How Far Will AMD Go With ARM?

AMD's beleaguered management team is dropping some big hints that it's ready to join the upwardly mobile ARM camp rather than defeat it.

Advanced Micro Devices this week announced a new line of products for embedded systems like smart TVs, set-top boxes, and interactive digital signage. The first iteration of the chipmaker's Embedded G-Series System-on-a-Chip (SoC) platform, carrying a little "x" on the product logo, will combine AMD's next-gen x86-based CPUs, code named Jaguar, and Radeon 8000 Series graphics.

That's par for the course—AMD remains the second-biggest maker of x86 processors—even if the sluggish PC market has diminished that title considerably of late.

What's far more interesting is that AMD has reportedly left the door wide open for future G-Series SoCs based on ARM instead of x86. That little "x" could prove to be very significant, as Engadget and Bloomberg noted following Tuesday's announcement.

"The logo for our latest G Series chip has an 'x' in the bottom right corner. That signifies it's an x86 product, but it also sets us up to have an ARM version as and when we choose to. Ultimately, we're going to have both x86 and ARM in our product portfolio," Arun Iyengar, vice president and general manager of AMD Embedded Solutions, told the two sites.

That's not an official announcement that AMD plans to incorporate ARM into a broad class of future products, but it's more than just a hint that this idea is being kicked around in Austin. AMD has already licensed ARM for future server chips. Doing the same for embedded SoCs and even client-side processors makes a lot of sense for the company, according to Patrick Moorhead.

"AMD has already committed to use ARM on servers, so technologically, putting them in clients isn't a big feat for them. ARM-based AMD client SOCs could enable them to hit lower power envelopes and leverage the ARM ecosystem. Unlike Intel, AMD cannot afford a new low-power architecture like Atom that achieves less than 1 watt in phones," said Moorhead, principal analyst for Moor Insights & Strategy.

What's clear is that AMD needs to do something to turn things around. After a decade of restructuring, executive departures, the acquisition of ATI Technologies, and the spin-off of its manufacturing business, AMD remains the sick man of the semiconductor industry.

Last week, the company reported another losing quarter, the latest in a string of such disappointing performances. Plenty of semiconductor companies had a rough go of it in 2012. But of the 25 largest, AMD brought up the rear—suffering a whopping 17.6 percent decline in sales for the year, according to IHS iSuppli.

By contrast, ARM has been on the rise since the explosion of smartphones and tablets ushered in a new era of processor design where battery life is king. The U.K.-based chip design firm's ultra-low power architecture now underpins the processors inside Apple's iPhone and other top-selling mobile devices. The payoff has been huge—on Tuesday, ARM announced another impressive earnings quarter which saw 2.6 billion ARM-based chips shipped, a 35 percent year-over-year increase, according to the company.

AMD has been sending signals that it wants in on the ARM revolution for some time now. Last June, the chip maker joined ARM and several other semiconductor firms in forming the Heterogeneous System Architecture (HSA) Foundation, a working group for developing open software-hardware standards to counter proprietary technologies owned by rivals like Intel and Nvidia.

ARM was the featured guest at AMD's Fusion Developer Summit last year. In late October, AMD took that flirtation to the next level with the announcement that it would be licensing the ARM architecture for use in future Opteron server chips.

But if AMD is planning to go even further with ARM, the chipmaker is taking a "very cautious" approach, according to Jack Gold, principal analyst with J. Gold Associates.

"I'm not yet sure how committed AMD is to ARM. So far it's mostly as peripheral processing, like security, to the x86 core. That said, they could take the same route Nvidia took, marrying the ARM processor with the graphics capability they have," Gold said.

But it could be a "damned-if-you-do, damned-if-you-don't" situation for AMD, the analyst added.

"Trouble is, it would take them some time to do this effectively, and they are way behind the competition, e.g. Nvidia, Samsung, ARM/Mali, and even Intel at this point. AMD has to concentrate and can't go in too many directions at once because they don't have the resources, so I'd be surprised to see them move aggressively into ARM," he said.