AMD fast on Fusion, but hesitant with tablets

AMD's first Fusion chips will appear in netbooks and low-end laptops

Advanced Micro Devices is ahead of schedule with its upcoming Fusion chips, which will appear first in netbooks and low-end laptops early next year, but not in tablets, the company said on Thursday.

Interest from customers pushed AMD to accelerate the development of a low-power Fusion chip code-named Ontario, which the company will start shipping for revenue in the fourth quarter, AMD CEO Dirk Meyer said during a conference call to discuss the company's earnings.

"The timeline for Ontario has changed dramatically," Meyer said.

The company showed in June the first chips based on the Fusion architecture, which combines CPU and GPU (graphics processing unit) cores in the same chip. The Ontario Fusion chip has two x86 processor cores and a DirectX 11 GPU chip.

Ontario should make AMD more competitive in areas such as netbooks, which are currently dominated by Intel. The chip will bring improved graphics to devices that have smaller screens and consume little power, Meyer said.

"It'll position well against Atom," he said.

Intel's Atom chips for netbooks include integrated graphics chips but still have been criticized for poor graphics performance. An integrated DirectX 11-capable processor should allow playback of full 1080p video on small screens.

Ontario won't be targeted at tablets for now, however, Meyer said. The tablet market is not mature and the company wants to focus on more established areas, he said. Executives hinted, however, that the chip could eventually reach tablets when the market starts to ripen.

Intel already makes Atom chips for tablets, and Nvidia offers the Tegra 2 for tablets. Both see tablets as a new way to generate revenue. Apple is the major supplier of tablets with its iPad, which uses an internally developed chip with an Arm design.

AMD is also developing a Fusion chip code-named Llano for consumer laptops and desktops. The company has not changed the timing for Llano's release, which will be sometime next year, AMD spokesman Drew Prairie said via e-mail. He did not provide a specific release date.

Ontario will be manufactured by Taiwan Semiconductor Manufacturing Co. using a 40-nanometer manufacturing process. It will not be made by GlobalFoundries, AMD's manufacturing spin-off in which it holds a stake.

"As part of the new cross-license agreement we reached with Intel late last year ... there are no limitations on where we can manufacture our products," Prairie wrote.

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