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AMD's CEO Reveals Interest In Tablets

During AMD's third quarter earnings call on Thursday, AMD CEO Dick Meyer spoke at length about the problems and opportunities regarding the rise of tablets -- and AMD's plans to produce chips for them.

Like its chief rival Intel, Advanced Micro Devices (AMD) is eyeing tablets, but don't expect the world's second largest chip maker to jump into the market any time soon.

Dirk Meyer, CEO of Sunnyvale, Calif.-based AMD said Thursday that the chip maker will eventually offer a reference design geared toward the tablet market. However, Meyer gave no specific timetable and suggested tablets were not high on AMD's priority list compared to the upcoming Liano and Bulldozer reference designs for notebooks and netbooks.

"I expect we're going to see tablets in various form factors and thicknesses over time. From everything we understand today, it's still a pretty new market," Meyer said during AMD's third quarter earnings call. "Clearly, the last quarter or two the tablet has represented a disruption in the notebook market."

Responding to a question about tablet cannibalization and its impact on AMD's business, Meyer characterized the conversation by saying, "If you ask five people you'll get five different answers as to what degree there has been cannibalization by tablets of either Netbooks or notebooks. I personally think the answer is both."

Meyer did not dismiss apprehension toward the popularity of the tablet from the perspective of traditional PCs. "There's no question that the tablet phenomenon has been a source of volatility relative to any of our customer's ability to predict the market. But we're still looking at pretty healthy notebook growth," he said.

Unlike Intel however, AMD has less to worry about as it does not control as much of the traditional computing market. Meyer acknowledged that AMD still has ground to gain in the notebook and netbook markets, where he said AMD could do much better than its current 14 percent of market share.

Next: Meyer Says AMD Too Small In Notebooks


Rather than launch a major offensive in the tablet market, AMD said it's more interested in building up its netbook and notebook business with new chips such as the company's forthcoming Ontario netbook processor, which is scheduled to ship sometime in the fourth quarter.

"Frankly, we're still so small in the notebook market that...it doesn't make sense for us to turn R&D dollar spending toward the tablet market yet. We'll start doing that when the market is big enough," Meyer said. "In the long term, we believe it's accretive to the market opportunities of AMD."

Meyer's extensive response came after AMD's announcement that demand for its notebook graphics units was down, contributing to an overall loss in market share.

It also follows Intel CEO Paul Otellini's comments during Intel's own Q3 earnings call on Tuesday downplaying the impact of tablet cannibalization on the traditional PC space where Intel has 90 percent market share.

Intel is developing its Oak Trail Atom processor designed to power tablets. Meanwhile, Apple's iPad continues to lead all tablets in sales by a large margin. The iPad runs on Apple's own A4 processor, leaving AMD out of the picture for the moment despite its interest in the market.

Next: What Would Distingusih AMD's Tablet Chips?


Eventually, AMD intends to concentrate on the new market more as the demand for tablets grows to the point of justifying a significant investment.

"We'll show up with a differentiated offering with great graphics and video technology," said Meyer.

"A tablet would optimally have power dissipation of two to three watts, which is a little more than half of what a fanless Netbook would tolerate," Meyer explained. "I expect customers will take components designed with Netbooks in mind and put them in tablets. And I think you'll see AMD solutions in tablets in the next couple of years for that reason."

It seems that while a booming new market is available to AMD and other semiconductor firms, tough economic times and the goal of growing within its established niche is keeping AMD from approaching tablets too aggressively.

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