AMD's New Roadmap: Can It Find the Way?

Advanced Micro Devices (AMD) has revamped its server processor roadmap with plans to jump to six and then 12 cores in the first half of 2010, but the larger question is whether the company can actually deliver.

Given that AMD has had a hard time delivering its quad-core chips and only recently started shipping, it’s a bit of a leap to put a lot of faith in this new roadmap. AMD is a “prove it” company right now. It has to prove it can execute. AMD CEO Hector Ruiz is on the hot seat on Thursday as the company updates shareholders about its plans. Analysts are clamoring for details (again) about AMD’s asset light manufacturing model and are speculating about a potential breakup, a long-shot scenario that doesn’t make a lot of sense at the moment.

But first, here’s AMD’s roadmap detailed in a fact sheet. News.com’s Tom Krazit also has a handy breakdown.

Randy Allen, corporate vice president for AMD’s server and workstation group, updated the server roadmap to align with “end-customer priorities.” The key roadmap points:

• AMD is skipping plans to deal with an eight-core chip. It’s going from six to 12 cores.
• “Shanghai” is on track for production in the second half of the year. This chip is AMD’s first 45 nanometer processor and will increase Level-3 cache from 2 MB to 6 MB.
• “Istanbul,” a six core processor, will come in the second half of 2009.
• Third generation Opetrons land in the first half of 2010.
• Six- and 12-core Opterons land in the first half of 2010. “Sao Paolo” will incorporate DDR3 memory, more HyperTransport 3.0 links and a 6-core design. “Magny Cours” will be the 12-core processor version.

These chips would apparently be manufactured under a new model for AMD. Ruiz is expected to detail the company’s asset smart model and talk about manufacturing partners. Here’s what JMP Securities analyst Krishna Shankar says:

AMD expects to announce in 2008 more details of its Asset-Smart strategy to reduce capital spending by partnering with a foundry or another semiconductor company. AMD indicated good progress in the Asset-Smart strategy development.

It appears that the New York facility, where AMD has an option to build a next-generation 300mm fab with over $1 billion in tax rebates and subsidies from the NY state government, will figure prominently in AMD’s Asset-Smart strategy, with IBM being a logical potential partner given AMD’s participation in the IBM technology club, joint development over the last seven years, and proximity to IBM facilities in upstate NY. AMD also indicated that the Asset-Smart strategy would not violate the terms of the AMD/Intel cross-licensing agreement. The AMD/Intel cross-license is up for renewal in January 2010, and AMD management indicated that they have confidence in their growing IP portfolio and ability to renew the license.

Can AMD deliver on that roadmap and its manufacturing strategy? That question looms large. AMD can restructure, go asset light and do a bunch of things, but the largest item on its list is hitting its roadmap targets.

JP Morgan analyst Christopher Danely sums it up:

Regardless of any changes in the corporate structure of AMD, we believe improved execution and management is key to stabilize AMD’s pricing and gain back market share in the microprocessor market. We do not currently see evidence that is happening.

The challenge for AMD: Don’t tell us what you’re going to do. Show us.

Comments

[Malkiel]

They're running out of project names for their chips. How about the "Maltese Falcon", or the "Scarlet Pimpernel"?...

[CPU watchtower]

AMD better get moving. Intel is bent on copying everything AMD did and using it to slaughter AMD. Intel is preparing Nehalem by copying Opteron features like the crossbar switch, Hypertransport, monolithic quad-core, and the NUMA design. With those features, Intel will steal the 4 socket server business away from AMD. If I were part of AMD management, I would have AMD copy pieces of Intel's Core 2 microarchitecture, like macro ops fusion and memory disambiguation. And increase clock speed. Fight fire with fire! Yeah, well, of course it won't happen. With clueless Hector around the company is headed to the grave.