDIA patents should have secured MUCH more then that but I strongly suspect NVIDIA played Intel on this one and did not give away all the insight, otherwise intel would have caught up long time ago... so money spent... 4 years with patents that obviously work(+ 3 something years larrabee) and still no racing horse? Well that's ought to say something about intels design & engineering ability... if nothing else...

    On the power efficiency... We have seen 22nm designs that brought modest 5% performance improvement over 32nm... while being hotter and harder to manufacture (as per the initial 22nm release from intel). Intel got lucky that time around as there wasn't any competition around to profit from it... At 14nm it seams they have just run out of luck. The shrink is pushed further and further away(they are now admitting to at least 1.5 years delay on the node) no 14nm mainstream, just mobile&ultra mobile shows that it's not viable for big cores this is also suggested by gf's 14nm only for ultra mobility (read very small cores & TDPs - aka bad process atm.). Not AMD nor Intel will have big cores on 14nm in the foreseeable future possibly only in 2016.

    2014 looks like this: Both intel & TSMC & GF try to make 14nm work... meanwhile AMD vs Intel goes on 28nm(fully mantures node) vs 22nm(somewhat matured node)... I'd say the 28nm process may still have some aces up it's sleeve + difference 28 - 22 nm is not that big a deal considering AMDs reliance on much denser libraries then intels we could easily see same diespace & TDP with same transistor count on both sides of the fence... This being possible only because 28nm is more mature.

    While 2013 has seen AMD a full node behind Intel 2014 will be just half a node and by 2015 it could just be on par...(if roadmaps & industry signs are to put any trust into...)

    What you fail to realize is that Samsung is now a fab too and it has the cash to burn. Aaand if it really wanted -and would be allowed to- it could just buy gf &| tsmc at a discount... There are however 2 other interesting/ed players on the field IBM & Apple both are VERY interested in the 14nm node and they don't want intel to do it because Intel does chips only for itself... which is beyond my comprehension to be perfectly honest...

    I think Intel could deflate the entire situation if they would just offer their process to anybody with the cash to buy it, it's just stupid ego play there. Intel is an excellent manufacturer and has excellent process & packaging, why waste it on bad & primitive designs if they could make a nice business for themselves if they would just offer it to everybody?? What's to gain of this strategy? They could easily swamp the entire mobile market with their superior process, making chips for Qualcom or Samsung or Apple or even AMD... why not? Why can't Intel be a company of trust? Why can't they just admit to their wrong doings and try to better themselves?? Is is really that hard a pill to swallow?(business is business after all what the hell...) What happens if the other team wins? Intel shares would go through the floor and they would basically go through what AMD was forced to go through... and WHY?? They have a clean nice way out of it which would secure them both spot at the CPU table(not to mention a LOT of business), they could focus on what they're best at and learn a thing or two from the market and maybe innovate again in the design area along the way AND a clean new face & name. But this door is closing fast and by 2015-16 it might already be too little too late... What the hell is wrong with this company? Intel could have easily produced ALL the ARM chips quietly without fuss, I think that's a hell of a lot of chips there (in the billions) business they lost because of stubbornness, not incapacity nor incompetence but because of pure and simple EGO. Or is it?

  • Report this Comment On November 20, 2013, at 11:39 AM, rav55 wrote:

    @ mycardbrokedown

    Ashraf as usual is shooting from the hip without doing any fact checking or basic research. For a tech writer he is remarkable uninformed. He should first as you say do basic research via Google!

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