Despite AMD's financial troubles, the company has no choice but to move aggressively into consumer electronics. "From the perspective of a short-term strategy, it may not seem critical because of their current financial situation," said Jim McGregor, analyst for industry research group In-Stat. "But long term, it's very important to their success and survival."
In targeting consumer devices, AMD is developing an x86 core called Bobcat, said Phil Hester, corporate VP and chief technology officer for AMD. The core is designed to run on as little as 1 watt of power, and is scheduled to be available in a line of products starting in 2009. The processing core also will be in future versions of ATI Technologies' Xillion graphics processors used in digital TVs. AMD acquired ATI a year ago for $5.4 billion.
Bobcat will compete with Intel's Silverthorne, a standalone processor that will power ultra-mobile PCs and handheld Web browsers. Intel plans to ship its processor in the first half of next year.
AMD also is working on a new core for servers and desktops codenamed Bulldozer, Hester said. Bulldozer will consume from 10 watts to 100 watts of power, and will surpass anything AMD makes today in terms of performance.
AMD said it believes the graphic technology it acquired with ATI will provide features for its chips that Intel won't be able to match on its own. "If they're going after the same customer base that we are, then they're going to have to deal with that," Henri Richard, executive VP of sales and marketing, said during a question and answer session.
The processor AMD expects to be unmatchable by Intel is called Fusion. Fusion merges graphics and CPU cores, which AMD claims will boost the visual performance of notebook and desktop PCs. The first line of Fusion chips is called Falcon and is scheduled to ship in 2009.
One area where AMD is looking to reduce costs is in manufacturing. Doug Grose, senior VP for manufacturing and supply-chain management, said the company has finished a plan to reduce manufacturing expenses, but didn't disclose details. Nevertheless, he said the company is strongly committed to running its own fabrication plants -- or fabs -- while outsourcing some processes to partners Chartered Semiconductor, Taiwan Semiconductor Manufacturing, and United Microelectronics.
Nevertheless, AMD doesn't plan to downsize to become profitable. "We're not going to cut ourselves out of this situation," Richard said. "We're going to continue to invest cautiously where it matters."