Advanced Micro Devices may be more willing than in the past to embrace ARM chip designs to meet customer demand in the booming mobile computing space, the latest example of the company’s willingness to change under the leadership of new CEO Rory Read.
During a speech Dec. 13 at the IT Supply Chain conference and in conversations with analysts at the show, Read indicated that AMD has not ruled out adopting the ARM architecture for particular chips if it means being able to get customers what they want.
In what they called a “fireside chat” with Read at the show, Raymond James analysts Hans Mosesmann and Brian Petersen said in a note that Read showed a level of enthusiasm and passion for AMD that had not been seen from a CEO since founder Jerry Sanders ran the show more than a decade ago. The two analysts also noted that if their reading of Read’s plans is correct, some of the new CEO’s ideas run counter to what Sanders would have done.
That would include adopting a chip architecture that isn’t x86, but rather the low-power ARM platform used by such companies as Qualcomm, Texas Instruments, Samsung Electronics and Nvidia and currently dominant in the fast-growing smartphone and tablet spaces. Read apparently wasn’t definitive in whether the company will move in that direction, but he did say AMD is keeping the option open.
“Mr. Read (for the first time, we believe) suggested that an ARM-based system on chip (SoC) is not out of the question if that’s what customers prefer,” the analysts wrote in their note. “Heresy by AMD’s historical standards, but quite consistent with Mr. Read’s philosophy of winning in the market: execution, innovation, and convergence.”
This isn’t the first time the idea of AMD embracing the ARM architecture has been raised. Earlier this year, speculation arose when an ARM executive was listed as a keynote speaker at AMD’s inaugural Fusion Developer Summit in June. Some saw it as an indication that AMD could be interested in partnering with or buying ARM as a way to gain traction in the mobile device space.
However, John Taylor, director of client product and software marketing at AMD, said there was no deal in the works with ARM, although he didn’t rule out a relationship between the two companies in the future.
“ARM sees the world very similarly to how AMD does,” Taylor told eWEEK in May. “We’re constantly looking at where the market is headed and evaluating what our customer requirements are. … Clearly there’s common ground between AMD and ARM [in regard to] balanced computing and the GPU as the key platform pushing the [computing] experience forward, but not at the expense of battery life.”
Read apparently is being much more open about the idea than past AMD CEOs.
“At the end of the day, it has to be market driven and by the customer,” Read said, according to a MarketWatch report. “We have a lot of IP and a lot of capability. We’re going to continue to play those cards, but as you move forward, making sure that you’re able to be ambidextrous is definitely a winning hand.”
AMD, Intel Looking to Gain Mobile Foothold
Both Intel and AMD are looking for ways to gain a greater foothold in the mobile computing space, particularly in tablets and-in Intel’s case-smartphones. Intel is expecting smartphones and tablets powered by its Atom “Medfield” chip to hit the market in the first half of 2012, and also is pushing the concept of ultrabooks-very thin and light notebooks with tablet features-as a way to compete not only with tablets but also Apple’s MacBook Pro. Intel on Dec. 14 unveiled a reorganization that combined four divisions into a single business unit focusing on mobile and communications technologies.
AMD officials reportedly also have broached the idea of ultrabook-like systems running on their upcoming Brazos 2.0 platform, which would include an updated “Zacate” CPU and Radeon HD 7000 series graphics chip. According to reports, AMD also would take a different tack than Intel, which had outlined detailed specifications for the ultrabooks. AMD instead would leave such details up to the systems makers.
AMD also reportedly will address a number of subjects, including tablets, at its annual Analysts Meeting in February.
Read has had a busy few months since being selected as CEO after a prolonged search that began in January, when Dirk Meyer resigned amid reported clashes with the board of directors over the company’s direction. Read had to deal with supply problems at manufacturing partner Globalfoundries that forced AMD to lower its third-quarter forecast, and in November the company announced it was laying off 10 percent of its workers in hopes of saving $200 million this year.
However, Read and AMD were successful in correcting some of the manufacturing issues, according to Raymond James analysts Mosesmann and Peterson, and the restructuring in November included a focused push into particular areas: low-power computing, the cloud and emerging markets.
The analysts gave Read strong marks in his first few months and agreed with his assessment that AMD is in a solid competitive situation, with a distracted Intel above and a still-learning ARM and partners. Mosesmann and Peterson expect more organizational changes at AMD and for its current share of the server chip market to grow into double digits-from the current 5 percent-over the next five quarters, thanks to server design wins from OEMs based on its Opteron chips that are built on the “Bulldozer” architecture.
“Our early read on Mr. Read as AMD’s new CEO: we are impressed,” they wrote. “The coming quarters will be key for Mr. Read to garner credibility and he is off to quite a good start, in our view.”
Other analysts are taking a wait-and-see approach. UBS analyst Uche Orji said he is interested in what AMD will present at the meeting in February in terms of low-power chips for ultrabooks, tablets and servers.
“Key for AMD to regain mindshare is for it to move the debate away from the perception it will get squeezed in the Intel vs. ARM battle to one of offering unique value vs. Intel and competitive power efficiency and cost [plus] x86 compatibility vs. ARM,” Orji wrote in a Dec. 13 note.