Review Index:

AMD Q1 2012 Earnings Analysis: Looking Back and Looking Forward

Author: Josh Walrath
Subject: Editorial
Manufacturer: AMD

The Importance of Graphics

AMD’s graphics division is certainly an important one for AMD. Right now that is the part of AMD that is really hitting on all cylinders, and the one which has the technology that really helps keep AMD competitive with Intel. This past quarter was hugely important for this particular division. 

Q1 saw the release and aggressive ramp up of 28 nm graphics products, and the entire lineup from top to bottom was refreshed with 28 nm parts. AMD is rebranding the low end 40 nm 6000 series products to the 7600 series and below, and this is mainly done to appease OEMs. But these parts are no longer very significant to AMD in terms of pricing and margins, as their APU business is quickly eating into these products in terms of features and performance. This will only get worse as Trinity is released and the 95 to 100 watt models will likely match the performance of the HD 7600 models currently available. The HD 7750 looks to be the new low end for discrete graphics, and AMD has these parts in great supply.
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A prime example of the AMD HD 7970.  In this case the MSI R7970 Lightning.
Unlike their primary graphics competitor, AMD has plenty of 28 nm parts in the market. While the NVIDIA GTX 680 is a faster overall graphics product, NVIDIA made some decisions that have shoehorned that particular chip as a graphics only solution. While it supports GPGPU applications, it is not nearly as good at it as the previous GTX 580 product that preceded it. NVIDIA focused this particular product to be a graphics powerhouse, and an efficient one at that. To achieve this, they did sacrifice the GPGPU portion of it (though they did include a new integrated video encoder that is akin to Intel’s Quick Sync to help make up for this shortfall). AMD on the other hand created a competitively fast graphics solution, but it has much more robust GPGPU capabilities plus their Video Encode Engine. The high end HD 7970 is close to the performance of the GTX 680, but it achieves that by implementing a much wider memory bus and a larger die. The GK-104 which powers the GTX 680 is approximately 294 mm squared while the Tahiti chip which powers the HD 7970 is 365 mm squared. Both of these products are a far cry from the massive 500+ mm squared of the GTX 580.
Unlike NVIDIA, AMD is able to provide the market with more than adequate supplies of 28 nm parts. These range from the low end 7700 series, the impressive and cost effective HD 7800 parts, and finally the high end HD 7900 series. AMD did recently cut their prices for the HD 7900 series of parts, and we have seen a slight decrease in the prices of HD 7800 products. The bright side of this is that NVIDIA still has not released their low end and midrange products based on their new GK-104 architecture. This is an area that AMD is aggressively pursuing, and their efforts have certainly paid off for them.
The dark cloud to this silver lining is that discrete graphics are taking a hit due to higher performing integrated parts from both Intel and AMD. For AMD this means that revenue that would have traditionally come from lower end and midrange discrete parts that would be bundled with a new computer are increasingly being replaced by APU only systems. The discrete graphics market is nowhere near dying though, and there are still plenty of things that need a robust discrete GPU. The biggest need is of course for gaming. Contrary to popular belief, PC gaming is nowhere near dying either. In fact, the past few years have seen something of a resurgence of PC gaming due to content delivery systems like Steam, MMOs like World of Warcraft, and a very healthy and innovative independent developer model which thrives due to the aforementioned content delivery services like Steam.
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The die shot of Trinity, courtesy of Semi-Accurate.  Note how much space is dedicated to the graphics portion.
This week AMD also released their first 28 nm mobile graphics processors. The top end 7970M is based on the desktop HD 7870 (Pitcairn) that is clock and power optimized for mobile use. The rest of the 7000 series uses the Cape Verde chip which powers the desktop HD 7770 and HD 7750. This chip is again clock optimized for mobile use, and the lower end product only supports PCI-E 2.1 connectivity rather than the full 3.0 of the desktop units. This is again due to achieving better power characteristics, as PCI-E 3.0 does eat up more juice than the older 2.1 specification.
Graphics overall held steady even in the face of the Q1 seasonal decline. This is again due to AMD being able to refresh their entire graphics lineup with 28 nm parts. Margins are quite good for AMD due to the higher prices they were able to charge for these products as compared to the older HD 6000 series of parts. When we consider that the HD 6970 was around the same die size as the new HD 7970, but was $250 cheaper at retail, we can see that AMD is doing their best to make some hay while the sun is shining. Though 28 nm production is obviously more expensive than the older 40 nm process the previous generation was based on, the difference in chip prices more than makes up for it. The Cape Verde chips are very small in comparison at 123 mm squared.


