NEW YORK (
, which competes with
in the notebook and graphics processor markets, is set to launch its Fusion processor, which combines the processing power of a central processing unit (CPU) and a graphics processing unit (GPU) in a single silicon die.
AMD claims high performance and low power consumption for its Fusion processor. Processors like Fusion allow PC users to run high definition videos or play graphics intensive video games on a single Fusion processor and reduce the need for a separate graphics card.
Fusion presents an opportunity for AMD to challenge the dominance of Intel in CPUs and Nvidia in graphics processors, especially in the market for portable device processors.
Intel Dominates Notebook Processor Market
Intel's Core series processors are used in around 80% of the notebook PCs sold globally, making this business the most valuable for Intel's stock. We estimate notebook processors constitute about 46% of the
. In comparison, AMD's Athlon powers only one-fifth notebooks sold globally and constitutes about 21% of the
Although Intel's processors are preferred by many PC makers over those of AMD, Intel loses ground when it comes to graphics processing. Notebook users who need to run graphic intensive programs either have to (1) buy Intel's integrated graphics processor, which reduces processing speed and consumes more battery, or (2) purchase an additional discrete graphic processors (from a company like Nvidia), which increases total cost.
You can modify our forecast for Intel's notebook processor market share above to see how the company's stock could be impacted if Intel were to lose processor market share to AMD's Fusion.
Nvidia's GeForce Dominates Graphics Cards Market
Nvidia dominates the discrete graphics processor market through its GeForce cards and has more than 65% share of total graphic cards shipped. With the launch of its Optimus technology last quarter, Nvidia is trying to increase its foothold among notebook users.
However, with AMD's latest Radeon graphic cards slowly catching up with Nvidia's processor performance and gaining attention among gaming enthusiasts, the competition is likely to get tougher. Furthermore, we expect AMD's Fusion processor to put even more pressure on Nvidia market share.
Fusion Can Help AMD Gain Share from Intel and Nvidia
While Intel leads in the notebook processor market and Nvidia in the graphics processor market, neither of them has significant presence in each others' category. Intel has not built a powerful discrete graphics card while Nvidia has never ventured into the main processor segment.
AMD's Fusion is expected to be launched in 2011 with two variants: (1) a 4-core for mainstream notebooks and desktops, (2) a dual-core version for netbooks and other smaller mobile Internet devices.
Processors that combine the capabilities of a CPU and discrete graphics processor like Fusion can help reduce overall PC prices for end consumers, making Fusion an extremely appealing processor for PC makers competing to win customers.
With software developers such as
already backing Fusion, the road will get tougher for Intel and Nvidia.
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