[CES 2011] It was a long time in the making, but AMD’s Fusion technology has finally reached consumers with a first batch of laptops, that certainly won’t be the last. The basic idea of Fusion is what semiconductors have been thriving for, in the past 30 years: integration. With the integration of and AMD graphics processor (GPU) into an AMD central processor (CPU), the chipmaker has built a little wonder: the AMD Fusion APU (APU= CPU+GPU). Accelerated Processing Unit (that sounds a bit “marketish”, but hey, AMD gets the naming rights)

AMD APUs will come in two flavors for now: the 18W version (codenamed “Zacate”) for notebooks, and the 9W one (codenamed “Ontario”), for Netbooks. AMD is clearly aiming for volume sales because it targets $200 to $499 computers that are currently selling like hot cakes, and predicted to sell even more in the future. Here’s why:

The business proposition for AMD is simple: they can bring a performance/Watt ratio that is difficult for competitors  to reach because they are in essence the only company that masters both CPU and GPU designs. This should provide them with a technical edge (if they are smart at what market they target), that should turn into real market share (and profits).

Zacate and Ontario will mainly compete with Intel’s Atom and ultra low voltage Core 2 processors. On the Atom side, the best advantage of AMD (in our view) is the ability to utilize more than 2GB, and the faster graphics processor. Those two are a very strong justification if you’re shopping for a Netbook, or a thin and light Laptop. Adding memory is one of the most cost-efficient way to improve performance, and I’m fairly certain that Intel will revise its 2GB limit in its own Netbook platform within 18months.

Secondly, AMD will come out very strong in multimedia applications because they have a very effective hardware acceleration for visual and gaming apps. It’s going to be difficult to compete against their solution, in a power-efficient way (absolute performance can always be won, but at what price?).

If you don’t care much about graphics, you should wait to see how the processor performs at non-multimedia apps like web browsing (although it should do well for Flash), and productivity tasks (an SSD might help more than a GPU here).

In the end, there’s a chance that AMD APUs will enable manufacturers to build very thin and light computers that still have a 7-10 hours of battery life.  We should see plenty at CES, but our guess is that the first generation will focus on cost, instead of design.

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