We've learned that Fusion is a native chip that represents a synergy of CPU and GPU on a single chip, at least the one that comes in 2011 is. It won't simply be two dies in MCM on the same chip. AMD has announced two APU products, delayed all the way to 2011, and at least one of them will be a 32nm chip.

AMD has decided to call these chips Accelerated Processing Unit (APU) and the chip that we’ve all learned to call Fusion has a new name. Fusion won’t be used for APU chips anymore, as AMD says Fusion is Future, and at least 50 other things.

Fusion, a native GPU on CPU, is actually a native chip. AMD won’t use MCM (Multi chip module) approach, something that Intel used with Kentfield and Yorkfield. Fusion chip is completely native, CPU and GPU synergy chip and will be designed to fit these two together on the same die. This approach makes much more sense in 32nm than in 45nm, simply as you will have enough space to put a good GPU and CPU on the same chip. 

The original Fusion, a 45nm CPU with GPU, has been canceled.