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Friday, September 10, 2004

AMD Uber Intel?
Great story on Businessweek.com

Here are the highpoints:

* In a humbling moment, Intel executives announced the acceleration at the Intel Developer Forum on Sept. 7, a week after AMD showed off a working version of its own multiple core processors. "We've had some fumbles," says Intel President Paul S. Otellini.

* AMD has grabbed 7% of the low-end server market, up from almost nothing two years ago.

* AMD has passed 50% of the U.S. retail store sales for desktop PCs in recent weeks.

* AMD is using new manufacturing techniques in the memory-chip market to outgun rivals both on cost and technology.

* When Intel shocked Wall Street on Sept. 3 by slashing its forecast for third-quarter sales and profit margins, the chip giant cited "lower than expected worldwide demand." But AMD says it's seeing no indication of a broad slowdown.

Here's the rub, and there always is one: AMD's projected 2004 profits are $7.35 billion. Intel earns that much in 11 days. Intel is sitting on $14 billion in cash, compared with $1.1 billion for AMD. With those ratios, anyone with half a brain will tell you that Intel could crush AMD in short order. The other rub: Even though it theoretically can, will Intel able to do so in reality? Or has the company become such an air hog (with apologies to Fram) that it's become impossible for it to react in a timely fashion?

# Permalink Posted at 10:47 AM 6 comments Email this Link

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Actually Intel's five year average annual income puts the 11 day number at $883,369,310.00 which includes investment income from that big stash of cash.

When AMD debuted the Athlon I figured it was only a matter of months before Intel would buy them out. Just shows how all that cash can insulate their people from reality.

The reality that very few people talk about and has been forgotten by the present-day media: AMD was a partner with cross-licencesing agreements with Intel until AMD started to exercise the agreements and was forced into nearly ten years of legal battles.

Nearing the end of these shenanigans AMD bought the rights to the EV6 bus architecture and in five years (the required time it takes for an all new chip to go from paper design to sellable silicon) presented the world with an x86 processor that ran at a higher clock speed than the contemporary Pentium.

Since the debut of the early K6's the media has nearly always referred to AMD as Intel's rival, never their former partner.

The next point has long been a topic for "abrasive" E-mail between Bill and I: "Intel is an innovator, AMD is an also-ran" was Bill's comment to me on many a reply.

I still think AMD has, since its creation, consistently been the "innovator" and Intel did some "innovating" early on, became a "litigator" during the eighties, as is fast becoming an "also-ran" in the past few years.

There seems to be an aversion to the true history of computing in the mainstream media. I've always enjoyed "The Hard Edge" (the column formerly known as?);), but I always thought some of the comments were unnecessarily pro Intel. I had heard it said that CNet was majority owned by an Intel investment company and figured it made sense not to bite the hand WAS feeding. Maybe the current change of events will finally show us all "The Harder Edge".

# posted by Anonymous 10:35 AM

WRM wrote the comment above

# posted by Anonymous 12:36 PM

Well, if CNET was owned in part or whole by an Intel consortium and The Hard Edge was pro-Intel, I don't think the column would have been canceled, yes? One theory shot to heck.

AMD was sued not for exercising the rights it acquired under its cross-licensing agreement with Intel but because Intel claimed AMD had gone beyond the boundaries of the agreements. In some cases, AMD had, in others it had not. That's the 'lump sum' theory of lawsuits: Sue 'em for what you think they've done and what you think they might do at the same time --it's cheaper. AMD has sued Intel as well.

I stand by my innovator/imitator comments, but, as with any generalization, there are always exceptions. It's the nature of a generalization. One could argue that AMD's creation of the Sempron line imitates Intel's Celeron... One could also argue that while a 32/64 bit CPU makes for a great headline, it really won't do anything for anybody until a released version of an operating system appears and applications for that operating system are available. Were anything other than that true, then the Athlon64 3800+ in one of my computers would be markedly faster than the 3.2GHz Pentium 4 Extreme in another. It's not. It's a little slower (about 11%) with the video rendering apps I use.

I don't deal in abstracts. Just the facts.

# posted by Anonymous 5:16 PM

"I don't deal in abstracts. Just the facts."

Yeah, right.

Is it shot? during the time that you stopped saying bad things about AMD, and started trashing Intel your column got smaller and then got canned.

AMD was sued as a result of making a better than Intel 386/486, and for using the math coprocessor in their designs. All of which was OK since AMD (and others) eventually won the lawsuits. What Intel gained was time in releasing that wonderful chip the pentium pro.

As soon as AMD introduced the Athlon, and everything else based on the EV6 bus, they ended the imitation argument. Any one who does otherwise is suffering from H.U.A induced hypoxia, or severe dehydration.

Here are some more facts

Athlon64 3800+ (2.4Ghz) vs 3.2Ghz P4E - 25% slower clock means 11% lower performance. 3.2Ghz P4E: $800.00/ea., Athlon 3800+: $630.00/ea - 21% less expensive. Plus, we both know that how the app is optimized can make a lot of difference, and this is where Intel's "big money" comes into play by hiring programmers to tweak apps to run better on their chips.

WRM

# posted by Anonymous 11:24 AM

There are two ways to buy computing solutions: "Here's how much money I have, what can I get for it," and, "Here's what I need to do, tell me what it costs." And there is a difference. If you go back and read the April '04 Hard Edge you'll note that a relatively miniscule single task computing difference between a 3GH P4 system and a 3.2GHz P4 Extreme system amounted to 72 hours by the end of a year.

Application designers, like any industry, work to the biggest market, the one from which they can make the most money.

The thing about the column was a cheap shot and well below the standard of argument of come to expect from you.

# posted by Bill 11:40 AM

Cheap shot against who? ZDNet was the target of the remark. It was just a little conspiracy theory humor.

I agree with a lot of what you've said in "The Hard Edge" over the years, but I disagree with the innovator/imitator comments. I'm hoping to find out why you stand where you do.

Your comments about Sempron/Celeron, and Athlon64/Pentium 4 Extreme sound like blind sour grapes: Even though AMD has already caught and passed their former partner and recent rival Intel, they still lack a certain style.

"AMD's projected 2004 profits are $7.35 billion."

Anyone with half a brain will tell you this will nearly double AMD's 2000(best ever in the companys 31 year history)income and set a new record for the company. AMD set another company record during Q204 by posted quarterly income in excess of 2 billion. They are on par with Intel in the desktop market, and have claimed 7% in the server market (set the wayback machine and tell that to someone from 1990, but wait, that's me).

I seem to remember an O'B comment about how AMD would have arrived until they established a presence in the corporate market. HELLO?

Where's the atta boy? Where's the subjective assessment telling how a $100,000.00 startup is overtaking a $2,000,000.00 startup (granted in 30 + years time). I guess we'll have to wait another year when Opteron dual-core shows up ahead of Itanium dual-core.

Question: Was Itanium originally intended as a dual-core design? I say no (check the bus). Was Opteron? YES - just waiting for .09 process to be cost/size effective. Will dual-core Itanium require a new slot? Wo knows, they're so proud of it that there are no links on their website.

Yeah , yeah , yeah, but AMD still lacks style.

I like "The Harder Edge" as a new name (check with John Fogerty for the legal stuff), but you've got some 'splainin' to do, Bill. Like if TIME was so important why not buy a 940 pin AthlonFX-53 (same price as the P4E) and an ASUS SK8N (") and go back outside and work on the car?

WRM

# posted by Anonymous 1:37 PM

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