Dec 8, 2007

Oil In AMD

We must agree to one thing, Advanced Micro Devices on thin ice with severe pressure from chip rival Intel and four consecutive quarterly net losses. The Core2Duo is really eating AMD. As for me, I have been an AMD loyal fan since the good old 486 processor days. I have never believed that I must pay advertising costs to Intel. So I do find it sad that the pioneers are facing trouble. So this news comes as a bright spark. The cash infusion by an Abu Dhabi government investment arm could help the struggling chip maker remain competitive.

Mubadala Development Company, in Abu Dhabi, United Arab Emirates, has reportedly paid US$622 million to acquire an 8.1 percent stake in AMD. Mubadala Development is owned by the Abu Dhabi government.

According to Drew Prairie, a spokesman for AMD, This investment will be used by AMD for a long-term strategy in research and development, products and manufacturing. The money may be used toward the development of "Fusion," which will integrate a GPU (graphics processing unit) and CPU on a single die. Fusion is expected to be delivered by late 2008 or early 2009. Now that is a sure great news.

AMD is currently developing processors at 65 nanometers and losing processor market share to Intel, which recently released the power-efficient 45-nanometer Penryn chip. Intel is also investing heavily to open new fabrication plants to manufacture 45-nm chips. Needless to say, that is where he focus of AMD should lie. Looks like 45-nm is the next big thing after 64 bit, so AMD needs to invest in R&D and quickly develop its future chip architectures to keep up with Intel.

AMD is expected to launch the "Spider" platform shortly, which includes the next-generation 65-nm quad-core Phenom processor that will better support graphics cards to deliver high-quality graphics to PCs. In a financial earnings call last month, AMD said it would jump to the 45-nm chip manufacturing process by mid-2008. You ask me, I am sure AMD can give Intel run for its money. They have done it before with the launch of 64 bit and made Intel offer such heaters as dual core. Well, that truly is history and the wait of quad core wars, The Quadfathers, is anticipated soon.

The investment also has analysts speculating that AMD could build a fab in the Middle East in the next five years. AMD competitor Intel has a presence in the Middle East, with a chip plant in Israel. In addition, because Mubadala invests in education, the AMD deal could ultimately empower technology education in the Middle East.

Here is wishing AMD all the best from a basic user who does not understand anything about 64 bit or nano technology, but believes in these products for better performance at an affordable price. I sincerely hope this Oil In AMD makes Intel slip.

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