With CPU sales down 30 percent, it would be easy to dismiss 2013 as yet another annus horribilus for AMD. But the next few years present some interesting opportunities for the chipmaker’s floundering CPU division. In simplest terms poor sales might be bad news, but in AMD’s case the situation is far more complicated. Computer sales have been down across the board for a number of reasons: The economic climate obviously has had an impact, developments with ARM processors have seen people doing more with less and, dare I say it, there is diminished need for high-performance CPUs. Processing resources are being massively underutilized and have been for a long time. Once, people would buy a new motherboard so that they’d be able to install the latest and greatest CPU, but these days it seems to be the other way around. Most people are looking for functional and efficiency-related improvements more than they want incremental performance gains. While integrated graphics and power efficiency have been an afterthought for most consumers, we can expect them to play a major role in purchasing decisions for the next generation of processors.

The New Processor Line

After years in the doldrums, AMD’s work on its accelerated processing unit (CPU + GPU) line isn’t just significant, it’s critical. The upcoming AMD APU HSA hUMA line has enormous potential. What makes the most difference is the last two acronyms in that long string: HSA – for heterogeneous system access  -- and hUMA – for heterogeneous uniform memory access. The new chips’ graphics and processing sections are able to share memory. In terms of performance and system architecture, that’s powerful. If the PlayStation 4 is anything to go by, shared memory may not cut the overall build cost because it’s likely to mean a switch to DDR5, which costs quite a bit more than DDR3. However, it will mean being able to do more with a hardware footprint that’s significantly smaller and on a platform that requires less energy. That should translate into lighter devices with longer battery life. There are also performance advantages to be gained by running everything from one chip. Offloading tasks to a separate GPU with its own memory takes time. With a high-performance system, the advantage of a discreet GPU more than makes up for that. However, on mobile devices the difference is likely to be a lot more noticeable. At this stage it’s pure speculation, but with Sony already signed up for a custom-built HAS hUMA chip, it would seem fair to assume that AMD is ready to deliver something special.

New Opportunities

While demand for its products may have diminished, all is not lost for AMD. The third quarter of 2013 will likely give us a very clear indication of where the company is headed. Having CPUs and/or GPUs in the two major gaming consoles could be very big news – as long as the next-generation gaming platforms from Microsoft and Sony sell. Given that sales of both companies’ current-generation consoles were tepid at best, that’s not a certainty by any stretch of the imagination. The marketing efforts of both companies will be enormously important to AMD this year. What is significant about both the Xbox One and the PlayStation 4 is that they’ll be the first consoles that have more architecture in common with personal computers than they do with preceding consoles. Whether or not that translates into greater functionally remains to be seen, but if it does, then sales are bound to get a boost. In times of economic uncertainty, parents are much more likely to buy their kids a console if it can do more than just play games. As of 2012, the average gamer was 30 years old, down seven years from 2011. That suggests there have been significant gains in market penetration at the younger end of the age spectrum – those who are likely to own fewer electronic devices and have greater desire for expanded functionality. If Sony and Microsoft are able to hit big with that segment, the flow-on effect at AMD could be huge. Another thing: While the console market represents a tremendous opportunity for AMD, the AMD APU HSA hUMA makes the company competitive in an area where it’s been struggling: mobile devices. Taking the GPU out of the equation should translate into tangible improvements in battery life in systems that traditionally used a discreet GPU, and a massive performance boost for systems that did not. At present it’s not really clear what this will mean for performance laptops, but I suspect that manufacturers will still opt to install a discreet GPU. On the other hand, mid-range laptops and ultraportables would be perfect for the technology. So would tablets.

The Way Forward

AMD seems to be doing everything right, but Intel is unlikely to take the challenge lying down. It claims that the integrated graphics of its next-generation processors will be at least twice as powerful as that of its previous generation. It remains to be seen how AMD’s offerings stack up compared to Intel’s next generation in terms of price and performance. Make no mistake: AMD finding a home for the APU in consoles is a coup. Still, it will take both strong console sales and follow-up success in the laptop and tablet space to undo the damage of the last few years.