AMD admits APU success will hurt discrete GPU sales considerably

During a recent conference call, AMD’s Thomas Seifert finally admitted that APUs will indeed hurt the sales of dedicated graphics cards, and especially the lower-end ones.

Thomas Seifert, interim Chief Executive officer, note that in the long run, some parts of the business will be ‘cannibalized’ and the low-end discrete GPUs will be replaced with Fusion-type (and similar) products. Of course, as far as they are concerned AMD are winning whichever way it turns.

Recently, AMD had insisted that low-end graphics cards- such as the company’s Radeon HD 5400 and 6400 series- will continue to exist despite huge improvements in performance of integrated graphics solution. AMD then upped the performance of its Caicos ship (to give us the HD 6400 series) so that it was still competitive with the A-series Llano chips.

In the long run, parts of [graphics cards] business will be cannibalized and the low-end discrete GPUs will be replaced with Fusion-type products. This is all goodness for us because it replaces low-cost margin revenue with high-gross margin revenue,” said Thomas Seifert, interim chief executive officer of AMD, during the most recent conference call with financial analysts.

Of course none of these changes are going to happen over night, and AMD will still continue to offer dedicated GPUs, but in the future they are less likely to produce the lower-end cards. Currently however, it still has the entire Intel based motherboard market that can still benefit even from a low-end discrete GPU but it will be interesting to see how much their sales drop as Fusion comes to the forefront of the market.