Watch for Advanced Micro Devices' Tablet Design Wins at Computex

When Advanced Micro Devices (NASDAQ: AMD  ) announced its next-generation Mullins product for tablets, it showed some impressive performance numbers from the part. Further, the chips are rated at quite an aggressive thermal design power, or TDP. While these TDP ratings generally don't tell the whole story -- and that includes from AMD or any of its competitors, including Intel (NASDAQ: INTC  ) -- they do give a pretty decent idea of what kinds of devices a part should be able to fit in. At the upcoming Computex show beginning June 3 in Taipei, Taiwan, be sure to watch closely for tablet design wins on AMD's part.

Finding tablet designs has been a problem for AMD
AMD has found it difficult to win designs in the tablet market, in no small part because of a very poor competitive positioning with its products. Its first tablet attempt, known as Hondo, was a performance and power disappointment. Its next attempt, Temash, was a significant improvement over Hondo but still couldn't quite cut it on a performance and power basis -- and probably from a platform bill of materials level. Mullins, AMD's third-generation tablet product, does look a lot more competitive.

However, despite the impressive performance that the initial previews have suggested, we still don't know a number of critical pieces of data, such as power consumption and battery life numbers and platform bill of materials costs required to support the platform. When the first designs hit the market, the hardcore tech sites will probably get us some power consumption numbers. If those look good, and if the delivered performance is as claimed, then the last major gating factor to design wins and commercial success is chip and platform cost.

Intel's contra-revenue scheme is a headwind, but not in the way you might think
The reason I'm so concerned with the platform bill of materials cost is that Intel had some difficulties here with its own Bay Trail-T platform and as a result needed to provide contra-revenue support to offset that cost to the OEMs. While Intel's Bay Trail-T, the one that required much support, was based on a PC platform but optimized for tablets, the Mullins chip appears to simply be a binned -- i.e., creme de la creme -- variant of its PC-focused Beema platform.

While AMD has indicated that it has done a number of things to lower the bill of materials costs for this platform relative to the prior generation, it is still likely that as a PC-focused platform it has a bill of materials cost more in line with Intel's Bay Trail-T than a platform from Qualcomm or MediaTek. If Intel is providing the appropriate bill of materials offset and AMD cannot, then even if AMD has any real-world performance or power advantages, they could be neutralized as a result of cost.

Foolish bottom line
Each generation, AMD promises a new world-beating tablet platform on some vector or another, but so far those paper victories have led to not much in the way of design win traction. However, keep a very close eye out at Computex for any design wins based on the Mullins product from AMD. If the company can deliver, then it'll be much easier to be more positive on the shares, particularly in a frothy market increasingly devoid of compelling bargains. 

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  • Report this Comment On May 26, 2014, at 8:50 PM, ta152h wrote:

    I think we'll see some gains in tablets with Mullins, but it's hard to see it as anything but a high-end Windows tablet processor. How big is this market? Is AMD really going to create/grow it? It seems like this is a reach. So, I expect some design wins, some sales, but nothing significant enough to radically increase earnings.

    I think of Beema as more of a laptop version of Mullins, than Mullins as a tablet version of a desktop chip. Puma is clearly not a desktop chip in any form, and is designed entirely from Jaguar to work better in mobile environments. In fact, there are no socketed desktop Beema chips; they are all based on Jaguar.

    But, ultimately, Bay Trail was designed for phones, and is moving up into tablets. Jaguar started for laptops/desktops, and with Puma moved down into tablets. It's almost always easier to move up in power than down. Yes, Bay Trail is a very poorly designed processor, but it's also using a finer lithography that forgives many sins.

    There are four major problems. For one, there's not a big tablet x86 market, with Windows not exactly being popular there. AMD can only sell into that. The second is, Intel's contra-funding, which makes Intel chips significantly less expensive to use. The third is Intel chips being designed for lower wattages than AMD, and thus limiting AMD to only the higher tablet wattages where it shows equal or better performance. Last, since AMD will be a high-end tablet processor, due to cost and power profile, they would need support from OEMs to sell tablets with supporting parts that also play into this market. So far, OEMs couple AMD parts with lower end screens, storage, etc... which would make these products inherently disjointed.

    It's just hard to see this being hugely successful right now. Mullins is a great part for a small segment (high-end) of a small segment (Windows tablets). Most of the market will be Android, and most of the Windows market will be lower-end Intel devices. Still, it will do better than Temash and Hondo, but it's not clear it take significant share in tablets.

  • Report this Comment On May 27, 2014, at 1:36 AM, ToxyFool wrote:

    Just call it what it is, Ashraf. Intel is BRIBING their partners to use their chips. A strategy that inspires confidence, right?

  • Report this Comment On May 27, 2014, at 10:22 AM, TEBuddy wrote:

    So what you are saying is that once again, Intel paying off OEMs is going to be trouble for AMD? Whats new?

    And Temash performance was better than Intels products, you should not say that is was disappointing performance. It was just disappointing performance per watt, or as you say on the power.

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Ashraf Eassa

Ashraf Eassa is a technology specialist with The Motley Fool. He writes mostly about technology stocks, but is especially interested in anything related to chips -- the semiconductor kind, that is. Follow him on Twitter:

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