AMD Is Shipping 32-nm 'Llano' Chips for Mainstream PCs

AMD has begun shipping its 32-nm "Llano" Fusion APU for mainstream notebooks and desktops, and systems with the new chips will start appearing this quarter.

Advanced Micro Device's "Llano" processor for mainstream notebooks and desktop PCs is now shipping and is expected to appear in systems sometime this quarter.

AMD interim CEO Thomas Seifert made the announcement during a conference call with analysts and journalists April 4 to discuss new conditions of its wafer supply agreement with semiconductor manufacturer Globalfoundries, which builds AMD's computer chips.

Seifert pointed to the revenue shipment of the 32-nanometer Llano APUs (accelerated processing units) as a proof point that the wafer yields coming from Globalfoundries are meeting AMD's demands. Llano, which reportedly will be called AMD's A-Series of APUs, is the latest offering in the chip maker's Fusion initiative.

With Fusion, AMD is putting its x86 CPU and discrete-level graphics technology onto the same piece of silicon. Executives have said that integrating the CPU and GPU on the same die will help drive up performance and energy efficiency of computer systems while cutting power costs, both at the consumer and commercial sectors. Llano will offer either two or four processing cores.

AMD released the first of its Fusion APUs at the 2011 Consumer Electronics Show in January, and currently offers C-Series "Ontario" and E-Series "Zacate" APUs for such smaller systems as ultra-thin notebooks and netbooks. AMD also has the Embedded G-Series Fusion chips for embedded systems.

AMD gets its CPUs from Globalfoundries, and its DirectX 11-capable GPUs from Taiwan Semiconductor Manufacturing Co. Globalfoundries was created in 2009 when AMD spun off its manufacturing business. The reconfigured agreement with Globalfoundries gives AMD some measure of guarantee on its supply of 32-nm processors, and gives Globalfoundries some financial incentives to meet AMD demands.

Essentially, at least for 2011, AMD will only pay for those 32-nm wafers that meet AMD's standards. The negotiations with Globalfoundries began last year, when the manufacturer was having difficulty making commercial-grade 32-nm wafers. However, those problems have been resolved, Seifert said.

"The progress on yield is good," he said. "It's on target for [AMD's] expectations."

Seifert said AMD will continue ramping up its partnership with Globalfoundries. Last year, AMD paid Globalfoundries $1.2 billion; this year, Seifert expects to pay between $1.1 billion and $1.5 billion. That will climb to between $1.5 billion and $1.9 billion, including as much as $400 million in incentives, he said.

Releasing its first 32-nm processor is an important step for AMD in its competition with larger rival Intel, which unveiled its first 32-nm chips in 2010. Intel currently holds more than 80 percent of the world's processor market, while AMD is in distant second with just under 19 percent.

Like AMD, Intel at the CES event also came out with the first of its 2nd-Generation Core "Sandy Bridge" processors that integrates the CPU and GPU on the same die. However according to FBR Capital Markets analyst Craig Berger, sales of the Sandy Bridge chips in a tough PC market to this point have been disappointing, due in part to a flaw in the design of a support chipset, dubbed "Cougar Point." The flaw caused a delay in the release of the latest Sandy Bridge chips, and should give AMD a bump in its first-quarter numbers, Berger said in a March 31 report.

However, that bump could be a temporary one, he said.

"So, if AMD does achieve the high end of revenue guidance, or potentially better, the upside is likely short term in nature and due to customers turning to AMD for product when Intel's Sandy Bridge was less available due to the chipset bug recall," Berger said in the note. "For 2Q, we think AMD's revenues will fall [quarter over quarter] given its 14th week in 1Q, Intel chipset goodness unwinding, and sluggish desktop builds, still rather unexciting."