AMD Gears Up for Future Intel Wars
Alexei Oreskovic
07/26/07 - 06:51 PM EDT
SUNNYVALE, Calif. -- After appearing to have fallen behind in the
microprocessor arms race,
Advanced Micro Devices(AMD Quote) finally offered a glimpse of its next generation of chips.
The company detailed a pair of new microprocessor
cores under development that will position the company
to address a broader swath of the electronics market
and, AMD hopes, will give it an edge against arch-rival
Intel(INTC Quote).
The two chips, code-named Bulldozer and Bobcat, are
still a couple of years away from commercial
availability. But they represent the most-concrete
evidence to date of how AMD intends to leverage its
$5.4 billion acquisition of graphics chipmaker ATI to
battle Intel going forward.
AMD also said its upcoming quad-core processor, dubbed
Barcelona, will put the company back on an even
playing field and help stabilize the falling prices
that have eroded profit margins of late.
"Despite the very competitive environment, we continue
to make progress," AMD Chief Sales and Marketing
Officer Henri Richard told a crowd of analysts and
journalists at the company's annual technology analyst day here.
"The fundamental components of us continuing to gain
share are in place," Henri said.
Market share gains may be the least of AMD's worries,
given its current state of affairs.
AMD has been battered by a combination of stale
products, a fierce price war and dwindling cash flow.
The company has lost more than $600 million in each of
the past two quarters and has more than $5 billion of
debt on its balance sheet.
Last week, CFO Bob Rivet told analysts that the
company expected to get back to break-even by year's
end.
On Thursday, however, the company backed off the
target slightly, dubbing it an "aspirational goal."
Rivet acknowledged Thursday that reaching break-even
by the end of the year was clearly aggressive. But
with the company due to spend less on manufacturing in the coming quarters, and holding operating expenses
flat, Rivet said AMD needed only a lift at the
top line.
"We'll sell a hell of a lot more" in the second half
of the year, Rivet said, citing forthcoming products
such as the Barcelona quad-core processor and the Phenom
desktop PC processor.
How the Barcelona chip fares when it is released in
September is an open question.
While AMD will initially ship Barcelona chips that
have lower clock speeds than Intel's current products,
AMD proffered test results Thursday that showed its
chip outperforming Intel's product in raw performance
and performance per watt.
Insight64 analyst Nathan Brookwood said the so-called
floating point test results are the most impressive
he's seen for any chip at any clock speed.
But he
noted that the test in question measured performance
for scientific applications, rather than the general
purpose tasks relevant to many corporations.
And Intel has a slew of new chips in the pipeline
featuring smaller circuitry that could change the
competitive landscape.
Meanwhile, Brookwood said the first glimpse of AMD's
two new microprocessor cores filled an important gap
in the company's so-called roadmap.
"They're not just going to take iterations of their
stuff and keep shrinking it," he said.
Bobcat and Bulldozer represent the first fundamentally
new microarchitecture since AMD introduced its Opteron
in 2003, and they will showcase the so-called Fusion
technology that integrates graphics and computing
capabilities on the same microprocessor core.
Bulldozer is designed for servers, desktops and
notebooks and will improve performance per watt by up
to two times, AMD said.
Bobcat will be targeted toward consumer electronic
devices that require extreme power efficiency. AMD
said the product is targeted for 2009 release; it will
initially be available for digital televisions and will
eventually spread to ultramobile PCs and other
handheld gadgets.
Intel unveiled details about a similar product, dubbed
Silverthorne, earlier this year.
"It's good to see things three or four years down the
road," said Jim McGregor, an analyst at industry
research firm InStat.
But AMD is coming off some tough quarters, McGregor
noted, and has nothing besides Barcelona and Phenom to
carry it through until Bobcat and Bulldozer.
"Intel got aggressive again," McGregor said. "Now AMD
needs to get aggressive again."
Shares of AMD slumped along with most tech stocks Thursday, closing down 5.5% to $14.73.
