Advanced Micro Devices
) recently signed a licensing agreement with
ARM Holdings plc
) that will enable it to use ARM architecture to manufacture
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The chipmaker currently relies on
) x86 architecture to design most of its chips, but this year
will see some chips based on standard ARM cores as well.
The crux of this agreement is to blend both x86 and ARM designs
to create products that are significantly distinct from what the
other sellers offer. Therefore, per the license, Advanced Micro
will employ ARMS' 64-bit technology for creating customized
high-performance chips for markets with good growth potential.
Moreover, with the current move, Advanced Micro intends to
venture into markets outside the sluggish personal computer
business. PC shipments have declined for eight consecutive
quarters primarily due to a shift in demand towards tablets and
smartphones. Thus, Advanced Micro plans to generate half of its
returns from emerging, fast-growing non-PC businesses including
game consoles and microservers by the end of 2015.
ARM Holdings is a UK-based semiconductor intellectual property
(IP) provider. ARM engages in the designing and licensing of IP
instead of developing and vending semiconductor chips. ARM's
power-efficient chip architecture is broadly used in smartphones,
tablets and servers. Technology companies like
), Samsung and Applied Micro use ARM technology to design their
The technology amalgamation for the creation of chips marks the
beginning of Advanced Micro's "ambidextrous computing" roadmap.
Ambidextrous computing is basically the roadmap of future
computing solutions that connect the finest characteristics of
both the x86 and ARM ecosystems. Project SkyBridge
(pin-compatible x86 and ARM processors) and K12 (AMD's own design
based on ARM architecture) are the first two products in the
category, with expected launches in 2015 and 2016, respectively.
Furthermore, Advanced Micro also aims to spread its foothold in
the chip market by creating chips for manufacturing equipment and
Advanced Micro currently holds a Zacks Rank #3 (Hold).