April 25, 2012 | 08:07 PM - Posted by tbone (not verified)

good read josh ;)

id like to add the design wins for all next gen consoles will also be a big plus for AMD

looking forward to seeing Trinity in the ultrathin/laptop market, but I have to say Kaveri looks to be pretty cool on the 28nm process, should be a powerhouse!

April 26, 2012 | 10:45 AM - Posted by Josh Walrath

Those design wins are a big plus for AMD, but we have not seen any money from them yet (afaik). Also, production is still a bit in the future, but hopefully the WiiU money will start rolling in for AMD. Q1 though is typically a down time for console royalties, and I think they mentioned that in the conference call.

Vishera will give us a good idea where AMD will sit with a more IPC/performance optimized Bulldozer redesign. The first iteration of Piledriver in Trinity was more about fixing thermal issues and some latency problems in the design (from what I am hearing, and what the performance leaks are showing). Vishera is a much more aggressive redesign that is "supposed" to address more performance issues along with thermals. That particular product will likely have the same IPC characterstics of Kaveri.

There are still a lot of hurdles that AMD has to overcome to get CPU performance up there to reasonable levels against what Intel currently offers.

April 25, 2012 | 08:58 PM - Posted by Meh (not verified)

You paint an overly optimistic picture of AMD.

They have no control over their manufacturing and process anymore.
They have lost investor confidence.
Their entire marketing of Bulldozer and propaganda ahead of it and damage control after launched FAILED.
Parachute payments to execs, shareholder value eroded.

What is exactly that you see, other than regurgitating their propaganda and powerpoint slides?

April 25, 2012 | 10:04 PM - Posted by Josh Walrath

There is a lot of upside to AMD, but as I believe I stated in the article, it still has a lot of hurdles in front of it before we can consider them successful against Intel. Then again, they are the only competitor to Intel and have lasted for some 40 years now.

Intel currently is the only semiconductor manufacturer (other than the memory guys, IBM, and Samsung) that has control over their manufacturing and process. NVIDIA, Qualcomm, Ti (who has closed down most of their fabs), Apple, Motorola, and countless other semi firms that all utilize foundries. I would say that we have definitely seen the shift to a fabless model for the vast majority of companies out there. With the capital behind GF, and the proven track record of TSMC and UMC, I don't see them falling all that much further behind Intel. Intel will always have better margins due to them owning their own fabs, but that does not mean that the other companies will not be able to pull a profit from that model.

Yes, investor confidence is down, and a lot of people have panicked with all of the upper management losses. Then again, look at the last two months and see how many upgrades the stock has received (from sell to hold, and hold to buy). There is a positive trend going there.

Bulldozer is bad. I have not seen any damage control from AMD other than they stopped sending out review products. I see a few basic ads, but it seems more like AMD is turning a blind eye to Bulldozer and focusing instead on Llano, Brazos, and the upcoming Trinity.

Shareholder value eroded... you mean share price going from $2.50 a share 9 months ago up to around $8 a share today? I would say the new management team has stopped the bleeding.

I see a lot of value in AMD's graphics technology. Bobcat is a very good architecture, and much more impressive than Intel's current Atom lineup. Trinity, while not a CPU powerhouse, looks to have fixed the power issues with Bulldozer and integrates the most powerful graphics processor on a CPU. If they can fix the TDP issues of Bulldozer, and improve the IPC further with Vishera (as they are rumored to have done... Vishera is another step above what they have done with Trinity), then we will see more competitive parts in the desktop and server space. Will they surpass Intel in performance? I really doubt it. Will it have good price/performance and a competitive TDP? I think they have a much better chance of pulling that off.

