Nanotech - The Circuits Blog

Updated at 6:15 p.m. PST with AMD statement about a letter it received from Intel on January 20.

Advanced Micro Devices on Thursday reported a bigger-than-expected net loss of $1.4 billion for the fourth quarter of 2008. This is the chipmaker's ninth consecutive quarterly loss.

AMD also disclosed that it received a letter from Intel regarding the two companies' patent cross-licensing agreement.

The $1.42 billion loss, or $2.34 per share, was below the $1.77 billion loss, or $3.06 per share, reported a year ago but worse than Wall Street analysts had expected

Excluding one-time charges, AMD lost 69 cents per share, larger than the loss of 54 cents per share predicted by analysts.

AMD, like Intel and TSMC, has seen a precipitous drop in orders from customers.

Fourth-quarter 2008 revenue came in at $1.162 billion, down 35 percent compared to the third quarter of 2008 and 33 percent compared with the fourth quarter of 2007. Fourth-quarter 2008 revenue was down 28 percent sequentially, excluding third-quarter 2008 process technology license revenue of $191 million, AMD said.

For the year ended December 27, 2008, AMD had revenue of $5.808 billion, while the fiscal 2008 net loss was $3.098 billion. This compares with revenue of $5.858 billion and a net loss of $3.379 billion for fiscal 2007.

AMD provided little future guidance. "In light of the current macroeconomic conditions, very limited visibility and continued corrections in the supply chain, AMD expects first quarter 2009 revenue to decrease from the fourth quarter 2008."

Chief financial officer Bob Rivet said during the earnings conference call Thursday that "factory utilization will be crummy, considering the demand environment." This sentiment echoes what Intel said last week about abysmal factory utilization due to sinking demand from customers. And clear evidence of this trend was provided Wednesday when Intel said it would close five plants.

AMD had warned in December that fourth-quarter revenue would be significantly lower than previously expected.

AMD's stock has been trading around $2 and has lost more than 50 percent of its value since the end of September when the stock was trading above $5.

AMD receives letter from Intel

AMD also disclosed on Thrusday in an 8-K filing with the Securities and Exchange Commission that it received a letter from Intel relating to the patent cross license agreement between the two companies. The agreement covers the x86 instruction set architecture that the companies use in their processors.

An excerpt from the AMD statement in the 8-K filing is as follows: "On January 20, 2009 the Company received a letter from Intel Corporation relating to the 1976 and 2001 Patent Cross License Agreement between the Company and Intel (the 'Cross-Licenses'). In the letter, Intel requests a meeting with the Company to discuss whether The Foundry Company qualifies as a licensed 'Subsidiary' under the Cross-Licenses, whether the creation of The Foundry Company is a breach of the provisions of one of the Cross-Licenses and whether either the transaction establishing The Foundry Company or the Company's 2006 acquisition of ATI constituted a change of control of the Company under the Cross-Licenses."

The Foundry Company is the chip manufacturing operation that AMD is in the process of spinning off.

AMD said it "strongly believes that The Foundry Company qualifies as a 'Subsidiary' under the Cross-Licenses, that the creation of The Foundry Company is not a breach of the provisions of either of the Cross-Licenses and that neither the transaction establishing The Foundry Company nor the Company's acquisition of ATI constituted a change of control of the Company under the Cross-Licenses."

Update on October 9 at 9:00 a.m. with additional comments from Intel and AMD.

Advanced Micro Device's new manufacturing venture may come with some old baggage.

After AMD announced on Tuesday that it would spin off its manufacturing assets to a new company partially owned by the Abu Dhabi government, Intel was quick to warn AMD about patent and cross-licensing concerns.

AMD will own part of the new manufacturing entity, for the time being to be called The Foundry Company, while Advanced Technology Investment Co. (ATIC) will own the rest (55.6 percent) and have equal voting rights with AMD in The Foundry Company. The total investment is expected to come to approximately $8 billion.

Intel-AMD disputes are certainly not new. AMD sued Intel in 2005 alleging antitrust violations. But this time Intel has AMD in its sights.

