Devinder Kumar, a Senior Vice President and the Chief Financial Officer at AMD, recently sat down for a question and answer session and talked about the state of the company. Kumar was asked about the sales forecast of Xbox One and PlayStation 4 (AMD tech is used in both), and after giving some predictions he announced that AMD had secured two more big “wins” in the “semi-custom business.”
Kumar explained that the company has secured contracts for a semi-custom x86 chip and an ARM chip to be used in products that will be introduced in 2016. Kumar could not give specific details as that has to be left up to the companies that the chips are being designed for, but he said that “at least one will be on gaming.”
The other thing I’ll mention in the semi-custom business which you probably picked up in the announcement that we had in October earnings call is we’ve been having a lot of interest in the semi-custom business, the semi-custom business is very unique, whereby it takes AMD’s core IP, we use it across market segments, across customers, across products, customer interest has been high and we projected earlier this year that we would have at least one to two semi-custom design wins and I’m pleased to report that we have those design wins, the work to design the products that has already started, the contract assigned and those parts get introduced in 2016.
So the 2016 semi-custom design wins will have parts 186 one ARM goes beyond gaming. And by the way it is a $1 billion revenue opportunity over three-year period starting sometime in 2016. So we’re excited about that too, because it takes us from a revenue standpoint beyond the two game consoles that we have with Microsoft and Sony. And then for good measure, we provide the technology for Nintendo Wii U where we earn a royalty from an overall standpoint from those companies.
The design wins are interesting because the funding, the R&D dollars for customizing the parts for the products to our customers is precisely pre-funded by the customer and like I said the workload is started and we are spending the money and the resources and the work to go ahead and design the parts to be introduced sometime in 2016.
I’m not going to give too much detail. I’ll say that one is x86 and one is ARM, and atleast one will be on gaming, right. But that’s about as much as you going to get out me today, because the customers from the standpoint to be fair to them. It is their product. They launch it. They announce it and then just like the game console or the parts you find out that its AMD’s APU that’s been used in those products.
— Devinder Kumar
Given how vague Kumar’s comments are, it’s hard to say just what AMD is working on. It seems unlikely that Sony or Microsoft would be contracting for their next consoles, so Nintendo is the most likely of the three major console makers. It’s also possible that another company, such as Amazon, could be designing their own console. In any case, it sounds like we’ll have to wait until 2016 for the official announcement.
Source: Seeking Alpha