AMD has vowed to break Intel's "monopoly grip" on the chip market by offering more flexibility to PC makers and moving into emerging markets.
Following its acquisition of ATI Technologies, the chip company is looking to offer chip platforms, including a central processing unit, a graphics chip and chipset, for use by PC manufacturers, said AMD chief administrative officer Thomas M. McCoy. This platform approach copies that used by AMD main rival and dominant chip company Intel.
New platforms will be used to move AMD into the expanding digital device market, where ATI graphics chips have a stronghold. AMD will also move into emerging markets, such as South America, India, Western China and Africa, where demand will rise for low-cost, integrated processors with graphics capabilities, McCoy said. "In particular, we need to grow our business on the mobile side," McCoy said, adding ATI is strong in the sector.
AMD's partnership with nVidia, ATI's main competitor in the graphics chip market, will not change, McCoy said. AMD is "highly dependent" on nVidia and will continue to work with the company as long as customer demand remains, he said.
ATI has worked with Intel for decades even though Intel has been developing its own in-house graphics processing capabilities. The purchase by AMD will not shut out Intel, McCoy said. "It will be Intel's choice if it wants to preclude that [relationship] or not," McCoy said.
He then claimed that Intel has hurt PC makers by not giving them enough of a selection of chip platforms, and that the end result is limits to innovation by the manufacturers. AMD will of course correct this by letting PC manufacturers have a greater say in designing chip platforms.
PC manufacturers would like to see a market where two chip producers hold equal market share, since the manufacturers could then play off the suppliers against each other, according to Gartner analyst Brian Gammage. However, PC manufacturers may not show much interest in AMD's plan to offer more input in chip design since uniformity of PC components is key in the PC industry, Gammage added.
"There’s a very clear gamble going on here," Gammage said. "AMD's looking to buy this acquisition to take a greater share in a market where when volumes go up, prices come down."
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