There’s a lot riding on Advanced Micro Device’s new mobile platform.
In a Feb. 13 research note, Doug Freedman, an analyst with American Technology Research, wrote that OEMs have reservations about AMD’s new “Puma” platform for laptops, which is scheduled for release in the second quarter of this year.
Freedman wrote that any delay with or problems with the platform-which includes a new mobile processor called Turion Ultra, a new graphics card and chip set-could cause a management shakeup and even the sale of the company.
AMD has been under close scrutiny since technical problems surfaced with its quad-core Opteron processor for servers late in 2007, but executives have promised to fix the problems and bring the Sunnyvale, Calif., company back to financial stability.
In his research note, Freedman suggests that Nvidia, which is best known for its graphics processors, might entertain a buyout of AMD. In January, rumors surfaced that IBM might have an interest in acquiring AMD-an idea that was firmly dismissed by both companies.
A move by Nvidia could also eliminate a potential rival in the graphics market.
In 2006, AMD acquired ATI, and the company has been moving forward with plans to incorporate both CPU and GPU (graphics processing unit) on the same piece of silicon. AMD originally called this plan “Fusion” and now the initiative is dubbed Accelerated Processing Units.
“We do not believe [Nvidia CEO Jen-Hsun Huang] would even consider leaving Nvidia to go to AMD (he told us so),” Freedman wrote in the research note.
“However, we do not believe he would walk away from the challenge of buying AMD on the cheap and turning the company around. In addition, we note that the Intel/AMD road map of integration of the CPU/GPU could pose a risk to Nvidia, and buying AMD propels Nvidia into a formidable competitor for Intel with the upside coming from Huang’s ability to re-architect AMD’s design.”
Roger Kay, an analyst with Endpoint Technologies Associates, noted in an e-mail that AMD’s low stock price makes it an attractive takeover target, and agreed that Nvidia could be interested since the acquisition would help it in the graphics market.
Kay added that several other semiconductor companies, such as Texas Instruments, Samsung STMicroelectronics, Hynix and Toshiba might also have an interest if AMD ends up on the block.
An AMD spokesperson told eWEEK that the new Puma platform remains on schedule and that the company continues to work with all its OEM partners.
(Freedman also implied that there were technical problems with Puma, but AMD firmly stated that there are none, and that the platform will hit the market on schedule. On Feb. 14, Freedman issued a second research note that stated there were no technical problems with Puma as he previously reported.)
In a brief telephone conversation, Freedman said that AMD’s OEM partners were still cautious about the new platform after the delays with both the quad-core Opteron processors and the company’s Phenom chip for high-end and gaming desktops.
Even with some of its problems, the mobile market was an area where AMD grew in 2007, according to IDC.
For the year, AMD increased its mobile processor shipments and claimed 17.4 percent of the x86 market, compared to 15.6 percent in 2006. AMD was helped by its low-cost chips for consumer notebooks and by adding Toshiba to its partner list.