AMD plans low-end GPU sacrifice for Fusion

AMD's interim chief exec Thomas Seifert has confirmed that his company will be going all-out with its Fusion APU vision, even if it means the death of its low-end discrete graphics business.

During the company's quarterly earnings call with analysts and investors late last week, Seifert spent much of his time talking about Fusion. Describing the push towards 'accelerated processing units' with powerful in-built GPU capabilities as "the industry's biggest architectural change since the invention of the microprocessor," he claimed customer adoption of the platform was strong with Brazos representing "one of our fastest driving processors."

With Trinity, the company's next-generation mainstream notebook GPU which was unveiled at Computex Taipei earlier this year, due next year and promising improved performance in just half the power envelope of the existing Llano chips, Fusion is certainly looking strong for the company. That strength, however, could end up costing another section of the company big: the GPU maker previously known as ATI.

When AMD bought ATI for its graphics know-how, it was keen for it to keep producing dedicated GPUs. Even now, AMD makes a series of consumer-grade cards under the Radeon brand for a variety of budgets: £20 bottom-end passively-cooled cards can be bought alongside £500 high-end gaming powerhouses with complex active cooling systems.

The low-end discrete market is at threat, however. That threat is Fusion, which promises to provide the kind of mid-range graphical horsepower required to play most games at a reasonable pace without the need to invest in a separate graphics card.

It's inevitable that Fusion, if successful, will eat away at this profitable low-end market for older and slower GPUs, but that's not something that Seifert is worrying about. "In the long run," he told investors, "parts of this business will be cannibalised and the low-end discrete GPUs will be replaced with Fusion-type products.

"This is all goodness for us," Seifert claimed, "because it replaces low-cost margin revenue with high-gross margin revenue."

With AMD admitting that it's willing to sacrifice its own low-end GPU business to ensure the success of Fusion, there's one other company that should be getting concerned: rival GPU maker Nvidia, which will likely see its own low-end GPU market shrink should Fusion gain traction.