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AMD is delaying the launch of Zen until the end of 2016

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AMD is delaying the launch of their new Zen based CPUs until the end of 2016. The news comes on the heels of a rather subdued, if optimistic, earnings report in which Lisa Su, AMD CEO, focused on AMD’s commitment to innovation and highlighted improved R&D spending. It is true that AMD’s operating loss has dropped massively when compared to Q4 2014, but much of this is due to cut backs in operating costs over actual revenue. This is despite claims that AMD’s GPU and Semi-Custom sales were to thank. During 2015 we saw AMD start to pull back from other products (and product lines) to conserve money and focus on creating a compelling product. Zen is the hope for AMD’s future along with moving to a 14nm process.

So far the leading theory on why we are seeing the delay is that AMD wants to pair Zen with their new Polaris GPUs. These are rumored to feature HBM2 (faster and greater density) along with other improvements to the architecture. The problem here is that this strategy has never paid off for AMD in the past and there is no reason to assume it will now. AMD is sure to continue to sell GPUs to people as they are still a fairly solid offering. However the belief that gamers will pair an expensive GPU with an untested “high-end” CPU is very faulty logic.

AMD is running on a very, very tight budget and this is going to affect R&D as well as regular production launches. The days of multiple, major, R&D projects and product launches are far behind them. It is likely that AMD simple cannot afford to launch the Zen based Summit Ridge CPUs the way they wanted. There is evidence to support this as AMD has confirmed that Summit Ridge will hit the server market in 2017 before the consumer market. AMD could be waiting for commitments from that end (along with the money) before pushing the product to a wider group. If there is no confidence from the picky consumers in the gaming market then Summit Ridge could end up being a loss on the consumer side. Knowing they have the server business to back it up will help prevent a much larger loss. The same thing can be said for timing the release with a new and more advanced GPU.

AMD is looking at a fairly bleak 2016 unless something big happens. Intel and NVIDIA are not faced with the same cash flow issues so they will push ahead with product launches and overlapping R&D projects throughout 2016 and into 2017. It is a possibility that by the time Summit Ridge hits the market it will already be behind the times…

Sean Kalinich

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