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Gulf reduces Intel – AMD gulf

Posted by kp

By David Kirkpatrick

It's not a great day for Intel. With its much smaller but super-feisty rival AMD getting an infusion of $608 million from an investment arm of the government of Abu Dhabi, the ground shifts slightly toward the insurgent in microprocessors.

AMD has had a tough road from its inception, battling against a quasi-monopolist which just happens to be one of the world's best technology innovators and a superb marketer to boot.

Even though AMD (AMD) about 5 years ago shifted direction and rethought PC microprocessors in the right way—one which has transformed Intel's (INTC) technology as much as its own—

the little chipmaker has still not really won any wars.

AMD has remained subject to the whims and vagaries of Intel's market power, even though it has transformed its market position and become a viable provider for chips across the board in x86 computing. Whereas until not long ago it mostly only sold chips for desktop PCs, now it sells top-quality processors for machines ranging from the tiniest laptops to the biggest servers and supercomputers. It has gained a lot of market share but not made very much profit—

and lately, none. In fact in the most recent quarter AMD lost a stunning $396 million.

Intel is so rich and has so much clout and commands so many resources that AMD throughout its history has repeatedly run up against a competitive wall that was hard to surmount.

Lately that's been happening again, as Intel has mimicked many of AMD's innovations in multi-core computing and applied the lever of pricing to force its rival into the red.

The investment today gives AMD just a little more breathing room and probably insures its viability for a while longer, and maybe more than that.

While AMD will never have Intel's massive scale advantages, with this money and its continued technological smarts it is likely to be better positioned to offer the chips that will keep pushing performance.

That will even be good for Intel, however much it may annoy its executives to see this sovereign government investment fund infusing its enemy with new vitality. Those Intel executives grudgingly acknowledge today that their company has been made better by its need to match and better AMD's innovations.

I have no idea if AMD can turn around its market position well enough to impress Wall Street again and get its stock out of the toilet. But Abu Dhabi's Khalifa Al Mubarak is probably not completely dreaming when he said in today's press release "We see significant opportunities for long-term growth and value creation."

With its string of recent losses one cannot help wondering if AMD will be able to stay around and keep up its healthy annoyance of Intel, continue keeping its giant rival sharp, and keep pushing the boundaries of computing for all of our benefit. Now those doubts are erased, at least for a while.

To argue whether a AMD chip is better than an Intel chip really doesn't mean much except in power consumption and environmental concerns. When push comes to shove vis a vis performance, the question to be asked is "What is the bottleneck of the system the cpu in in?"

First, there are two possible 64-bit buses; first the address bus and second the data bus (at least in the architectures being discussed here.) The address bus, combined with the software, control the max amount of memory and i/o (it is memory mapped)devices which can be accessed.

The data bus, in my view, is more critical. It is one of the determining factors in how big a chunk of address and/or data can be fetched. Having a 64-bit cpu data bus doesn't mean a 64-bit fetch. It is very simple to implement two 32-bit fetches to feed a 64-bit machine. This, of course, slow computing and decreases system cost. When purchasing COTS motherboards , I've yet to see specs. such as bus width, etc., that include information like this. And technical support usually goes "duh" when I ask them.

Any system is only as good as the slowest component. Both AMD and Intel produce excellent products and deserve accolades. AMD and Intel need each. Which chip is faster is really not relevant; it all depends on what system you stick them into.

When I was working at UMC, a veep and I were talking about TMSC. He was saying, unlike companies like Microsoft, they would never want to put TMSC out of business — their the one's that force UMC to keep on their toes and to keep innovating.

Posted By Rich, Maricopa, AZ: November 20, 2007 12:22 PM

Here's a funny thing. I own both an Intel and AMD driven computer. There's no difference that I can really see, but the Intel costs me more. It's amazing how a brand name like Intel could dominate the market, but that's what most people want to buy.

Analogize: Apple is gaining in the operating system market as well as with their ipods and phones, but do you think they will overtake Microsoft which has a huge lead? Impossible right. AMD is facing that same road.

Let's wish AMD success because we need the competition. I would hate to see how much the Intel computer will cost, without the AMD as the alternative.