At the moment, Intel is simply expressing concern about the deal, per the Patent Cross License Agreement between the two companies. (The two chipmakers have cross-licensing agreements that go back to 1976.)

The Agreement, which was signed in 2001 and expires in 2010, has restrictions related to the transfer of licenses and patents.

"We don't know enough yet. We have a lot of questions about how this deal is structured," said Intel spokesman Chuck Mulloy.

"According to the public statements they made in their press releases, they (ATIC) also have 50 percent voting rights. So we need to understand a lot more about it. We just have to do due diligence. Make sure that our IP (intellectual property) rights are protected."

AMD, for its part, believes the transaction is structured in a way that doesn't violate any agreements. "We are completely confident the structure of this transaction takes into account our cross-license agreements. Rest assured, we plan to continue respecting Intel's intellectual property rights, just as we expect them to respect ours," said AMD spokesman Drew Prairie.

Transmeta's chips are on the block. The former supplier of low-power Intel-compatible processors said Wednesday that it is actively seeking a buyer, and also announced two agreements with Intel.

The Santa Clara, Calif.-based company, which has remade itself into a supplier of chip-related intellectual property, said that after exploring a range of "strategic alternatives" over the past few months and after strengthening its balance sheet, it will seek a sale as a way to "enhance value for all its stockholders."

Transmeta is working with financial adviser Piper Jaffray.

Back in February, Transmeta weighed an unsolicited offer from Riley Investment Management, which the company ultimately rejected. At that time, Riley claimed Transmeta had an unconvincing business strategy based on its LongRun2 technology--described by Transmeta as a suite of technologies for advanced power management and "leakage control." Riley claimed at the time that there was no "credible evidence" that shareholders would benefit from the LongRun2-related operating expenses.

Transmeta also announced Wednesday that it had entered into two agreements with Intel relating to the licensing of Transmeta technologies and intellectual property. The first agreement is a fully paid-up, nonexclusive technology licensing agreement that provides for the company to deliver "proprietary Transmeta computing technologies" to Intel and grants to Intel a nonexclusive license to use them.

The second agreement is an amendment to a previously announced settlement that Transmeta and Intel entered into on December 31, 2007, which granted Intel a perpetual nonexclusive license to all Transmeta patents and patent applications, including any patent rights later acquired by Transmeta before December 31, 2017.

That settlement provided for Intel to make five annual future payments to Transmeta of $20 million per year for each year from 2009 through 2013. "This amendment accelerates Intel's remaining future payment obligations under the settlement agreement," Transmeta said.

As a result, Transmeta expects to receive cash payments from Intel totaling $91.5 million before the end of Transmeta's current fiscal quarter ending September 30, the company said.

Update at 6:45 .p.m. with additional information about QPI licensing.

Nvidia's last-minute conference announcement has turned into a bit of shocker.

Despite all the chest thumping at its gaming conference this week, the high drama of Nvision reached its denouement with a waving of the white flag. The world's largest graphics chip supplier announced support for high-end gaming graphics using Intel silicon. This has raised doubts about its clout in the gaming PC industry, based on the reaction at many hardware enthusiast Web sites and at least one PC maker.

Representative of the shock expressed after the announcement, a headline at AnandTech said: "Hell Freezes Over: Nvidia Announces Native SLI Support for the Intel X58 Chipset." Translation: Nvidia must use Intel supporting silicon to get its technology into future gaming systems--not its own.

One PC maker agrees with this sentiment. "When they were top dog they could have gotten away with this," a representative said, alluding to the Nvidia nForce 200 chip that, until the about-face Thursday, was required to enable high-end Nvidia graphics on future Intel Core i7 systems.

Speaking on the condition of anonymity, the representative said Nvidia was quickly getting boxed out by AMD's ATI graphics unit at his company. Though there are also performance reasons for this newfound preference for ATI graphics over Nvidia, in this specific case PC makers, and users alike, don't want to add a special Nvidia chip to enable graphics on high-end gaming systems, he said.

And this reaction is echoed at Anandtech and other hardware Web sites. "We heard from the very start that most motherboard manufacturers weren't going to use the nForce 200 + Intel X58 combination," according to Anandtech, referring to the i7's supporting silicon, the Intel X58 chipset.

