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Posted by Richard Fichera on November 1, 2012
Earlier this week, in conjunction with ARM Holdings plc’s announcement of the upcoming Cortex A53 and A57, full 64-bit CPU implementations based on the ARM V8 specification, AMD also announced that it would be designing and selling SOC (System On a Chip) products based on this technology in 2014, roughly coinciding with availability of 64-bit parts from ARM and other partners.
This is a major event in the ARM ecosystem. AMD, while much smaller than Intel, is still a multi-billion-dollar enterprise, and for the second largest vendor of x86 chips to also throw its hat into the ARM ecosystem and potentially compete with its own mainstream server and desktop CPU business is an aggressive move on the part of AMD management that carries some risk and much potential advantage.
Reduced to its essentials, what AMD announced (and in some cases hinted at):
The primary risk is revenue cannibalization and margins: It will be hard to get the same gross profit or margins on ARM-based products due to the highly competitive nature of the market. Pricing will not be protected by an Intel umbrella, but rather will be a competitive, in the true sense, market price that will be forced to respond to other ARM vendors' pricing.
Balanced against this risk are strong potential benefits for AMD, which has never come close to regaining the momentum it had in the server segment since the glory days of beating Intel to market with HyperTransport, 64-bit x86 extensions, and dual-core CPUs. Among the obvious benefits are:
Who gets hurt? This announcement obviously pressures early movers like Calxeda and means that any current ARM system partners such as Dell and HP must re-evaluate their strategies in light of AMD's plans. Companies like Calxeda are not doomed, and much depends on how good AMD’s ARM SOCs are, but the entrance of an established global competitor into their niche segment cannot be a cause for celebration.
Server buyers will have to wait until sometime in 2013 to get any clarification of AMD’s plans for what is positioned as a 2014 launch of full 64-bit ARM servers. In the meantime, both system vendors and users can continue to assess ARM technology with the current Cortex A9 and possible upcoming A15 system offerings, since the future 64-bit products are expected to be fully software compatible with current 32-bit products.
All in all, for server buyers, as Mr. Rogers might say, “It’s going to be a good day in the neighborhood,” with more choices for massive energy-efficient data centers emerging over the next 18 to 24 months.
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