More than a few pundits have been ready to draw a sheet over AMD, as the company has steadily lost money and share of both the CPU and GPU market. Well, don’t call it a comeback just yet, but fortune is starting to favor Silicon Valley’s biggest underdog.
AMD just announced a new joint venture with Tianjin Haiguang Advanced Technology Investment Co., Ltd (THATIC) to build custom system on chips (SoCs) for the Chinese server market. AMD expects the total value of the deal to be approximately $293 million, with $52 million in revenue earned over the course of this year.
This is not a chip or product deal. CEO Lisa Su said this is a technology licensing deal. It’s a combination of x86 technology along with server fabrics, technology AMD probably acquired when it purchased microserver vendor SeaMicro.
PlayStation, Nintendo and Xbox wins?
Another bit of news is that there is a refresh of the PlayStation 4, called both the PlayStation 4.5 and PlayStation Neo. The big update to the 4.5 console is support for 4K video, which will likely mean a new Blu-ray drive to play back the emerging Ultra High Def (UHD) 4K resolution Blu-ray titles that are emerging onto the market. It’s also expected to get a SoC bump from the original product.
A CPU/GPU upgrade would be a break with tradition. Consoles are not upgraded over the course of their lifetime, so developers have one hardware configuration to target. There were some changes to the Xbox 360 over its lifetime, but that was limited to increased storage and a die shrink of the CPU because the manufacturing process had changed. It also kept the CPU from overheating and causing the notorious Red Ring of Death that bricked so many Xboxes. But essentially it was the same platform.
On a recent earnings call with Wall Street analysts, Su said AMD had won three major semicustom contracts that it expected to deliver in the second half of this year, with an estimated value of $1.5 billion over three to four years. The belief is that these wins are the PlayStation 4.5, Nintendo NX (its next-generation console) and an update to the Xbox One.
This isn’t too surprising, since AMD had already won the SoC contracts for the PS4, Xbox 1 and Wii U. So, the company managed to keep its customers. That’s also because they had nowhere to go. Nvidia, AMD’s rival in the GPU space, has no x86 part, and Intel’s GPUs, while improving remarkably with each new generation of CPU, are still catching up.
Su also said the next-generation CPU technology, called Zen, is moving through internal validation and meeting AMD’s internal goals. She said it would begin sampling the chip to priority customers in this quarter, with expected delivery of a data center product in 2017. She did not mention any consumer product availability.
Intel news update
A quick update on news from Intel. Fortune reports that CEO Brian Krzanich has convinced Aicha Evans, head of the mobile chip unit, to stay with the company. Evans’s name was among a slew of high-level executives departing the firm, either through retirement or moving to new opportunities earlier this month, but she has apparently decided to stay.