Bottom of the Ninth, Bases Loaded for AMD


AMD is facing one of the most crucial decisions of its brief but storied history. The company is pondering a split of its main business units amid a management reshuffling and a chip industry hurtling forward in both general purpose CPUs and high-end graphics processors.


How well it carries out its strategy over the next six months or so could very well determine its future as a viable silicon vendor capable of countering intense competition from Intel.


First, the news. As TG Daily reports, Hector Ruiz is stepping down as CEO following a $1.2 billion second-quarter loss, although he will remain as board chairman to oversee what is widely expected to be a break-up of the company into two independent entities as part of the so-called Asset Light/Asset Smart strategy. Apparently, the goal is to have one unit devoted to chip development and a second to oversee manufacturing. Word has it that the company is planning a major announcement sometime next month, although speculation on the details is all over the map.


All of this is happening while the company continues its direct assault on Nvidia for the high-end graphics market. The new ATI Radeon HD 4870 X2 dual-GPU graphics card is said to beat Nvidia's GTX280 performance by half, even while shaving 50 percent off power consumption. A win in graphics would be a major boost to AMD, quieting much of the grumbling over the $5.4 billion purchase of ATI in 2006.


AMD's role as top dog in graphics might be short-lived, however, with Intel making noise about the forthcoming Larrabee architecture, which could be out within the year. Intel is developing a "many-core" design featuring parallel processing and 64-bit extension technology that not only boost graphics capabilities but has broad applications in general-purpose computing as well.


AMD will also have to contend with the upcoming Nehalem quad-core processors, which will be branded as the "Core i7" line when they hit production in 2009. This will be Intel's true quad core, unlike the dual dual-core approach of the Penryn device, and will also feature an integrated memory controller and adjustable cache like the Opteron quads.


It's not easy being the junior competitor to a market leader like Intel. You not only need a development edge, but you have to execute perfectly -- two requirements that AMD has failed to live up to lately. But continued dominance by a single vendor is never good for any market (just ask Windows users), so here's hoping that AMD can pull this off successfully -- if not for their sake, then for ours.