AMD Touts Custom Chip Unit To Battle PC Decline

Under Read, AMD has worked to transform itself and broaden its technological assets. The company in February 2012 bought microserver vendor SeaMicro and its Freedom Fabric, and later in the year officials said it would build chips based on designs by ARM Holdings, whose designs dominate the smartphone and tablet markets.

Read has looked to pare expenses – in part by shedding jobs – as well as refocusing on the company on several core growth areas, including ultra-mobile devices (such as tablets and ultrathin notebooks), dense and energy-efficient servers, embedded devices and semi-custom chips. However, during an 18 April conference call with analysts and journalists to discuss first-quarter financial numbers, Read said that PCs will continue being important to the company.

“The PC market will remain an important business for AMD for years to come,” he said. “The PC is far from dead.”

The semi-custom chip business already is beginning to show results, King said.

“AMD is now the chip vendor of choice for Sony’s PS4, as well as the [Nintendo] Wii U win it announced last year,” he wrote. “Plus, rumours suggest the next-gen [Microsoft] Xbox will also sport AMD silicon, making a hat trick for the company over IBM whose custom Power-based chips supported past-gen systems. Some will argue that the game console market is in decline but I expect it’s still lively enough for AMD to ship millions or even tens of millions of units.”

In the long run, AMD had no choice but to make such bold moves, King said.

“It’d be embarrassing if AMD threw a party and nobody came, but I think the bigger risk is standing around doing nothing,” he said. “With the company’s traditional PC and server markets both under a variety of pressures, I believe Read’s instincts of searching out new vistas for AMD’s IP and other assets  is entirely sensible and a far better strategy than waiting for the PC sector to come roaring back.”

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Originally published on eWeek.