AMD vs. Intel : The Gloves Come Off
January 19, 2006
It’s amazing how much the landscape of the processor market can change in a rather short period of time — two years ago AMD was faltering as Intel was steam-rolling over it. Even with the successful introduction of numerous chips, you would be hard pressed to find many top-tier OEM’s supporting their processors — let alone finding their chips inside enterprise class workstations. How quickly the times have changed.
A few years later, AMD has been eating away at Intel’s high margins business with their Opteron processors, and slowly but surely they have been eroding Intel’s consumer processor lead. The anti-trust allegations filed against Intel have put them in the limelight, and as such they have been toning down aggressive marketing campaigns aimed at stores, manufacturers, and IHV’s. AMD had made tremendous inroads in the processor market in the last year, and it does not seem to be letting up, and Intel seems to be watching the train come straight for them.
Intel has just released their own earnings report for the fourth quarter, coming in lower than the company’s own projections. Next year Intel is expecting a mid to high single digit earnings increase, down significantly from the usual double-digit growth rates that Intel has been expecting. Rational Intel supporters have been commenting regarding these projections left and right stating that expecting double-digit growth from a company the size of Intel would be crazy, and that the computer market is on a downward spiral this year. While these comments were not possible to disprove when Intel’s announcement was made, at this point in time we can take a moment to reflect on the earnings projections and the growth of the company itself.
AMD has also announced earnings, blowing investors away and even outdoing the most bullish of investors (never easy). This should not take anyone off guard, as news releases have been flowing in for months about AMD’s retail penetration surging, but the amount by which AMD has improved their bottom line is nothing to scoff at. It is even rumored that AMD will be raising prices on their Opteron lineup this month, further solidifying the role they possess in the market, being able to raise prices and still put pressure on the titan of the industry is not an easy task. When looking at the picture of both companies we must also take into account what exactly happened this year.
Intel itself went through a chipset shortage, which while not too devastating on the bottom line itself, is a cause for concern. A shortage of a market that Intel owns (literally, Intel is the biggest chipset producer and graphics chip manufacturer in the world), we must think about the internal problems or mismanagement occurring. OEMs have reported shortages on the supply side, indicating the Intel was not able to keep up with CPU demand either; not being able to keep up with your bread and butter product demand is always a cause for concern.
During this same time period, AMD has executed beautifully by changing nothing, by forging ahead with already laid out roadmaps and by again impressing IHV’s and OEMs their capacity and market refreshes. Not only that, they have also become a dominant force in the market, helping dictate the future of the industry. Dual core processors and 64bit processing have become much more prevalent due to AMD, and instead of being a “follow the leader company” (which was the fait of Cyrix), they have become an innovator in and of themself. There Opteron chips are considered best-in-class for servers and enterprise systems, and every major OEM has announced support for AMD processors, well all but Dell (eMachines actually featuring them in every system offered). After years of being bullied by Intel, OEMs are loving the fact that the consumer does not care nearly as much anymore, and finding it pleasant that they can finally move business away from the 900lb gorilla that is Intel.
This year may have been a fluke though. Intel is aggressively moving their manufacturing lines to newer fabrication processes, which in-turn will allow for greater performance and cost-savings by the company, while AMD is left in the dust. Intel has the cash, investor support, and clout to throw enough money at a problem to solve it. AMD will be left months behind upcoming fabrication changes, and Intel will lay-ground on two new fabrication plants this year, which should be churning out new chips by 2007. Intel also will not miss the ball again, at least not without a fight. They will aggressively release new processors, much like the Core and Core Duo lineup that have just been released, and will attempt to re-gain the “1%” of market-share they claim that AMD has taken away from them. More worrisome, is the fact that AMD’s roadmap for the upcoming year does not look like it will devastate Intel at all. AMD will have to step up their game as well to fight off Intel in the upcoming year, especially with the release of LIVE and VIIV that are expected from both AMD and Intel respectively. This is the year that AMD should be as aggressive as possible, claiming more market share while the market is expected to grow more than ever. While Intel and fans are in agreement that the processor market will see less growth this year, Microsoft seems to think the opposite, with this year being its biggest single year of product releases of all time — marked by the release of Windows Vista. AMD will have an opportunity to grow more than ever if they can continue to steal market share and invest in R&D and fabrication processes. The crystal ball is very cloudy for the next year in the processor market, but the one thing that is for sure is that AMD has thrown down the gloves and is ready for a brawl with the long-time 900lb gorilla of the processor market. Stay tuned for further developments at Processor Blog.
Comments»
[…] The fourth quarter itself has grown by over 17% compared to last year, and the year as a whole saw a surge in PC sales with 218.5 Million PC’s sold — an increase of over 16%. The PC business seems to be doing as good as ever. This article shows how there are some signs of a slow down, and United States PC sales finally account for less than European sales. […]
Ha ha.
“AMD has also announced earnings, blowing investors away and even outdoing the most bullish of investors (never easy)”
AMD stock *down* these last few days and **5.75** profit on sales is “blowing investors away”?
Yeah. Right :rolleyes:
The article does show a bit of AMD bias…as most on-line speak of AMD vs Intel does (anyway).
AMD knows that nothing short of Merom will be any threat to their processors. And that’s when I’m betting AMD releases their quad-core CPU’s on AM2.
This will be an interesting year.
