AMD Back in the Black

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Posted by ryuzaki0 on Monday February 16, 2004 @12:38AM from the hurray-for-competition dept.

XaXXon writes "CNN reports that AMD had a profitable quarter for the first time in over two years. According to the story this is mostly because of their 64-bit line of chips (both Opterons and Athlon-64). AMD has forced both HP and Intel to change long-standing plans of only supporting Itanium, with HP coming out with Opteron-based systems and Intel releasing chips mimicking the 32/64-bit behaviour of the Opteron. According to the story, 64-bit processors are better than 32-bit ones because 32-bit processors 'can't take advantage of more than 4 megabytes (sic) of memory at a time.'"

25 of 359 comments (clear)

Profitable by 0mni · 2004-02-16 00:39 · Score: 5, Insightful

I guess its easy to understand that AMD would be running in the red, its prices are really quite low. Even with small production prices I couldnt imagine there would be too much profit for them.
1. Re:Profitable by Anonymous Coward · 2004-02-16 00:42 · Score: 5, Insightful
  
  They haven't been that low for the last couple of years. I remember a time when every AMD CPU cost about half of what you paid for a comparable Intel.
  Heavy investing and comparably small market share would have more to do with the losses.
2. Re:Profitable by betelgeuse-4 · 2004-02-16 00:50 · Score: 5, Informative
  
  When I went to nanotech lab open day, one of the speakers said that 98%-99% of the chips on each wafer must work for the CPU company to make a profit.
  
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  Decode these
3. Re:Profitable by Loki_1929 · 2004-02-16 04:18 · Score: 5, Insightful
  
  "According to this article in Toms hardware,"
  
  I can't believe anyone still reads that rag. Let me give you a hint: Tom's was bought and sold about 3 years ago. Since that time, it has descended to the ranks of online propaganda host for Intel and a number of other companies. Tricks with driver versions and other such foolery causes them to get benchmark results drastically different from those of almost every other hardware site. No one's bias is more apparent than Tom's himself. Many of the conclusions to their own articles are non-sequitur, and the articles themselves are often little more than a press release for the company doing the most advertising at the time.
  
  The few folks left defending Tom's tend to either be Intelbots or those who like to feel they know something after having read a few dumbed-down for-public-consumption articles from the site. To quote them is to invite laughted upon yourself. You would do well to visit other sites instead for your hardware news. Anandtech, Ace's Hardware, and plenty of other sites provide good, in-depth and trustworthy analysis, as opposed to operating a propaganda machine designed to rake in cash.
  
  "prodution yield is about 30%, it it expected to rise up to 60% after two years of production CPU's are just too complicated to be produced with yield of 98%-99%."
  
  But I say that production yield is about 80%, and is expected to rise up to about 95% after three months. And best of all, I can make up numbers and formulas to make it look very official and correct. When I see Tom in a 'bunny suit' on AMD's FAB floor, I'll believe their 'analysis' of production yields. Until then, he's making up numbers and statstics, adding to the other 73.4% of statistics that are already made up.
  
  The quote from the article, which you have parroted here, is as follows: "However, we doubt that AMD's yield will be any more than 30% - this is based on information from other chip manufacturers that use similar processes."
  
  Now, let's put a little bit of brain power into dissecting this, shall we? First of all, the whole thing is rather vague - using words and phrases like 'we doubt' and 'similar processes'. Secondly, these so-called 'other chip manufacturers' aren't even named. Are they talking about IBM? Or are they talking about 'Phil's CPU FAB', which is run out of a basement in a townhouse in Idaho? Just what are 'similar processes'? Is there someone else making Opteron and Athlon64 CPUs? Someone really ought to tell AMD about that. Or perhaps they're referring to the 130nm 'process', which describes almost nothing about the chips themselves? Maybe they're even talking about the 'process' of getting from wafer to die. Well, so far as I, or anyone I've ever talked to knows, AMD didn't go out and re-write the book on die construction with the K8. The 'process' of getting from wafer to die for K8 isn't that much different from that of K7. I would assume then that Tom's is also asserting that Barton and Thoroughbred yields are also a mere 30%. Or perhaps there's an entirely new made-up number for their yields.
  
  It's amazing how you can throw a few numbers onto a website and everyone will believe you. It's almost as amazing that throwing a few numbers into a post will yield +4 Informative.
  
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  -- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
Does AMD have anything to compete with Centrino by MountainMan101 · 2004-02-16 00:43 · Score: 5, Interesting

They're chasing big boys market at the moment with 64-bit, but do they have something for the laptop market to match Centrino.
You can't compete if you're bleeding by ObviousGuy · 2004-02-16 00:43 · Score: 5, Insightful

I'm glad to hear this kind of recovery by AMD. Not only for the employees of AMD who won't have their lives disrupted by layoffs, but also for the stockholders who can reap the benefits of a company that is now making money.

What's more, it forces Intel to compete against a competitor that can actually put extra top line money towards research and development. Everyone wins when companies can compete.