There is a lot of upside with AMD, and I don't feel that I am overly optimistic. Nowhere did I claim that AMD would retake the CPU performance crown, or that they would have a whole portfolio of products that will overturn Intel, but I did state that they have the best integrated GPU in the business from the low end to the midrange. They have very competitive products in the GPU market. Unlike NVIDIA, they are actually delivering a lot of products from top to bottom.

It really does look like AMD is reinvigorated, but again time will tell if this lasts. The foundation is there, they just need to execute and focus on smaller, more meaningful steps in terms of technology and architecture. Gone are the days of massive, sweeping changes in CPU architecture. We will see a lot of refinement in the CPU, but the biggest catalyst for growth will be the GPU. Even Intel sees that, and the jumps we have seen from them in the past 5 years in graphics has been impressive. They still have a lot to learn though, and that is an area that AMD can exploit.

April 26, 2012 | 02:36 AM - Posted by Matt Smith

I can't comment on the desktop space, but AMD's competitiveness in the mobile market has basically vanished.

Bobcat's actual processor performance is on par with Atom. The graphics portion is good for playing 1080p video and some older 3D games - and that's about it. It's obviously better than Atom's IGP in regards to 3D performance, but it's not much better than Atom + Ion.

In mainstream components, AMD's best mobile Fusion APU is well behind Intel HD 4000 in performance. And processor performance is so far behind Intel it's sad.

This is a poor state of affairs. I do not want to see Intel be a monopoly. But what hope is there? AMD could double processor performance tomorrow and still be in trouble.

April 26, 2012 | 03:17 AM - Posted by GettCouped (not verified)

Considering AMD's biggest success last year was in the mobile market with Brazos, and the fact that they have Brazos 2.0 and Trinity (which has a record number of design wins and will offer cheaper ultrabooks), I don't know how you can validate any of your statements

I am concerned about your agenda.

April 26, 2012 | 12:03 PM - Posted by Matt Smith

Rather than being concerned with my agenda, maybe you should spend time reading my reviews?

April 26, 2012 | 12:15 PM - Posted by tbone (not verified)

"AMD's best mobile Fusion APU is well behind Intel HD 4000 in performance."

really link me to a review that shows this? lol

April 26, 2012 | 04:35 AM - Posted by dragosmp (not verified)

To begin with I'd just like to say to say this is a nice overview. Maybe a bit optimistic, but if I didn't want AMD to recover maybe I wouldn't have been too interested in the article anyway. You can just see, actually is quite obvious, that Josh welcomes a possible AMD recovery, and why not? They have been worse, when they launched K7 it was laughable to spend more than 120$ for an AMD processor as they simply couldn't touch PIIs' performance. At the time they only had a desktop Celeron competitor which pretty much is the case now with Llano and Bulldozer. Now they're not quite that low as they have a server CPU and a mild presence in laptops.

About Brazos vs Atom+Ion, I'm not so sure. From a performance standpoint I agree that Brazos offers little over Atom+Ion, but Atom is limited by Intel @7-10 inch laptops, while my feeling is that most Brazos CPUs sell in 300-400 13-15" laptops (have a friend that is perfectly happy with a 15" Tosh based on E-450 & Momentus XT). So while Brazos doesn't bring much technical advantage, it is positioned differently in the market and this makes it more competitive than it would otherwise be.

Llano vs HD4000 - the only preview I've seen is the one @anandtech and I'm looking forward for your view Matt on an IB laptop. In that review the HD4000 is really competitive with Llano's iGPU, not to mention IB's CPU cores run circles around the K8 era Llano. However the HD4000 is only competitive, not really superior to the HD60something in Llano. And this is before considering drivers - I am not convinced at all that Intel provides decent graphics quality and I don't mean Medium/High settings. I mean something like the Intel IGP rendering a blue surface red, or jaggies/tears and pixels running about on the screen. I would love to see a detailed review of the HD4000 as a graphics processor with FPS, but also checking weather the games are properly rendered. For one I was hoping to game on the HD3000, but the drivers were a letdown (or buggy GPU?), now I wonder if the HD4000 is a 3DMark rallycar or a real competitor to a real GPU like Llano's.

