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Fusion processors are cheap, power efficient, and pack a powerful GPU -- a winning combination for budget designs.  (Source: Computer Shopper)

The chip has helped AMD finally turn the corner and return to profitability.  (Source: Maximum PC)

  (Source: Comic Vine)
Once troubled chipmaker appears to be turning the corner thanks to GPUs and CPU/GPU "Fusion" combos

Advanced Micro Devices, Inc.'s (AMD2006 purchase of ATI Technologies for $5.4B USD was widely criticized and scrutinized at the time.  But it now appears that it may have saved the company.

After a couple years of losses, AMD finally appears to be turning the corner this year.  The company reported [press release] an impressive net income of $510M USD on revenue of $1.61B USD.  Its operating income was $54M USD and its non-GAAP income was $54M USD.

The strong earnings were largely driven by AMD's continued dominance in GPU sales.  They also were driven by AMD's new Fusion system on a chip that packs power-savvy Bobcat CPU cores on a die with a full Evergreen (found in the 6000 series) GPU.

OEMs appear to be embracing the chip.  Acer, Asus, Dell, Fujitsu, HP, Lenovo, MSI, Sony and Toshiba have all launched Fusion designs.  And the chips are also becoming popular in the embedded sector for devices like casino machines, which need a more power GPU to drive a large screen.  Fujitsu, Kontron, Quixant and Congatec are all pushing embedded applications of Fusion chips.

Thomas Seifert, CFO and interim CEO, elates, "First quarter operating results were highlighted by strong demand for our first generation of AMD Fusion Accelerated Processing Units (APUs).  APU unit shipments greatly exceeded our expectations, and we are excited to build on that momentum now that we are shipping our 'Llano' APU."

The Fusion chips are proving so popular for several regions.  First, AMD has priced them very competitively, so they're winding up in very affordable laptop designs.  Secondly, the chips are very power efficient.  And finally they offer a nice performance blend, offering sufficient CPU performance and relatively powerful GPU performance.

By contrast Intel Corp.'s (INTC) latest design Sandy Bridge, also packs an on-die CPU/GPU pairing.  But the onboard GPU is significantly weaker, the power consumption is higher, and the chip is more expensive.  Thus while it is solution of choice for high-power enthusiast desktops and laptops, it's less than optimal for the much larger budget laptop/desktop market.  

Sandy Bridge was also hurt by early defects in its SATA connections, which have since been fixed.

A common criticism leveled against Fusion is that having a discrete GPU in a budget design is superfluous.  However, for Blu-ray playback or playing popular older video games like World of Warcraft, customers definitely come to appreciate the benefits of the design.

It appears that AMD is, at the moment, out-competing Intel much in the same way it outcompeted graphics chipmaker NVIDIA Corp. (NVDA) -- by attacking the low end.  Of course, AMD's growing Fusion sales likely would not have been possible were it not for new scrutiny from U.S. and European antitrust regulators that forced Intel to stop paying off OEMs to ignore AMD designs.

It's worth noting that Intel still leads AMD significantly in market share.  AMD is also experiencing leadership troubles of late, with a number of executives departing.

But at the end of the day, though, even in the face of these issues and bigger questions loom about the future of x86 processors as a whole, AMD looks much better positioned to be competitive with Intel.  And all of that comes back to the increasing returns from its strong GPU division.

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RE: Glad to see it
By semiconshawn on 4/24/2011 4:49:09 AM , Rating: 2
80% of a dying market. If you dont think the pc box as we know it is going away you live in cave. Intel is screwing up all over. You talk about Microsoft being late to the phone/tablet market wtf? Intel is as odd as it may seem at risk of being consumer obsolete. My teenage kids are into tablets and cell phones samsung, apple, htc, google even MS look to be in ok shape by my in house survey intel is nowhere to be found. My money stops in a few short years and my kids begins I would rather be Apple than Microsoft, Samsung than Sony, Microsoft than Sony, Google than anybody, and anybody but intel. Weird because I am a semiconductor equipment engineer and intel is the undisputed king of semiconductor fabrication. Im a bit of an intel fanboy in some ways...

RE: Glad to see it
By Reclaimer77 on 4/24/2011 8:41:33 AM , Rating: 2
You're funny.

Sorry but most of us like to get stuff done, not play around on a crappy touch screen all day. If you think the "pc box" is just going away, you're insane. Oh and please show me how the business sector is going to abandon the "pc box" and get productivity out of touch tablets and smart phones!

You are just all over the map with your post. Your kids, google, intel, MS...dude come on. Yup sorry Intel, it's over for you, this guys kids don't use your stuff!

RE: Glad to see it
By kaosstar on 4/25/2011 12:40:34 PM , Rating: 2
There are plenty of people "getting stuff done" on tablets, netbooks, and even smart phones. Traditional PCs are currently necessary for graphics, video, and other media work, and programming, to some extent. The desktop PC is almost a niche market already, and with the rapidly increasing power of more mobile devices, not to mention the trend toward harnessing the untapped potential of GPUs (and there are some very powerful GPUs even in phones now), it is clearly on the road to become an even smaller niche.

RE: Glad to see it
By Reclaimer77 on 4/25/2011 8:21:41 PM , Rating: 2
The desktop PC is almost a niche market already

That is an ABSURD statement. Do you know how many PC's are still out there.

Plus you proceed from a false premise that they are mutually exclusive. Tablets, ebook readers, and smart phones COMPLIMENT the PC, not replace it. I don't know anyone who has a mobile device that doesn't also have a PC, and uses it to enhance their experience.

RE: Glad to see it
By wordsworm on 4/27/2011 9:38:32 AM , Rating: 2
Complement, Reclaimer. A compliment is what you give your wife when she asks you how she looks.

Most PCs/laptops have sh*t for graphics because they're powered by Intel. I agree with several other posters here that Intel has made a grave error that might only be rectified by the purchase of nVidia, or perhaps by partnering with them (fat chance!)

So, if AMD can produce enough of these Fusion chips, they're going to cream Intel. However, as I said awhile back, I fully expect them to be constrained... again... by their ability to manufacture (or have manufactured for them) sufficient quantities to really compete. I still have yet to see one in the wild out here in Korea. Though, I have a plan to go to Seoul next month, which has an enormous electronics district. Surely I will find them there. I see them online: Fusion nettops that would cream all but the nVidia enhanced nettops, for the same price as a low end Atom.

That said, I think there may always be room for a high end CPU with discrete graphics. However, that remains to be seen... stay tuned!

"I modded down, down, down, and the flames went higher." -- Sven Olsen

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