Talk all you want about AMD’s fairly well-regarded products, its struggling financials, and its emerging, stable semi-custom business that’s helping keep the company afloat. But what it all boils down to for AMD chief executive Lisa Su is AMD’s corporate reputation.
“The idea that AMD is a cheap solution has to be replaced with the idea that AMD is a very competitive solution,” Su said in a roundtable with reporters here at CES.
That’s not news. AMD has wrestled with that problem for years, as the company launched CPUs, GPUs, and eventually combined the two into APUs. And whatever advantages AMD has touted on paper apparently haven’t convinced hardware makers, as AMD has reported more quarterly losses then profits over the past few years, and lost $403 million for all of 2014. (AMD has yet to report its results for the fourth quarter of 2015 and the year.) Over the past several years, AMD has explored creative ways to cut costs including divesting itself of its manufacturing operations, leasing its corporate offices, layoffs, and pursuing joint ventures on portions of its business, such as assembly and testing.
Su acknowledges this, even as she maintains that 2016 will be different. “The overall expectation is that AMD will be a better year from a financial standpoint compared to 2015,” she said. “I think we have chosen to bet on technology, and the assumption is that the overall revenue, market share, profits, all that will follow. But that remains to be proven.”
Pulling even with Intel
So what’s different this time around? For one thing, Su believes that the initial manufacturing of AMD’s next-gen GPUs in its nascent FinFET technology will help AMD pull even with Intel, whose steady “tick-tock” advances in manufacturing helped push it into low-power processors and products like two-in-one devices. AMD showed off its first 14-nm FinFET GPUs this week, dubbed Polaris.
From there, Su added, AMD’s superior design technology should help it pull ahead. Five years ago, which company was first to a particular manufacturing node was one of the biggest differentiators for companies, Su said. Now the importance of that advantage has diminished, she said.
“There’s no question that process technology has been a big knob to turn, in the performance and power spectrum,” Su added. “That’s why we went to FinFET, that’s why we went to FinFET relatively early, because we saw the power benefits.”
AMD is establishing a number of products on 14-nm FinFET in 2016, Su said. “But it will be a long node. It will last three, four, five years. But within that node we can do a lot in optimization, and within that node, we can do a lot on power… once you’re in the node, it’s all about architecture.”
AMD’s next-generation architecture is dubbed Zen, scheduled to be released in 2016 for servers and high-performance desktops. AMD has promised a 40 percent improvement in performance compared to the current generation. “I get a lot of notes from enthusiasts saying that I would like to see Zen sooner,” Su chuckled.
But while Su said she sees a lot of strength in the traditional PC market, Windows 10 hasn’t moved the needle. “It’s not inflecting hardware sales up, if that’s what you mean,” she said.
Consoles are a stabilizing force
AMD has ridden the wave—downward, of late—of the PC market, even as it works to expand into new markets. While Intel has used its Xeon server processor business to offset the ebb tide of the PC market, AMD has successfully expanded its semi-custom business, supplying the components of all three major game consoles. By the end of 2015, Su said, AMD should split its revenue 50-50 between its PC and non-PC businesses.
AMD’s Su described the game console lifespan as a “5- to 7-year cycle,” but said that there would be opportunities to “cost reduce” the chips inside them before the current cycle ended. Previous consoles have taken the same approach, with the original “fat” PlayStation 3 giving way to a slimmer model, for example. But she declined to say when that would happen.
Instead, she pointed to products like drones as as well as Oculus Rift and similar VR devices as opportunities for AMD. Su said that she had participated in demos of both the Oculus Rift and HTC Vive at CES. “They’re good, but there’s a lot of room for improvement,” she said.
“Whether you’re talking about a drone or a PC, I’m not exactly sure the CPU is all that different,” Su said.