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With declining sales in the PC industry, Advanced Micro Devices (AMD) is going big on embedded systems. It recently announced the new embedded G-series system on a chip (SoC) platform, which is a single chip solution based upon the AMD next generation Jaguar CPU architecture and AMD Radeon 8000 series graphics. AMD has already started revenue shipments of Kabini, the silicon that powers this new embedded G-series SoC. Can AMD make a comeback in the ever-competitive PC microprocessor market with the new Jaguar based SoC?

Embedded System Market

The embedded system market is expected to grow at a CAGR of 7% over the next 5 years. The market is forecasted to reach $222 billion in 2018 according to GIA's latest report. Hardware segment represents most of the embedded system market with over $110 billion market share. The market is gradually gaining importance as the PC market is falling. Market research firm IDC says that the PC market grew by a mere 0.9% in 2012. Every single chip manufacturer is focusing on smartphones, tablets and even cars. In light of this, embedded systems is also becoming a strategic focus as it is a high growth area. These systems are used from smart TV to informational kiosks and interactive digital signage. It is deemed to be the next generation computing which is driven by single chip, high performance SoC solutions.

Another main focus area is Surround Computing, in which the microprocessor led intelligence turns out to be an inherent functionality, which is gradually used in all types of devices around us. The surround computing concept is another future growth area, which is actually driven by these energy efficient, high performance single chip SoC solutions.

AMD Embedded G-Series

The embedded system is historically dominated by SoC based on ARM Holdings (ARMH) and MIPS designs. However, the new AMD Embedded G-Series APU sets the new benchmark for SoC design and can prove to be better than the original players.

Some of the features of this new system are:

  1. 113% improved CPU performance over the earlier AMD Embedded G-series APU
  2. 125% advantage over Intel Atom when running industry standard graphics intensive benchmarks
  3. Enterprise-class Error-Correction Code (ECC) memory support
  4. Low power consumption, 33% smaller footprint

Use of this system

The new embedded G-series is compatible with both Windows 8 and Linux platforms. It is designed for a variety of applications like digital signage, electronic gaming systems, SMB storage, IP-TV, medical and network appliances and set-top boxes. The SoC has high graphics performance on a small footprint, which can be used in industries like operator panel applications, which requires intensive graphics.

Intel, a big wall standing between AMD and its future

Given the PC industry's stalling growth, other players like Intel (INTC) are spending aggressively on new innovations. Haswell, the new architecture by Intel, is built on the low power Trigate process and can be a huge technological shift. AMD on the other hand is looking for 20% of its revenues from the new embedded solution in the near term and over 40% in the future. Competing with Intel has not been a good thing for any player, but I still like the fact that AMD does not think itself to be out of the race. The new Jaguar APU's are already developed to be used in the next PlayStation 4 and Xbox 720 releases and have a strong market pull.

AMD not performing good, but can bounce back

In the recent quarterly results, AMD suffered an operating loss of $98 million and revenue decreased 31% year on year. The stock is trading at a low $2.68 and had witnessed a record slide in the previous year. At one point of time, it declined by a huge 60%.

Investors have seen both profit margins and sales dipping down. The market share of AMD in the PC microprocessor market is just 17% compared to Intel's 83%. Having over 75% of its business from PC sales, AMD remains competitive to Intel only in some low-to-medium priced market segments. However, the company can bounce back with its new innovations.

Conclusion

The key to AMD's comeback is the success of these new innovations it is bringing into the market. It remains to be seen what happens to this new SoC. IDC predicts the PC microprocessor market to grow 1.6% to $40.7 billion in 2013, which is good news for all the chip makers. Embedded systems have a lot of potential and if AMD capitalizes on it effectively, it is surely going to make a mark in the future.

Source: AMD Betting Big On Embedded Systems