California based chip making giant Advanced Micro Devices, Inc. (AMD) may have decided against entering the smartphone market in the past but the company seems to have changed its mind and in a new development, it has decided to reenter the market by partnering with Samsung. It is important to note that over the past 10 years, AMD had concentrated on the GPU and CPU businesses.
Smart Phone Market
At the time it seemed like a sensible move since rivals Intel had also tried to enter the smartphone space but failed to compete against Qualcomm. AMD’s only attempt at entering the smartphone market was through graphics chips.
B the company sold that division to Qualcomm back in 2009. However, the sheer scope of the smartphone market is something from which a company of the size of AMD cannot stay from and now the company has decided to partner with the world’s biggest smartphone manufacturer Samsung.
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In this regard, it is necessary to point out that AMD will not be actually manufacturing chips for Samsung but instead license its proprietary graphics technology known as Radeon. The company will earn through royalties and licensing fees.
Samsung’s Diversification
Over the years, Samsung has been heavily dependent on Qualcomm’s Snapdragon SoCs (systems or chips), which eventually forced the Korean company to come up with its own SoCs named Exynos. This was a move aimed at reducing Samsung’s dependence on Qualcomm but at the end of the day, Snapdragon outperformed Exynos on all parameters except for in CPU performance.
Hence Samsung needed another strategic move to reduce Qualcomm’s influence and it is believed that the licensing of AMD’s Radeon technology could prove to be the right strategy. Radeon is generally used for gaming consoles and personal computers, which is why the question of performance is unlikely to be an issue anymore. Once it is bundled with Exynos, Samsung could cut its costs significantly and also reduce the hold of Qualcomm. The exact terms of the deal have not year been disclosed.
