Over the past two years, Advanced Micro Devices (AMD) has proclaimed that “The Future is Fusion”, as it diverted customers from “The Smarter Choice” branding campaign launched several years earlier. But judging from the recently demonstrated AMD Fusion processor at Computex 2010, that future is not too far away.
AMD expects to launch the Fusion processor next year and is currently looking for technology partners that could help the platform take off. AMD has also announced a fund called the AMD Fusion Fund, which would make investments in smaller companies looking to create programs based on the Fusion platform.
Fusion basically combines the central processing unit (CPU), the graphics processing unit (GPU), video processing and other accelerator capabilities in a single-die design.
So what does this actually mean to us, the users? According to experts at Microsoft Corp. (MSFT), Adobe systems (ADBE), Arcsoft, Corel and Cyberlink, this, along with related software will dramatically change the speed and power at which we download, view, use and share rich, visual digital content.
We think this technology places AMD in a very attractive position versus Intel Corp. (INTC), which is still tied in grueling legal battle with graphics partner NVIDIA Corp. (NVDA).
We also believe management took a solid decision in forming Globalfoundries, although that decision initially came up against some criticism. But the fact is that AMD will now able to focus clearly on its core strength, innovation, which first enabled the company to take market share from Intel back in 2006.
In the short time since its launch, Globalfoundries has emerged as the third largest foundry in the world, behind Taiwan Semiconductor Manufacturing Co. (TSM) and United Microelectronics (UMC).
The Abu Dhabi state-owned Advanced Technology Investment Company (ATIC) that pumped $1.4 billion into Globalfoundries is still going strong.
Globalfoundries is now going to spend an additional $3 billion to expand its existing Dresden facility, as well as the new facility in New York that is currently under construction. It is encouraging to see that this will increase Globalfoundries’ 300 mm capacity by around 20%.
We are growing increasingly positive about AMD and believe the company is going places. However, we believe it will be a few more quarters before it is able to generate significant and sustained profits. We therefore have a Neutral recommendation on the shares. Additionally, the Zacks #3 Rank (“Hold”) for the stock indicates that we do not expect any unusual share movement over the next 1-3 months.
Read the full analyst report on “AMD”
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Read the full analyst report on “NVDA”
Read the full analyst report on “TSM”
Read the full analyst report on “UMC”
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