Hands up, who prayed for AMD? Well, it worked

Mini-Chipzilla licenses CPU tech to Chinese manufacturer – and the crowd goes wild

About a year ago, we asked you to pray for AMD. It's working.

AMD has announced a joint venture with a Chinese manufacturer that will churn out server processors using mini-Chipzilla's technologies in the Middle Kingdom. It also said it will bank about $1.5bn from three new games console chips over the next three or four years. AMD's share price soared 22 per cent in after-hours trading on Wednesday, cracking the three buck mark.

Earlier the California chip designer had published its Q1 financial results for the three months to March 26. Here's the summary:

  • Revenues: $832m (£581m), down 19 per cent year on year.
  • Operating loss: $68m (£47m), better than last year's $137m loss.
  • Earnings per share: Minus 12 cents, which was slightly better than analysts expected.

The main news, though, is that AMD and THATIC – Tianjin Haiguang Advanced Technology Investment Co – have formed a joint venture to, in AMD's words, "develop system-on-chips tailored to the Chinese server market that will complement AMD’s own offerings." AMD has basically licensed its microprocessor technologies to THATIC, which will build chips for enterprise, data center and government buyers in China.

The deal netted AMD $52m in cash this quarter. Another $25m is due next quarter, and $293m in total will be received if various engineering milestones are reached. AMD will also receive royalties on the JV's chips. AMD CEO Lisa Su was a little coy on a conference call about what exactly was being licensed, but she said it was all AMD's own technology, and nothing encumbered. In other words, you can't touch this, Intel.

It's assumed AMD has licensed its upcoming x86 Zen CPU designs to THATIC so that it can produce customized system-on-chips to suit Chinese server makers and customers who want some homegrown tech rather than Intel imports. Samples of Zen-based CPUs are due to be shipped to "priority" AMD customers in the next quarter; the processors are expected to reach general availability for data centers in 2017. How or when Zen will appear for the desktop world is not clear.

Su would only say that AMD has licensed its "microprocessor and system-on-chip" technologies, which also includes things like fabrics and other interfaces. Judging from the conversation, it sounds as though this bundle includes x86 and ARM designs (AMD has a 64-bit ARMv8 server chip, Seattle) but the focus will be on x86. The deal is also non-exclusive: AMD can find other server chip makers to partner with in China if it wants.

The JV's deal has been closed and its operation is already underway. "This is very positive for us because it leverages our intellectual property and gives us a very key partner in the Chinese market, which is very important for data center growth," said Su.

Quarterly breakdown

AMD's overall sales were down 13 per cent sequentially, mainly due to following a Christmas gift-buying season, and down 19 per cent year-over-year due to lower sales of PC notebook processors and lower custom semiconductor sales. AMD's semi custom business is basically the chips it makes for games consoles and the like. A 4K Sony PlayStation due to launch in the second half of 2016 is expected to use AMD CPU and GPU tech.

Su said her biz had recently secured three custom semi design wins which will have a lifetime revenue of $1.5bn or more, spread out over the next three to four years. She added that business will start ramping up in 2H 2016 in time for the 2016 Christmas shopping spree, hint, hint. These three new chips are expected to emerge in new consoles from Nintendo, Microsoft, and well, we'll have to wait to find out.

Average AMD desktop processor prices for the quarter fell year-on-year and sequentially; GPU prices fell sequentially but were up on last year. AMD's new Polaris GPUs are due to launch the second half of this year.

Sales from the Enterprise, Embedded and Semi-Custom segment fell to $372m, down 24 per cent sequentially and 25 per cent year on year, due to lower sales of custom SoCs.

AMD reckons its revenues will be up about 15 per cent quarter-to-quarter in the next three months, although analysts reckons it will be closer to seven per cent, or $889.2m. The company hopes to slip into the black, non-GAAP, in the second half of 2016. ®

Similar topics

Other stories you might like

  • UK Home Secretary delays Autonomy founder extradition decision to mid-December

    Could be a Christmas surprise in store from Priti Patel

    Autonomy Trial Autonomy founder Mike Lynch's pending extradition to the US has been kicked into the long grass again by the UK Home Office.

    Lynch is wanted in the US to stand trial on 17 charges of fraud and false accounting. He is alleged to have defrauded Hewlett Packard investors over the sale of British software firm Autonomy in 2011.

    Continue reading
  • Want to buy your own piece of the Pi? No 'urgency' says Upton of the listing rumours

    A British success story... what happens next?

    Industry talk is continuing to circulate regarding a possible public listing of the UK makers of the diminutive Raspberry Pi computer.

    Over the weekend, The Telegraph reported that a spring listing could be in the offing, with a valuation of more than £370m.

    Pi boss, Eben Upton, described the newspaper's article as "interesting" in an email to The Register today, before repeating that "we're always looking at ways to fund the future growth of the business, but the $45m we raised in September has taken some of the urgency out of that."

    Continue reading
  • All change at JetBrains: Remote development now, new IDE previewed

    Security, collaboration, flexible working: Fleet does it all apparently

    JetBrains has introduced remote development for its range of IDEs as well as previewing a new IDE called Fleet, which will form the basis for fresh tools covering all major programming languages.

    JetBrains has a core IDE used for the IntelliJ IDEA Java tool as well other IDEs such as Android Studio, the official programming environment for Google Android, PyCharm for Python, Rider for C#, and so on. The IDEs run on the Java virtual machine (JVM) and are coded using Java and Kotlin, the latter being primarily a JVM language but with options for compiling to JavaScript or native code.

    Fleet is "both an IDE and a lightweight code editor," said the company in its product announcement, suggesting perhaps that it is feeling some pressure from the success of Microsoft's Visual Studio Code, which is an extensible code editor. Initial language support is for Java, Kotlin, Go, Python, Rust, and JavaScript, though other languages such as C# will follow. Again like VS Code, Fleet can run on a local machine or on a remote server. The new IDE uses technology developed for IntelliJ such as its code-processing engine for features such as code completion and refactoring.

    Continue reading

Biting the hand that feeds IT © 1998–2021