AMD Ramps Up APU Production

Due to explosive demand for its accelerated processing units during the first quarter of 2011, Advanced Micro Devices is reprioritizing its production schedule to produce more of its Fusion and upcoming Llano APUs. As a result, the company will delay shipments of its high performance desktop FX-series microprocessors, code-named Zambezi, microprocessors until September.

The reprioritization for AMD is based on increasing demand for its APUs from computer manufacturers creating thinner, lower powered laptops. AMD sold out of its Fusion processors during the first quarter of this year, after seeing 1.3 million APUs sold during the fourth quarter of 2010 and 3.9 million sold during the first quarter of 2011.

The shortage, however, has cut into sales, with AMD reporting only 1.1 million units sold during the following two months of the first quarter.

"What this really boils down to is ramping our mainstream desktop APU platform, code-named Lynx, for shipment later this quarter and volume shipment starting in Q3," said Phil Hughes, PR Manager at AMD, in an interview. "We've had a lot of success with our Z-series APUs and we're responding to a high demand for our APUs and higher market opportunities for mainstream desktops."

The FX-series processors, based on the "Bulldozer" micro-architecture, are geared to high-end gaming and were originally set to be released this month, but will ship sometime late summer, Hughes said.

A primary focus now for AMD is the increase of production for its Fusion processors: the E-Series APUs, codenamed Zacate, and the C-Series, codenamed Ontario. It is also looking to release its A-Series Llano APUs as part of the AMD Lynx platform, due for release later this month. The chips will feature four x86 cores paired up with DirectX 11 GPU and higher energy efficiency than their predecessors, AMD said. They are scheduled to appear in larger mainstream laptops and desktops, as well as notebook designs.

AMD's Fusion processors compete with Intel's Atom-based processors, but have a lower price and better graphics capabilities said Nathan Brookwood, research fellow at Insight 64, a market research and consulting firm, in an interview.

"Anyone looking to build a product that can compete in the netbook, low-end notebook, or tablet space, will find Fusion products very compelling from a price and performance standpoint," said Brookwood. "The design is very good with performance per watt, which has enabled AMD to have virtually all day battery life."

AMD admits to not accurately forecasting the strong demand it has seen for its Fusion processors. The demand is being drive by increasing consumer and product manufacturing demand for smaller and more powerful consumer laptops that range from 11.6 and 14 inches.

Computer manufacturers like Hewlett-Packard, Lenovo, and Sony have created new 11.6-inch laptops designed around Fusion that are packaged as smaller laptops, instead of netbooks. Both the HP dm1and Lenovo's ThinkPadX120e use AMD's E-series APUs.

"I think demand in the first quarter definitely exceeded our forecast," Hughes said. "I think what it is, is that consumer expectations are for all day battery life and they feel entitled to that sense of mobility and freedom. Right now we're looking at the right combination of CPUs, graphics, videos, and all day battery life for our APUs."

AMD is still on track to ship its new 16-core AMD Opteron processors, code-named Interlagos, in the third quarter of the year. They are aimed at powering high-performance computing, databases, and virtualization. AMD introduced its 8-core and 12-core Opteron server processors earlier this year.

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