Posted By Albert, Fountain Valley, CA: November 18, 2007 6:01 PM

Anyone looking for a reason behind this need look no further than Intel's massive operations in Israel, which designed the current chips. Lots of bragging rights all around for the products from that lab. Arguably they are Intel's biggest asset at the moment, deservedly so.

Abu Dhabi would understandably want to back the enemy of Intel, i.e. AMD. Anything to take away from the bragging. Anything to take away from Israel.

Yes, I am saying this could be nothing but another frontier on the tired old religious wars.

I'm actually an AMD fan. I just wish they weren't so desperate for cash like this.

Posted By PM, Atlanta, GA: November 17, 2007 6:16 AM

AMD's horizontal hpocycloid architecture clearly maximizes retrograde momentum in its nemsis core. Oh wait – sorry! That's New England's pash rush. Never mind.

Posted By Doug, Pittsburgh, PA: November 16, 2007 3:33 PM

Well this should be good for AMD, in as much as Abu Dhabi is such a hot bed of technology.

Posted By mike, chicago, IL: November 16, 2007 2:06 PM

To those who responded with such "vigor" to my earlier posting, I never stated anything about 64 bit, I would beg to differ on when dual core product actually shipped from who and when and you can charactize Intel's package as not being true quad core if you are that much of an AMD schill, but the bottom line is the Barcelona is still not in the hands of AMD customers, is not meeting any of the performance specs and Intel is focused on meeting customer needs while AMD appears to be looking for nothing more than investors and press ink.

Posted By David Handrahan, Phoenix, AZ: November 16, 2007 1:20 PM

Native quad core killed AMD's yield. Their 3 Core solution is nothing more than a broken quad core w/ 1 core disabled so they can sell some procs that failed QC.

Intel realized the marketing advantage and took it on quadcore. While AMD's solution scales better and is technically superior, it's not as profitable or cost efficient given their already lacking fab capabilities. Few programs out there take advantage of 4 cores native or otherwise. Much like AMD's play to "64bit" their processors…few people have PC's w/ more than 4GB making running in 64bit useless unless bragging rights amongst nerdy friends counts.

Given the continued lack of 64 bit drivers, software, and adoption at the consumer level…it's all just marketing hype and no different than having 600hp car and a limiter at 90mph.

Intel's got the win on marketing, production, and delivery. AMD's got some cash now but has lost so much momentum in the past year they need every penny just to survive. My money's on Intel for the next year+.

Posted By Mishap, Atlanta GA: November 16, 2007 1:17 PM

To Chip Designer,

I think you are forgetting a few things. First, why do people by a processor, or a system with a certain processor? Price, performance, quality, reputation, value…and not necessarily in that order. Intel, right now, has products that cover nearly every aspect as mentioned above. Also, when you speak of native vs. pasted, you are forgetting that AMD's 'native' (or naive) quad is having a hard time surpassing the performance of its own existing dual core processors, much less Intel’s mid/top performers. So you can yap all you want, but the bottom line is that Intel is light years ahead of AMD with regard to process technology and it is proven by the quality and sheer numbers of processors it produces. Heck, AMD can't even get Barcelona out in decent numbers/frequencies…and they are nearly 9 months late at that. Finally, I'll just say, Intel didn't become the giant it is today by being second best (with the exception of Netbust).

To Geek,

If you know anything about past CPU advancements, you'll realize that Intel has had numerous firsts as well. Most recently, Intel began shipping the worlds first 45nm CPUs with High-k (Hf02) metal gates. If you know much about the shriking process, you'll realize how huge of a development this is and how it solves horrible leaking issues with previous materials. AMD will be lucky to produce an in-house 45nm chip in the next 2 years. Even they know they can't do it without the help of IBM and TSMC. What's worse, they can't even get good yields on their 65nm technology which they've struggled with for the last 1.5 years. But, honestly, who cares who's really first? What really matters is who's the best. Right now, you have to concede that across nearly the entire market segment, that's Intel.

