AMD thinks beyond PCs with new custom chip division - coaxumdevens
Spiny with a contract to build chips for Sony's PlayStation 4 gaming console, Advanced Micro Devices has nowadays officially established a custom-chip business whole in an effort to break away from its heavy reliance on the slumping PC market.
AMD is staking its future on the custom-chip business, which will purpose the company's intellectual property to work specialized ironware for computation devices like tablets, consumer electronics look-alike gaming consoles and superior computers. An representative is the PS4 chipset, which uses AMD's CPU and nontextual matter processor technology.
The custom-chip unit will build the "best products" with a consecrated team of veteran chip architects and a rich intellectual-dimension portfolio tied to mobility, artwork, performance CPUs and connectivity, said Saeid Moshkelani, firm vice president and general manager at AMD.
"When you combine entirely of these together information technology becomes a compelling chronicle," Moshkelani said.
Immediate payment-strapped AMD hopes the custom-chip business testament take the company back to net profit. AMD's major source of income has been the sale of chips for PCs, which is in rapid decline. About 85 percent of the company's business is "focused along the bequest PC portions of the market, projected to have slowing ontogeny over the succeeding several years," the ship's company said in a filing with the U.S. Securities and Exchange Commission earliest this week.
PCs are beingness replaced by tablets, a market in which AMD has virtually none presence. AMD plans to continue releasing new tablet and PC chips, but will update its server chips only in 2022, which could limit its opportunities in the invasive server market. The company has also been unable to maintain on cut off development with Intel, which is taking away PC and server market percentage.
The concentrate on custom chips comes under a new direction team led by former Lenovo executive Rory Show, who was named CEO in August 2011. Last year AMD tore up its old product roadmap, and established a new chip design methodology to reserve the integration of tertiary-company scholarly belongings so chips can be customized to customer needs.
AMD's processors today largely trust on x86 architecture, which is victimized in most PCs. To diversify, AMD has licenced processor architecture from ARM, whose designs are used in most smartphones and transferable devices. AMD too bought microserver ship's company SeaMicro, from which it got an interconnect technology called Freedom Fabric, which the company is vulnerable to using in customized-break off designs.
AMD Read in January laid out a planto return the company to profitability, expression that the custom-chip business concern could deliver as so much as 20 percent of the caller's revenue by the quarter quarter, and much than half the revenue in the coming years. AMD's fourth quarter of business 2022 closes in December, and the tradition-micro chip business is already well on its way of life to achieving the goal of 20 percent of the company's tax income by and then, Moshkelani said.
AMD also has laid off employees and sold its Austin, Texas, campus.
AMD will non shy away from challenging chip designs, Moshkelani said, adding that if a customer wanted x86 and Fortify architecture on one chip, AMD will pass happen.
"Information technology's non something we do afterward 5 o'clock. It's a rattling adjusted… business unit," Moshkelani aforementioned.
The customized-chip business is not glamorous, but it has stability with a long pay-off involved, aforesaid Dean McCarron, principal analyst at Mercury Research.
"Any one design win for a million units or Sir Thomas More becomes a meaningful business enterprise for them," McCarron said. "They key to all of this is getting the right design win."
An example is the PS4 check business, which could render millions of unit shipments for AMD, and get many profitable with time, McCarron said.
Like the PS3, the PS4 may have the same scrap for galore years and the initial net margins may be low. But as manufacturing technology improves, the chip-qualification cost will drop and generate more profits for AMD.
"Games consoles are a good one. Tablets are going to be big," McCarron said.
Among the many failures in the custom-chip business, Motorola is a good example of success with a 20-year run, McCarron said. Motorola supplied custom chips for the prime optical maser printers, and had a contract with Apple for PCs and strange products that contributed to its winner.
"IT's an example of getting in with the letter-perfect products and customers," McCarron said.
With the Personal computer market slumping, AMD had to make a modify, and the custom-chip business is a good choice, McCarron aforesaid. The company doesn't have financial flexibility like Intel, and it had to choose where to allocate its limited resources.
But IT won't be a walk in the green, arsenic AMD hush has to contend with competitors like Intel, Nvidia and others vying for chip contracts, McCarron said.
Source: https://www.pcworld.com/article/451630/amd-thinks-beyond-pcs-with-new-custom-chip-business-unit.html
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