AMD said what they had to in their Q3 2012 analyst call, and then did something quite unexpected. Both were radical but welcome changes, and in our opinion may have saved their credibility.
The big bangs in the call were already well known, CEO Rory Reed confirmed the headcount reduction was exactly where we said it would be, the tie up with ARM confirmed our exclusive analysis, and so was the adding of third party IP. All in all, the company confirmed what they have been dancing about and not saying for a long time.
That is the most stunning change, the simple fact that AMD actually said something meaningful. Wall Street has written the company off over the last 18 months or so, and it goes deeper than the woeful state of the stock. Over the course of 2012, the hopes that AMD actually had a strategy were dashed and talk had gone from, “Maybe they’ll say it at this meeting” to, “Oh god, an hour of chirpy analogies without anything substantial behind them.” No one that SemiAccurate talks to had hopes of any real news.
The problem is that while the analysts got real news, it was still pretty vague. To make matters worse, it was a year or more late, and the atmosphere was a little more muted. Rather than Apollo riding a chariot, it was a more of a Monty Python scene. That said, even these little tidbits through gritted teeth may have saved the company from itself. At the very least, it stemmed the bleeding a tad, and that is a major victory.
On the technical side, AMD is going to put other cores in to their CPUs, most notably ARM cores. Executives mentioned ARM A5 cores as coprocessors as an example, but it goes far far deeper than that. Expect the next generation 64-bit ARM cores (V8 architecture) to be plug and play replacements for x86 cores in future AMD chips. This will allow AMD to push SeaMicro boxes into markets that are hot for the new ‘microserver’ category, and do it with any ISA that the customer wants. At least on the server side, there is no technical impediment to this at all.
As SemiAccurate has been saying for months now, the next generation XBox is due in the fall of 2013 should all go well with the foundries. That part is very likely what AMD is referencing when talking about embedded revenue coming in during that time frame. The XBox Next is AMD CPU cores, AMD GPU cores, and mostly AMD everything else. The follow on to the PS3, lets call it the PS4, is also AMD CPU, GPU, and somewhat AMD other. That will be a 2014 product. The Nintendo WiiU has an AMD GPU as well, and that will be on sale in weeks. There are a few more design wins that SemiAccurate is hearing about, some large, some small. At least one potentially huge one we think will die a horrid death due to the partner, not anything AMD has control over.
Without going in to too much detail, what AMD said was exactly what we have been telling our clients they are doing for over a year now. There wasn’t much new to readers of SemiAccurate either, just a few details. We have been very critical of AMD’s messaging lately, and the most recent analyst call is a move in the right direction. Unfortunately it does not erase the self-inflicted chasm of confidence among many observers.
AMD may have a plan, AMD may have IP, and AMD may be working toward putting all three in to products that sell. The sole remaining question is the only one that matters. It was voiced quite directly during that call by UBS analyst Steve Eliscu when he asked if AMD was getting paid for that IP. Until they can show that they are, and are being paid well, everything else is irrelevant.S|A
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