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A new AMD licensing deal could create more x86 rivals for Intel

Agam Shah | April 22, 2016
AMD is licensing its server chip technology to a Chinese joint venture and may later license its PC chip designs.

Things just a lot more interesting in the x86 server market.

AMD has announced a plan to license the design of its top-of-the-line server processor to a newly formed Chinese company, creating a brand-new rival for Intel.

AMD is licensing its x86 processor and system-on-chip technology to a company called THATIC (Tianjin Haiguang Advanced Technology Investment Co. Ltd.), a joint venture between AMD and a consortium of public and private Chinese companies.

AMD is providing all the technology needed for THATIC to make a server chip, including the CPUs, interconnects and controllers. THATIC will be able to make variants of the x86 chips for different types of servers.

Most PCs and servers are based on x86 chips, but licensing the chip technology to other companies is rare, even if that company is a joint venture, said Jim McGregor, principal analyst at Tirias Research.

AMD is much smaller than Intel, and licensing offers it an easy way to expand the installed base of AMD technology. The resource-strapped company will also generate licensing revenue in the process, McGregor said.

AMD is taking every step it can to be competitive with Intel, and there's a good chance it will ultimately license its PC chip designs, McGregor said.

The deal is a sign that AMD is looking to monetize its large portfolio of intellectual property, said Patrick Moorhead, president and principal analyst at Moor Insights and Strategy.

"I would expect more deals like this in areas AMD can’t reach with their platforms or resources. I would expect arrangements not just for their CPU technology but also their GPU technology," Moorhead said in an email.

Intel won't be happy to hear this news. Suddenly, the long-running two-horse x86 race could include more players, which would hurt Intel more than AMD. Intel dominates the server and PC markets, and licensees could flood AMD's x86 chip variants into more servers and possibly even PCs.

Intel has been holding on tight to its x86 designs and hasn't licensed its chip technology yet. The company makes its own chips, with either sales or design partnerships with companies like RockChip in China. Intel hasn't licensed its x86 architecture to its engineering partners.

"Intel will give you a black box, but not the keys to the kingdom," McGregor said.

AMD will probably license server chip designs based on its upcoming Zen architecture. Zen is supposed to be AMD's best CPU in more than a decade, with performance gains of up to 40 percent per clock cycle. AMD also hopes Zen will make it a true competitor against Intel.

AMD will continue to sell its homegrown server chips. The first Zen server chips will be in servers early next year.

 

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