Given the rapid expansion in the embedded processor market, AMD (NYSE:AMD) has formed a new embedded solution group that will operate as a separate unit within the company’s global business units. Being aware of the growing opportunity for accelerated processing units (APUs) in embedded applications and form factors, AMD recently launched a new low-power embedded G-series APU, further expanding its embedded product portfolio.
Embedded processing contributes close to 4% to our current price estimate of $8.39 for AMD. We believe the company is doing a good job to stay on top of the market, and we expect it to register y-o-y growth in this division.
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AMD’s Embedded G-Series APUs To Power Next-Generation Applications
AMD’s embedded APUs, discrete GPUs and Opteron processors are designed to address a gamut of high-performance, power intensive applications. The company claims that its G-T16R APU, the latest entry to the embedded G-Series processor family, has a critical balance of performance, power-efficiency and cost sensitiveness, further enhancing its current offerings in the division. [1]
The G-T16R APU is designed to help reduce product development and life cycle costs through a common design serving multiple product configurations. Its availability at accessible price points make it useful for cost-sensitive embedded applications.
With power consumption of only 2.3 watt on average, the new processor targets low-power, cost-sensitive embedded designs that require a combination of x86 compatibility and graphics.
The low power APU could be used to provide better graphics for a broad range of next generation applications such as specialty tablet devices used in hospitals and stores, point-of-sales order entry systems, solar-powered traffic control devices, transportation market, etc.
Compared to PCs and tablets, embedded products are known to have a longer life as the processors are not required to be upgraded as quickly. Along with the launch of its new APU processors, AMD also extended the availability of its entire embedded G-series processor family through 2017. [2]
Constant Revenue Contribution By Embedded Processors Division
VDC Research group estimates the embedded processor market to reach $6 billion this year and forecasts it to register at an annual growth rate of 12-15% through 2014. [3]
Historically, embedded processors have contributed around 3% to AMD’s overall revenue and as the market witnesses y-o-y growth, we expect the contribution from this division to remain constant throughout our forecast period.
Our price estimate of $8.39 for AMD is at a premium of above 50% to the current market price.
Understand How a Company’s Products Impact its Stock Price at Trefis
- AMD Introduces New Low-Power AMD Embedded G-Series APU and Extends Platform Availability Through 2017, AMD Press Release, June 25, 2012 [↩]
- AMD Chips May Add Visual Appeal To Specialty Tablets, CIO, June 25, 2012 [↩]
- AMD Strengthens Commitment to Embedded Solutions With Appointment of Arun Iyengar as General Manager of Newly-Formed Embedded Solution Group, Sys-Con Media, June 11, 2012 [↩]