At issue is Nvidia's Scalable Link Interface, or SLI, a critical technology for game enthusiasts who want to use more than one Nvidia graphics board to power the most demanding PC games like Crysis. Nvidia had been saying that the only one way to get to high-end game nirvana was by using its own supporting silicon.

But the Thursday announcement changed all that. Now users can configure SLI systems for Intel's upcoming Core i7 processors "natively" as Nvidia puts it. That is, without the Nvidia nForce 200 chip. "That's (the nForce 200) been the only solution. And that's been a very, very high-end solution," said Tom Peterson, director of Technical Marketing for MCP production at Nvidia.

All of this can be traced back to an earlier issue centered on whether Nvidia would make chipsets based on Intel's QuickPath Interconnect (QPI) technology to work with the i7. The company has indicated that it will not. "When we go to Bloomfield (i7 processor) we've already announced that we have no intention of building a QPI-based chipset. Because of that, we've offered only nForce 200," Peterson said.

(Correction: Nvidia maintains that it has a QPI license but has elected not to make a QPI chipset.)

This, in turn, has fueled speculation that Nvidia will get out of the chipset business. "I can see where some people would think that in the longer term, especially with the (i7)" said Dean McCarron, principal and founder of Cave Creek, Ariz.-based Mercury Research.

But McCarron thinks Nvidia will stay in the business in the near term. And this is borne out by Nvidia's indication this week about an impending announcement of a new integrated graphics chipset for Intel's current Core 2 architecture--not the i7.

Update on August 28 at 3:30 p.m. with comments on SLI and AMD-ATI

Nvidia is extending its support for Intel's upcoming Core i7 processors while it prepares to announce next-generation integrated graphics silicon.

The announcement marks an effort to expand Nvidia offerings on Intel's next high-end desktop platform, which had previously been referred to as "Bloomfield." Intel branded it Core i7 prior to the company's developer forum last week. Nvidia has already said that it has no intention to build a chipset for Intel's next-generation interconnect technology called QuickPath Interconnect or QPI, which is part of the i7 design.

Nvidia said Thursday that it will license its Scalable Link Interface (SLI) technology for Intel's Core i7 processor. Nvidia's technology will work in tandem with Intel's X58 chipset, the supporting silicon for the Core i7, which is due to ship in volume in the fourth quarter.

SLI allows systems to be configured with multiple graphics boards. So, for example, system builders and users can build systems with two, three, or four Nvidia boards.

In essence, Nvidia is offering what it calls "native" licensing of SLI to its partners and system builders. Native licensing will not require the use of Nvidia's nForce 200 bridge chip and thereby the company hopes to broaden the range of its graphics offerings on i7-based PCs.

To date, Nvidia has only offered nForce 200, "which is basically an SLI chip that acts like a PCI Express bridge. That's been the only solution and that's been a very high-end solution. We'll continue to offer this," said Tom Peterson, director of Technical Marketing for MCP production at Nvidia.

PCI, or peripheral component interface, is the most common interface inside a PC for add-in boards.

Nvidia diagram shows supported configurations for Intel "Bloomfield" Core i7 processor and X58 chipset: x8 and x16 refer to the number of PCI "lanes." Generally, the more lanes, the higher the performance.

(Credit: Nvidia)

The distinction between native and nForce 200 is that native SLI "allows for more common configurations," said Bryan Del Rizzo, an Nvidia spokesman.

One source at a U.S.-based PC maker said that Nvidia was losing ground to AMD-ATI by not bringing out an SLI solution that could appeal to more system builders and users, especially with Intel's Core i7 on the horizon.

"It's something that customers have been asking us for a long time and actually a big change for Nvidia," Peterson said.

Nvidia will certify partner circuit boards in its Santa Clara, Calif., certification lab, Peterson said. Certification is required to enable SLI.

On another front, Nvidia will announce a new high-performance "motherboard GPU" in the coming weeks. This will be a follow-on to its GeForce 8200 mGPU, which is an integrated graphics chipset for desktop PCs that use Intel processors.

The upcoming mGPU will compete with the Intel G45 integrated graphics chipset.

