Will 2016 Be The Year Of AMD?

AMD had a rough decade. Ever since Intel came out with their revolutionary Core architecture, that gave them the edge in the CPU wars again, AMD hasn’t found a way to respond them in a right manner. Years of struggle, with the acquisition of ATI (do you still remember how big their plans were back then) in 2006 haven’t given them the edge they were looking for. NVidia stayed the top supplier of graphic cards, Intel stayed top supplier of CPU’s, with AMD’s business shifting into the low and mid-range market. With latest rumors telling us that AMD will probably manufacture chips for upcoming PS 4.5 (which is no longer a rumor) and Nintendo NX, and AMD’s $293 million deal with the Chinese government for which they will build servers, the future look much brighter than before. Let’s see how they become the underdogs in both CPU and GPU markets and what they plan to do in order to finally become profitable again.

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Back in 2004 AMD had the upper edge in CPU wars. Athlon 64 was the best CPU line available, much more advanced than Intel’s Pentium processors offered during that time. Simply, NetBurst and Prescott architectures from Intel suffered from high power consumption, overheating and lesser CPU power. AMD had it all, their first dual core chips were better, they had plans to buy ATI, and their profit was solid. It all started to change when Intel came out with their amazing Core architecture. All of a sudden, Intel became the ruler again, taking over more and more of the market, and with each new architecture, they just widened the gap. AMD CPU’s completely lost their place in the top segment, moving slowly to mid-range. Their sales went down the drain and many people though that AMD will never come with a decent answer to Intel’s renaissance. The worst thing is that by 2006, AMD finally managed to take 25 percent of the server market, a market where Intel is a dominant ruler today, with AMD having less than one percent of the market share. Unbelievable, but if we take into account that ever since 2006 Intel constantly managed to  improve their architectures, while AMD struggled to find their winning formula, this result is somewhat expected.

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Things weren’t much better in GPU market. After AMD finalized a deal with ATI, they thought that manufacturing both CPU’s and GPU’s will give them the edge over both NVidia and Intel. As it usually goes, they were wrong. Having to fight on two sides, against two huge and powerful companies made AMD underdog in both CPU and GPU market. Similar to their fall after Intel’s Core architecture appeared, AMD failed to maintain its market share after NVidia released their GeForce 8 (8xxx) line of graphic cards. And while they managed to offer competitive products in recent years, they are still well below NVidia when it comes to market share. But AMD’s plans about having both CPU and GPU in one chip started to gain some ground in recent years.

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Their APU (Accelerated Processing Unit) architecture is a great idea, having both (graphics and processing) units on just one chip means less power hungry architecture that is perfect for laptops, but they still struggle to push this solution into PC segment of the market. This year could finally saw them taking some market share from Intel and NVidia. Since already supply chips for both Xbox One and PS4, their income is stabilizing, although they still suffer losses. Another good thing is their deal with the Chinese government that could finally see them moving into server market again, another potential silver lining in their business. Recent rumors saying that AMD will make chips for the next PlayStation (so-called PS 4.5) are probably true, meaning that AMD secured another steady source of income. And there is the fact that AMD will be the supplier of the both GPU and CPU chips in Nintendo’s next console, the already famous (even if it isn’t officially announced yet) NX. This could finally push AMD from the rut they were for the better part of the last decade. Stable incomes mean more money for research and development, and a cool head when making big decisions. And cool heads are needed because this year will see some interesting new developments in both CPU and GPU fields because AMD is planning to release new CPU architecture and a new line of graphics chips in 2016.

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New Zen CPU architecture is promised to bring a whopping 40 percent increase in instructions per cycle when compared with their previous generation. This could mean that AMD could become a serious player in mid-range segment again, and if Zen architecture proves successful, they could even challenge Intel in the High-end market, a front where Intel is dominating for the better part of the last ten years. Of course, this assault on the high-end market can’t happen during this year, but 2016 could be the year of AMD, but if we remember the grand promises they had with their Bulldozer architecture a little bit of doubt is a normal thing to have. Nevertheless, we believe that AMD will take a slice of the market from Intel, and with their constant improvements of APU architecture, maybe AMD will become the forerunner of the next big thing in PC world – a unified chip solution where GPU isn’t there just for the sake of being able to run new games on lowest settings. If APU architecture continues to advance, we could see APU’s that are able to run games in high settings, ending the need for two products, processor, and a graphic card. Instead, for less money, we could buy just one chip that will be more than enough for both CPU and GPU tasks.

 

AMD also plans to launch a new line of graphic cards, build on 14 or 15nm nodes. A big step from the current 28nm production process that will lower TDP, and also bring a hefty performance gain (at least in theory). If AMD succeeds in this, they could take a piece of the market from NVidia, stabilize their incomes and become a strong company again. Some optimistic predictions which could end up being true at the end. We hope that they end up being true because monopolistic market is never a good thing, and if AMD doesn’t succeed in their plans for 2016, Intel and NVidia will get to the point of being allowed to do what they want because there will be no real competition, and no one can prosper and develop without proper competition.

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