Vortigern,
Thanks for that. My spell check went crazy and changed it and I didn’t notice. I’ll make sure to double check for that next time
DASQ,
Yes, it seems like it will be an interesting year. Great for us, we’ll have better processors at every pricing tier. I have an article going live tomorrow taking a look at AMD’s possible implementation of Z-Ram.
Yeah, competition always benefits the market (hopefully bring those X2 prices down!).
Although I’m not sure what AMD has up it’s sleeve aside from the recent announcements, they way they talk it doesn’t seem like we’ll see any major change to the Hammer architecture for a few years…
Who cares is Intel are releasing “LIVE” and “VIIV”, sure they are scrapping the Pentium name, only because it has become slow and stale.
Until Intel’s processors are 20% faster and cheaper than AMD ones I will stick with AMD.
FearTec,
Just out of curiousity, why not purchase an Intel if it is the same price with better performance across the board?
DASQ,
Yes I agree, AMD has been talking as if they don’t have anything up their sleeves. I’m sure we’ll see a revamped roadmap from them very soon, I’ll keep you posted. Intel for example was in the same position a little over a year ago, but did a total revamp of their tentative roadmap at the time, showing their Core Duo architecture for the first time. AMD’s pressure made them go through a total change, as I’m sure Intel is trying to do to AMD at the very moment…
FearTec:
Intel’s budget dual cores are already a good deal (varies depending on where you live) cheaper than the cheapest AMD X2. The problem is the issue of heat and power usage. If it were cooler, had better chipset support, and better motherboards, many people would take it and overclock it to 3.4gHz or so. Also, Intel is releasing a Pentium D 805: 2.66gHz, 533mHz FSB (VERY overclockable I bet! It’s sitting on a 133mHz bus with a 20x multiplier!), 1mb cache per core at less than $200! If it looks the way I want it to look, it’ll be an overclockers new hotspot.
Errm.. Admin (?):
AMD is being _unusually_ quiet about their future CPU’s… but part of me fears that they simply don’t/won’t have any large improvements to the basic structuring by the time Merom is released. It’s quite possible that even a quad-core CPU won’t be able to keep up with Merom, but that’s assuming Intel did a very good job (Apparently they let the Israeli team handle most of it’s development… the same people that brought you the Banias and the Dothan, the ONLY CPU’s that have seen a rise in popularity) on it. I mean, throw enough money at it, and SOMETHING is bound to happen, right?
Didn’t realize it was only saying admin for my name so I changed my profile a bit.
You pinned the current Intel situation just how it is. Support will probably grow in the upcoming months, but even now it is a great deal.
As far as AMD’s roadmap goes, this is where it gets tricky. Merom seems to be Intel’s savior, so it seems to me that Intel will take the performance lead if all goes well during development (last I heard the team in Israel was actually ahead of schedule). AMD’s current public roadmap is not only old but very vague so we’ll see if AMD remains competitive.
Hopefully with Merom we won’t have another PIII to P4 transition.
The P3 to P4 transition was rough..switching the package on your CPU in such a way will always be drastic. Hopefully there will be some form of upgrade path.
Well the switch like that wasn’t the biggest problem, it was the fact that early P4’s (willamette) were slower than P3’s (coppermine), even at higher clockspeeds.
How do you promote a CPU that’s more expensive, has expensive RAM (RAMBUS!), requires a new motherboard, and is slower???
Good point. I thought you meant the switch from the slot to socket form factor. The switch to Willamette was defenitely a pain, as many users bought into the hype and got a slower processor, more expensive RAM, and big processor that was very hot (and not the best overclocker either
). Coppermine was a great processor, and won a lot of fan support for Intel in the community at the time. Hopefully Merom will replicate that. Northwood is when the P4 really started to improve.
And Northwood is where the P4 made it’s final push before heading downhill (Go Prescott!)
Also, I pray Intel will wise up on their chipset situation: Every 3-4 months, they introduce a small revision to their CPU’s, and that revision requires a seperate family of chipsets (i915/i925, i945/i955, i975). It makes futureproofing (Pentium D 820, 830 require i945 or higher, Pentium D 840 and EE versions require 955/975 respectively) and marketing a nightmare (I won’t even start on the Pentium M situation), they have a budget/mid-level/enthusiast motherboard for each pair of chipsets. It’s just too confusing to market 30 versions of P4’s (including the various numer suffixes like 530 vs 531, and letter combo’s like 530J, and then you tack on a whole new series, the 6xx) all at once, and 45 different combinations of Pentium M (Regular, Low voltage, Ultra Low Voltage included).
I long for the days of i865, where it was a one-chip-fits-socket situation. nVidia’s nF4 chipset covers any and all Socket939 CPU’s, thankfully.
Intel has to wise up, but I doubt this will happen to be honest. They own their chipset market, a move such as this will break down barriers that competitors face.
That is true, especially considering that nVidia’s first effort into the Intel chipset market hasn’t seen the sucess of nF4 for AMD.
[…] AMD vs. Intel : The Gloves Come Off […]
The reasons for Intel’s much deserved free fall are:
1. The complete failure of the Itanium chip. They have burned millions on this chipset and continue to throw money away.
2. Getting beat in chip design so badly by AMD to the point where software vendors have to warn developers off of Intel processors.
Intel’s problems are more severe than the market has shown and when the day comes that people learn that “Intel Inside” means “problems inside”, Intel will be truly in trouble. That time is probably not far away.
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