AMD Says Zen, Chip That Must Win, Will Compete With Intel

(Bloomberg) -- Advanced Micro Devices Inc., struggling to hold on to shrinking market share in personal computer processors, said a new product debuting early next year will make it competitive in high-end machines used by gamers.

The company showed off a test version of a processor based on its Zen design running side by side on the same tasks against a computer powered by an Intel Core i7 6900k. The new Advanced Micro Devices processor, which wasn’t running at its full capacity, uses less electricity and won the test, according to the company’s presentation.

Offering a design that can compete with Intel’s products in performance and power usage is key to Chief Executive Officer Lisa Su’s attempts to turn around Advanced Micro Devices. Zen’s predecessors haven’t lived up to their billing to run faster while using less power and have been unable to halt market share losses to Intel, the world’s largest chipmaker.

“I know there’s a lot of anticipation around Zen,” Su said in an interview. “We intend to continue to execute.”

The first version of Zen to be offered will be targeted at gamers and those who like to build their own machines. It will be at least 40 percent better than its predecessor, the Sunnyvale, California-based company said.

While Advanced Micro Devices has won back some lost ground in the market for graphics processors, it’s still floundering in the larger business of microprocessors, the chips that run the main programs in PCs. The company’s market share has fallen by more than half from five years ago when it had more than one-third of the desktop processor business. AMD’s failure to cut into Intel’s lead contributed to losses and cash outflows that had some analysts speculating it would struggle to survive.

Since Su took control of the chipmaker in October 2014, its finances have rebounded with wins in areas such as game consoles. The stock gained less than 1 percent to $10.62 at 2:21 p.m. Wednesday in New York and has more than tripled this year. Still, the opportunity in PC and server processors is much bigger and more profitable and the investments in Zen need to pay off if the company is to return to sustained profitability.

The first version of Zen is designed to convince PC buyers that Advanced Micro Device’s chips are capable of running the most powerful machines and will be the flagship for a new Ryzen brand.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net. To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Andrew Pollack