Back to top

Analyst Blog

Advanced Micro Devices Inc. (AMD - Analyst Report) 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 - Analyst Report) and Mips Technologies Inc. . 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).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SUPER MICRO… SMCI 26.68 +8.94%
CENTURY ALU… CENX 27.08 +8.41%
CANADIAN SO… CSIQ 38.17 +7.70%
BANCO DO BR… BDORY 16.72 +7.66%
AROTECH COR… ARTX 3.79 +5.87%