Yahoo Finance AMD, Symmetry Sign Agreement
Advanced Micro Devices Inc. (AMD) signed a global distribution agreement with Symmetry Electronics, a distribution leader in the embedded market. According to the agreement, Symmetry Electronics will promote, sell and support the full range of AMD embedded products, including the new entrant AMD Embedded R-Series accelerated processing units (APUs).
Founded in 1998, Symmetry Electronics is an ISO 9001:2000 certified company. Headquartered in California, it specializes in distribution, value added services to semiconductors, and embedded modules (particularly wireless and video products). The company is now focusing on wireless, video-audio, memory-storage and power products.
The new agreement with Symmetry Electronics should open up new markets for AMD’s embedded APUs and graphics processors and also boost its customer base. Both the companies are trying to provide high-performance products that consume lower power and support embedded life cycles.
Moreover, Symmetry Electronics’ leadership in distributing embedded products will provide the requisite strength in marketing and distribution of AMD’s newest line of Embedded G-Series and R-Series APUs.
The embedded system processors are quite a lucrative market. AMD’s G-Series APUs compete against products from Intel Corp. (INTC) and Mips Technologies Inc. (MIPS). Its G-Series APUs are used in various formats such as set-top boxes, gaming systems, information kiosks and point-of-sale systems among others. Thus, AMD has been gaining a strong presence in the embedded market.
Over the past decade, AMD has been active in acquiring companies that could strengthen its position in embedded markets. In 2002, AMD acquired Alchemy Semiconductor for its Alchemy line of MIPS processors. Again in 2003, it purchased the Geode business from National Semiconductor to strengthen its existing line of embedded x86 processor products.
We are positive about AMD’s endeavor to deliver innovative products and technologies to its customers. However, Intel is a very strong competitor with significant resources and technological prowess. AMD on the other hand is struggling to hold its own. It is even attempting a sale and lease back of its property to unlock much-needed cash.
AMD’s revenues in the third quarter came in at $1.27 billion, down 10.2% sequentially and 24.9% year over year, more or less in line with its revised guidance of a 10% sequential decline (at the mid-point). Revenues were also in line with consensus expectations of $1.28 billion. The Graphics business generated 27% of its sales and was down 6.8% sequentially and 15.1% from the year-ago quarter.
AMD’s shares carry a Zacks Rank #5 (Strong Sell). Intel and Mips both carry a Zacks Rank #3 (Hold).
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