Now that it has absorbed ATI Technologies, AMD today laid out a strategy and plan for the next two years that involve integrated graphics processing technologies at every level.
AMD told financial analysts it expects to save $150 million in 2007 thanks to synergies with ATI, double its initial estimates of $75 million in savings. In 2008, that savings rises to $200 million, according to a presentation by CFO Bob Rivet.
Couple that with an estimated $80 to $160 million in revenue in 2007 due to product synergy and $200 to $400 million in 2008. Combine that with an AMD projection to grow its CPU business at twice the rate of the industry in 2007 – 20 percent growth for AMD as opposed to 10 percent for the industry – and it’s clear why the company had a good day on Wall Street.
AMD announced plans to purchase ATI for $5.4 billion in July. The deal was completed in October, and AMD wasted no time in discussing its plans for integrated CPU-GPU processors, mobile computing, gaming and other markets.
One of those plans is Fusion, a combination of video processing in a CPU. This is hardly new, as Intel has been doing it for years with its integrated graphics chips, but the integrated graphics from Intel are hardly competitive performance-wise with discrete graphics processors from ATI and its chief rival Nvidia .
The idea is to start to use more of the capabilities of the GPUs, which have become extremely powerful in recent years, for more than just graphics processing.
“Part of the reason for the merger was GPUs are becoming more general purpose, and to do that they have to take on the characteristics of a CPU, which means general purpose computation,” said Henri Richard, executive VP and chief sales and marketing officer of AMD on the teleconference.
The ATI acquisition was a well thought-out strategy, according to Kathleen Maher, executive VP with the research firm The Jon Peddie Group.
“This is a natural evolution of semiconductors, that as capabilities become more commonly used, they are absorbed by the more powerful CPU,” she told internetnews.com. There had been a similar effort a decade ago by Intel to offer more powerful graphics, but it failed because the market and technology was not ready, she added.
AMD expects to begin shipping Fusion chips in 2009 aimed at the mobile computing market. The company is shooting for a balance in performance that’s better than current integrated offerings but still offers the best power-performance per dollar.
It would not be feasible or even possible to take the high-end GPUs used in video cards now and put them on the same die as a CPU, noted Phil Hester, VP and chief technology officer for AMD, nor does AMD want to.
“Our goal is not to replace the GPU,” he said. “We took a look at the integrated segment and think we can provide better performance at lower power and grow the market. You need to provide a good level of Vista basic performance, and that’s something you can do in an affordable die size and budget.”
The key to that will be the 45nm manufacturing process, which AMD expects to move to in 2008. Hester said one of the reasons for the move to 45nm manufacturing was in part to use the new graphics processors from ATI in its CPUs.
Maher thinks ATI’s work with Nintendo and Microsoft on their Wii and XBox 360 consoles will pay dividends in all Fusion-related work. “AMD has people who are really good at integration and getting a lot of graphic power within constrained resources. So that will serve them really well as they move forward into this Fusion phase,” she said.