Update at 10:40 a.m. with background about why Nvidia licensed Transmeta's technology

(Credit: Transmeta)

Transmeta has licensed its LongRun and low-power chip technologies to graphics chip giant Nvidia for a one-time fee of $25 million. Nvidia is hoping tackle power consumption issues that dog its high-performance chips.

Transmeta, an erstwhile chip vendor turned intellectual property supplier, said Nvidia was granted a nonexclusive license to Transmeta's Long Run and LongRun2 technologies "and other intellectual property for use in connection with Nvidia products."

The agreement grants to Nvidia a license to all of Transmeta's patents and patent applications and covers "advanced power management and other computing technologies," according to a statement from Transmeta.

LongRun2 technology is a suite of advanced power management and leakage control technologies.

Nvidia has always emphasized performance over power efficiency: its chips are fast but power hungry. Nvidia needs Transmeta's low-power technologies to better meet the requirements of the laptop and handheld markets, Nvidia spokesperson Derek Perez said.

"(Transmeta's) LongRun technologies for advanced power management and transistor leakage control have shown proven value in the market," Perez said. "You'll see us leverage this technology to improve the power/performance metrics of our GPUs moving forward."

Recently Nvidia has been grappling with overheating problems in laptops that use its graphics processors. On July 2, Nvidia released a "Business Update" that addressed a defect centered on "weak die/packaging material" in certain versions of Nvidia graphics silicon used in laptops. The die refers to the chip itself and the packaging is what encases the chip.

After this announcement, both Hewlett-Packard and Dell published lists of laptops that were affected by the flaw.

Transmeta, formerly a supplier of low-power x86 processors, now develops and licenses microprocessor technologies and related intellectual property. The company filed a lawsuit against Intel in October 2006 alleging that the latter infringed upon Transmeta's patents. Transmeta later settled with Intel for $250 million.

Transmeta is presently focused on developing and licensing advanced power management technologies and licensing its computing and microprocessor technologies to other companies.

Samsung's ARM chip road map may contain signposts to future iPhone processors. On Tuesday, ARM Holdings and Samsung Electronics extended their Strategic Long-Term Licensing Agreement, allowing Samsung to retain access to key ARM processor IP. For the iPhone, this may result in faster, more powerful models. Samsung currently makes the main processor, based on an ARM11 design, in the Apple iPhone.

Samsung ARM processor

(Credit: Samsung Semiconductor)

"The agreement is an extension of the previous subscription license and will enable Samsung to obtain early access to new technology, including the recently announced ARM Cortex-A9 processor, and broad access to a wide range of ARM IP," according to a joint release. Samsung will use the technology in future products aimed at the wireless, digital consumer, and mobile internet device markets, the company said in a statement.

The roadmap shows the ARM Cortex-ABN core achieving 800MHz in 2008 and 1GHz in 2009. Samsung is also slated to transition from 90-nanometer technology to 65nm later this year and 45nm in the latter half of 2009, according to the road map.

In a November 2007 interview with IDG News Service, ARM's CEO Warren East, said "there will be iPhone II, III...if we do our job right, then [iPhones] will be based on future ARM products." Though the main iPhone processor has taken on an Area-51 Hanger 18 aura of mystery, even after countless teardowns, one thing is clear: it is an ARM1176 core, similar to Samsung's S5L8900. "We have looked at the die markings inside the package itself and the die markings have a number of 'S5L8900' and as near as I can tell that's what the processor is," said Greg Quirk at Semiconductor Insights. Samsung, historically tight-lipped about any iPhone-related questions, could not be reached for comment.

Samsung is not necessarily a shoo-in, according to Quirk. Though there is a very good chance Apple will continue to use Samsung, he pointed to the fate of media processor supplier PortalPlayer--which generated 90 percent of its sales from Apple's iPod: it was dropped from the iPod (though, ironically, Samsung picked up some of this business). On another front, Quirk expects future iPhones to use new Bluetooth/Wi-Fi technology from Marvell Technology.

Apple is expected to bring out new models later this year that offer better performance and support 3G for faster broadband connections.

Samsung ARM roadmap

(Credit: Samsung Semiconductor)