AMD Strengthens Its Security Solutions With ARM Partnership

With a growing need of consumers to have a secure access to their content and worry-free online transactions, AMD (NYSE:AMD) expanded the security ecosystem for its future product offerings by collaborating with ARM Holdings (LSE:ARM.L). The partnership will see ARM’s TrustZone technology being extended into AMD processors, enabling a secure computing experience for its business customers and other consumers.

ARM TrustZone technology represents an industry-standard approach to security that spans billions of internet connected mobile devices, tablets, PCs and servers. It is a system wide approach to security on high performance computing (HPC) platforms for a variety of applications such as secure payment, digital rights management (DRM), enterprises and other web-based services.

The partnership will see a future chip that aligns both AMD x86 and ARM-based hardware to build an industry standard security solution spanning multiple processor architectures for various devices and operating systems. A select number of AMD’s Accelerated Processing Units (APUs), the new lineup of products that combine the capabilities of a CPU and graphics processors on a single chip, will feature TrustZone security features in 2013 and the company intends to expand the technology further across its product portfolio in 2014.

Intel (NASDAQ:INTC) and AMD have been the two major manufactures of x86 processors that face competition from devices based on the ARM architecture. However, AMD’s confirmation of using an ARM license to develop a platform security processor leaves its arch rival Intel as the only x86 player for PC and mobile devices processors. Intel does manufacture non x86 processors for some high-end servers and HPC systems but does not adopt the ARM architecture at all. ^[1]

The fast growing smartphone and tablet market is already dominated by ARM-based players such as Qualcomm (NASDAQ:QCOM) and Nvidia (NASDAQ:NVDA); and the expected entry of other ARM-based players in the PC market impose a threat on existing companies such as Intel and AMD. We feel that AMD’s collaboration with ARM to build a platform security processor with the latter’s Cortex A-5 TrustZone technology could work well for the company to maintain its foothold in the market.

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Our price estimate of $8.39 for AMD is at a premium of above 40% to the current market price.

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1. AMD, ARM Partner on Future TrustZone Security Platform, PC Mag, June 13, 2012 [↩]