Posted By Rob, Phx, AZ: November 16, 2007 1:09 PM

hey GEEK,

whether or not i understand microprocessor design, the thing i appreciate is the fact that i can get a processor from intel that out performs anything offered by amd.

amd has always been second best when you take all pieces of the microprocessor pie into consideration. and the one processor they did have that outperformed intel was only for a very short while until intel came out with the all mighty stomper that put amd back to bed….

lol to those that complain intel 'superglued' two duals to make a quad core….

it was amd's lamer idea of their initial quad core…."two dual core processors in two different sockets to make a quad core…"

yea right…amd is the inovation leader…they have inovatively put themselves into the biggest rutt/loss to intel that they've ever been in to the point that they now must rely on HUGE investments from foreign countries just to stay in the game.

i wonder why the savior of amd is a foreign country…hmmm…could it be that america has long put amd where it belongs…in the back seat with it's inferior products.

of course, if they can inovate any way to gain any considerable market share to actually have an impact on intel, that would be at least a valiant effort…

it hasn't been done yet and from the sounds of the desperate investors of amd, it seems quite a long time before amd can even catch up, let alone out perform intel.

amd has always been a second rate, intel wannaB and will likely continue to do so…why change what they do so well?

get ready abu dhabi….u just invested in a dying breed and i'm guessing since amd's performance and capabilites, or lack thereof, have been known throughout the world for years, that you'll most likely be selling your amd shares within two years.

(see if you can get intel to buy them back for 25 cents on the dollar…that's about what you just purchased!)

Posted By MadDawg, DC.: November 16, 2007 1:03 PM

"David, please get your timeline facts straight. It has been AMD who has mimicked ALL of Intel’s multi-core designs, with the exception of the AMD recently announced plans for 3 core"

You must have been sleeping when you wrote this.

AMD was first to do the 64 bit.

AMD was first to do the Duel-Core.

AMD was first the do the TRUE "native" quad core.

When intel did is:

To copy the AMD 64 specs and rename it.

To follow AMD's duel core product.

With pressure from the market and financial analysts, they super glued two duel cores and released a quad core.

If you understand microprocessor design, you will appreciate things like direct connect architecture, memory controller on chip, etc.

Posted By Geek, Bangalore: November 16, 2007 12:23 PM

Hey Chip design,

"They are really just selling you four processors cheaper than you could buy them inidividually."

It works for me.

Posted By mike, london ky: November 16, 2007 12:19 PM

I think the most important thing for us to consider is not much about technological advantages of neither AMD nor Intel, but all about to keep AMD alive to continue pushing the technological envelop that helps to innovate and economically benefit to the average consumers.

Posted By saigonslim austin, tx: November 16, 2007 12:03 PM

how much did Hector paid you for this article? You did not mentioned that AMD issued 49 millions new shares (dilution to current outstanding shares). AMD is desperate for cash! the investment arm of the government of Abu Dhabi which paid 12.7/share deos not mean they are smart people! i will not even touch AMD below 10! it is dead company burning money left and rigght with no good CPU.. Barcelona is a bust

Posted By wally, atlanta, ga: November 16, 2007 11:51 AM

David Handrahan,

You are the one, my friend, who needs to get the facts straight. Intel followed AMD into the dual core market. Intel quickly pasted two dual-core die together to make a quad-core Frankenstein whne AMD announced plans to introduce four cores on one piece of silicon. Intel's current quad-core is no different than putting two chips in the same tiny package. They did this present the appearance that they had quad-core ready. It is all marketing and the gullible like yourself bit it hook, line, and sinker. This is a perfect example of how Intel will stretch the truth to try and sell you something that has no real advantage over what already exists. They are really just selling you four processors cheaper than you could buy them inidividually.

Posted By Chip Desinger, Callifornia: November 16, 2007 11:49 AM

David, please get your timeline facts straight. It has been AMD who has mimicked ALL of Intel's multi-core designs, with the exception of the AMD recently announced plans for 3 core…which nobody but Hector Ruiz seems to see a market for.

Posted By David Handrahan, Phoenix, AZ: November 16, 2007 11:34 AM
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Jon fortt

Jon Fortt
A senior writer for Fortune, Jon Fortt focuses on technology and innovation in Silicon Valley – a subject he's been reporting on since his days as a rookie reporter for the Lexington (Ky.) Herald-Leader. Before joining Fortune in 2007, Jon had reporting and editing stints at Business 2.0 magazine, and the San Jose (Calif.) Mercury News, Silicon Valley's hometown newspaper.
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