April 26, 2012 | 09:42 AM - Posted by Josh Walrath

Some extra fuel for the fire:

April 26, 2012 | 12:06 PM - Posted by Tbone (not verified)

I believe Matt is smoking crack....

Intel HD 4000 doesnt beat llano igp

And Brazod ripped apart whatever Intel atom had in market share.

April 26, 2012 | 09:50 AM - Posted by Anonymous (not verified)

cant add much except why dump the 28nm brazos?

have long thought it would be a killer

I see little evidence that more than 2 cores achieves much

brazos would be my first choice apu for 28nm - not dumping it
A huge step. 40nm >28nm - 30% better power & heat in theory

thats 13~ watts from current 18

hard to believe intel/ion would have an answer - it would be a slam dunk for amd in all day ultra mobile or light devices

a 15" thin, light brazos 28nm would sure tempt me

one theory is they feel bad after all those design wins & then not being able to supply the oems who comitted to it - give them a chance to recoup for a while.

another guess is they couldnt resist a few tweaks to brazos using the easier current node & then doing the step change. Unusual to keep u roadmap secret, but it often makes sense.

April 26, 2012 | 10:27 AM - Posted by Josh Walrath

My guess is that Rory took a look at all the current projects, looked at their manpower and budget, and cut the ones he thought made the least amount of sense. Quad core Brazos, while nice in theory, really does not have as much of a market as perhaps a dual core. When going dual core Brazos on 28 nm, I wonder if they were just looking at a die size that was almost too small for the number of pads needed? Could be some other issues there, such as the theoretical TDP was not going to be as low as they were hoping, and it made more sense to revise/optimize the 40 nm product? A good question though, and one we can hopefully get an answer to one day.

Also they are probably still constrained with TSMC's 28 nm process. Would it make more sense to order Brazos wafers and potentially lose out on higher margin products in the GPU space? I'm betting the long and short of it is that AMD felt they could not meet 28 nm Brazos demand with the supply of wafers they had to deal with, all the while cutting down on the GPU supply... which would be bad considering that NVIDIA is even more supply constrained and AMD wants to take advantage of that.

April 26, 2012 | 09:53 AM - Posted by Anonymous (not verified)

No mention of drivers or chipsets

r not amd chipsets more integrated? & if not faster, more generous with port options?


April 26, 2012 | 10:52 AM - Posted by Josh Walrath

Drivers certainly are an advantage for AMD. Intel's graphics drivers are nothing to write home about. Now, compare AMD's recent attempts at drivers vs. NVIDIA, and we have some issues. AMD still has a lot of room for improvement there.

AMD chipsets do give more SATA 6G ports and they have integrated USB 3.0 for the FM1 platform since last year. Too bad they never integrated USB 3.0 for AM3+, and it certainly seems like the 1090FX chipset will never see the light of day. So no PCI-E 3.0 for AM3+ anytime soon, or USB 3.0. AMD is sort of shafting those individuals who desire that particular platform. Maybe if Vishera comes out better than expected they will update the platform, but I think that particular project is dead and buried.

April 28, 2012 | 03:03 AM - Posted by Anonymous (not verified)

ta for the replies josh

as i suspected

I hear reasonably priced intel boards are niggardly w/ ports, which can be an expensive hassle down the road

amds integration should yield benefits - i doubt many discrete chipsets are 32nm - let alone on die - esp usb3 - it handles some serious traffic

seems to me, in the am3+ market, they need all the space they can get to make the cpu keep up w/ intel (bulldozer a bit of a dud, but I hear is making some traction in servers that like lotsa cores cheap - which is some big servers)


May 12, 2012 | 04:05 AM - Posted by Anonymous (not an intel troll) (not verified)

I'm REALLY not an Intel troll (and I most certainly don't have Steve jobs posters in my bedroom.)

AMD is a useless company. Bulldozer is epic fail. Trinity is going to suck anyway. llano is bad.
EVERYONE KNOWS ALL THIS. proof not. needed. Because the truth is indisputable.

Anyway, anyone who buys cheap junk (anything without fruit logos) does not deserve to live. huff ...

Just an objective and broad-minded observation.

Yours sincerely
Mr.Not an Intel troll

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