AMD Looks to Gain Additional Market Share in 07

Company officials tell analysts that they plan to integrate more products now that the purchase of ATI is complete and plan to roll out quad-core technology in the coming year.

NEW YORK—Advanced Micro Devices, the worlds second largest maker of microprocessors, plans on taking an even larger piece of the PC processor market in 2007.

At a meeting with Wall Street analysts here on Dec. 14, AMD executives said the companys core PC processor business would grow at twice the rate predicted for the industry in 2007.

The Sunnyvale, Calif., company also plans to match industry growth standards in its GPU (graphics processor unit) business as well as its digital television and handset units.

Overall, Chief Financial Officer Robert Rivet called for a gross profit margin of about 50 percent in 2007.

In his remarks to analysts, Hector Ruiz, AMD CEO and board chairman, said the company will focus on providing more technology in its processors that address issues of power and energy efficiency, as well as delivering a better visual experience through its $5.4 billion purchase of ATI.

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Specifically, Ruiz told analysts that AMD is poised to take advantage of the graphics that come with Microsofts new Windows Vista operating system.

The company also plans to make greater inroads in the consumer market thanks to the integration of the technology ATI has brought to the table with handheld devices and digital television.

"We are also defining who we want to be," Ruiz told the audience during his portion of the four-hour presentation. "And I hope that you got sense from the presentations of those things that [we] are a company with an awful lot of big challenges, but also a company with a tremendous set of opportunities."

Part of that growth and the new convergence between the commercial and consumer platforms will be helped along when AMD rolls out its "fusion" technology—a new class of x86 processors that will integrate the CPU and graphics processing unit at the silicon level and offer a new design.

The fusion design is not due to roll out until sometime between 2009 and 2010 and will be first offered in notebooks, and later on in desktops.

AMD is still on track to deliver its quad-core processor, codenamed "Barcelona," by mid-2007. In the past month, the company has offered a look at its quad-core processor as a way to counter the buzz that surrounded the release of Intels quad-core offering.

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In a presentation, Marty Seyer, senior vice president of AMDs Commercial Segment, said the company is fully prepared to meet Intels quad-core "Woodcrest" Xeon processor and promised that AMDs quad-core chips would offer 42 percent better performance per watt.

In addition, Seyer said AMD is ready to do more in the data center in 2007. In addition to growing the companys virtualization abilities, AMD is looking to expand deeper into the one-socket server space now that Opteron has solid traction in the two- and four-socket server market.

Seyer added that AMD has been able to leverage its offerings for servers and add to its commercial PC offerings. Although not offering specifics, he indicated that the company was ready to move forward in the new year with more offerings in this space.

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