AMD Restructuring
The most interesting news from last week’s Mobile World Congress was not a new smartwatch, or flagship handset, but rather a rumor that MediaTek (TPE: 2454) and AMD (NASDAQ: AMD) were on the verge of a licensing deal that would put Radeon GPUs into MediaTek’s SoCs.
While this deal is far from confirmed, on paper it’s a logical partnership that would allow both parties to score wins in respective spaces they have struggled in.
For MediaTek, the Radeon GPU technology would allow it to lessen its dependence on ARM’s (LON: ARM) Mali GPU and Imagination Technologies’ (LON: IMG) PowerVR GPU. MediaTek uses both for its GPU lineup: Mali on the low-end and PowerVR on the high-end. This would allow MediaTek to differentiate itself from other users of Mali, and would also free it from licensing GPU technology from Imagination — a company that it may be soon competing with in the SoC space if it starts bringing in some mobile hardware wins from MIPS.
And for AMD this is a chance to finally break into the mobile space. For a number of reasons, especially Intel’s (NASDAQ: INTC) aggressive subsidies of its chips in the mobile space, AMD could not compete in mobile. Eventually, last November, it said that it had “given up” on tablets having long backed out of the smartphone race.
What about Skybridge?
The going assumption — and it might prove to be correct — is that MediaTek would be the majority partner in this deal as it has the proven experience in the mobile space. However, considering AMD’s ambitious Skybridge plan — pairing ARM and AMD on the same die — it might be that this is a deal of equals.
Originally Skybridge was supposed to be about x86 and ARM on the same die, but this could be the evolution of the project. The big takeaway from the project would be successful interfacing of ARM and GCN, and the use of low-power Carrizo GPUs.
Remember that there is already significant cooperation between AMD and MediaTek on the Heterogeneous Software Alliance, so familiarity between teams exists.
AMD is scheduled to report its earnings in mid-April, while MediaTek has April 28 booked to report. If this deal has legs, an announcement would likely come around that time.
