by Anton Shilov
10/13/2011 | 09:36 PM
The inability of Advanced Micro Devices to address the rapidly growing market of smartphones and media tablets due to the lack of ARM-based solutions in its portfolio amid inability to design a leading-edge high-end x86 central processing unit may lead to sinking into irrelevancy, according to a semiconductor market analyst. Without competitive chips the company will be unable to meet its financial goals going forward.
"We maintain our view that AMD is being structurally squeezed by poor competitive positioning and longstanding operational struggles. AMD is on the verge of sinking into irrelevancy as ARM-based competitors gain share in low-end computing and Intel extends its advantages in performance and manufacturing,” wrote Daniel Berenbaum, an analyst with MKM Partners, reports Forbes.
AMD is concentrating around the so-called x86 everywhere strategy that dictates the company to tailor x86 architecture for all types of devices, from handsets to high-end servers. Even though the absolute majority of ultra-portable devices are powered by chips with ARM architecture due to its dramatically lower power requirements, AMD asserts that ARM is incapable of reaching performance levels of x86. At the same time, the company is risking to miss the smartphone/media tablet bandwagon as it is only beginning to design x86 chips for the latter and even has no plans for the former.
The company's latest high-performance x86 processor micro-architecture code-named Bulldozer failed to outperform Intel Corp.'s latest Core i-series "Sandy Bridge" chips in client applications, which naturally rises concerns about AMD's ability to score lucrative design wins with its latest FX-series central processing units. Moreover, if AMD's chips fail to outperform Intel's products in server applications as well, the company may not be able to regain the high-margin server market share.
One of the company's pearls is its ATI graphics processor design unit that manages to introduce competitive solutions. In fact, AMD is one of the two remaining developers of discrete graphics chips for personal computers with about 50% market share. The company can integrate its latest graphics technologies into Fusion accelerated processing units with its latest x86 Bulldozer cores to provide a decent mainstream offering. Unfortunately, AMD has been plagued by product delays for many years now and while analyst are confident in AMD's technologies, they do not believe in consistent execution.
"It’s difficult to remember the last product AMD launched on time, and it is now evident that, even aside from manufacturing challenges with partner GlobalFoundries, AMD’s technology roadmap is severely lagging. Third-party reviews indicate that the performance of new products based on the Bulldozer architecture is disappointing – this means that AMD will likely remain a bystander in the ongoing data center build cycle (which has accrued significant benefit to Intel), and will now also miss a window to compete in consumer PCs," added Mr. Berenbaum.