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Go, Go AMD by JamesP · 2004-02-16 00:44 · Score: 5, Interesting

Way to go AMD. Intel is eating dust on this one...

The problem is, Intel went from an Engineering company to a marketing company. Let's just hope it doesnt became a lawsuit comapny...

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1. Re:Go, Go AMD by AndroidCat · 2004-02-16 00:57 · Score: 5, Insightful
  
  AMD won't have won until Intel starts rating its processors in "equivalent Athlon64 performance". ;)
  
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Thanks for clearing that up by Anonymous Coward · 2004-02-16 00:48 · Score: 5, Funny

Do you also explain jokes to people after you tell them?
Congrats by Killjoy_NL · 2004-02-16 00:48 · Score: 5, Insightful

Congratulations to AMD, they've been more innovative in the CPU market than Intel (which is a big feat in my book)
They've also setup a big solid state memcard department (I'm dutch and can't remember the correct name for it right now) which is running along nicely as well.

I hope they can continue keeping up the good work, they deserve it.

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1. Re:Congrats by Plammox · 2004-02-16 00:57 · Score: 5, Insightful
  
  Face it. AMD and Intel need eachother. For me it's a sign of health that Intel's roadmaps are affected by AMD's moves and vice versa.
  
  It's easy to imagine how Intel or AMD products would be more inferior due to lack of competition.
2. Re:Congrats by Killjoy_NL · 2004-02-16 01:06 · Score: 5, Insightful
  
  I don't mean to give them a +1000, Innovative.
  +500, sure :D
  
  They designed a cpu that's a much better workhorse than that of their competitor (Athlon), then they did it again (AthlonXP) and again (Opteron/AMD64)
  
  That's innovation from where I'm standing.
  I know Intel has a lot more different products, but they use those products more as cashcows, trying to milk as much money from it as possible before the market demands something new.
  
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  This is the sig that says NI (again)
In related news by Anonymous Coward · 2004-02-16 00:51 · Score: 5, Interesting

AMD has made deep cuts in their CPU prices, probably pre-emptively.
The metric system can only simplify things so much by MukiMuki · 2004-02-16 00:51 · Score: 5, Funny

In other news, the DVD consortium has finally approved a standard of blue ray disc drive, which allows optical media to break DVD's 18 megabyte barrier, finally allowing for movies times exceeding 10 seconds.
AMD have been better than Intel for some time... by mu-sly · 2004-02-16 00:52 · Score: 5, Insightful

...however, it's not about better products, it's about mindshare of the buyers.

I've been building PCs for quite a few years now, and have nearly always used and recommended AMD processors over Intel. In my opinion, AMDs cost less, often outperform their Intel equivalents, and lead the way when it comes to new innovations.

I guess the reason they don't have a bigger market share is because a lot of the OEM companies only sell Intel, and because Joe Public only knows about MHz as a measure of speed.

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Re:Intel, 32x64? by sbennett · 2004-02-16 00:54 · Score: 5, Informative

See this. Of course, there were the standard rumours going around before Prescott's launch that it was going to have a 64-bit layer, but that didn't happen.

What I find interesting is that Intel said before Opteron's launch that they weren't going to make any form of 64-bit x86 processor, and now it's on the roadmap.

Earlier this week, Intel's President and COO, Paul Otellini, confirmed in a web-cast interview that a move into the 64-bit desktop market was certain, but that the company would nevertheless wait for the arrival of operating system and application support. "You can be fairly confident that when there is software from an application and operating system standpoint, we'll be there," he said.

You mean once the OS and application developers have started using AMD's 64-bit extensions, Intel will come up with something to compete?
Main Reason for profitability by MadX · 2004-02-16 00:54 · Score: 5, Insightful

As long as they have a product that their rivals cannot compete with, they can keep the prices at a premium.
Hence, until such time as Intel release a competitive product, AMD can enjoy high profit margins.
This will change once Intel do release their competitive product though.

BTW: As was said in the article, the other arm of AMD's fabrication was also responsible for their profits ie: flash memory for cellphones. It's only because they have a majority stake in the joint venture with fujitsu, that they are able to declare the income as part of their overall turnover.
Irony by Killjoy_NL · 2004-02-16 00:57 · Score: 5, Funny

"and Intel releasing chips mimicking the 32/64-bit behaviour of the Opteron"

Does anybody else see the irony in this ?

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This is the sig that says NI (again)
Re:AMD HEAT PROBLEM by dave-tx · 2004-02-16 01:02 · Score: 5, Interesting

The K6-II+ and K6-III+ are fantastic processors for low-heat applications, because they were intended to be used in notebooks. I ran my email/web/firewall on a K6-III+, overclocked to 550MHz, for years. It was cool, quiet, and so freakin' stable that I would reboot it every couple of months just for kicks.
On the other hand, I had a dual Athlon-MP machine that was like an oven. Really nice computer, but it had to go, because it made my computer room too hot.
I, too, am looking forward to an Opteron-based system in the future. As a former AMD employee, they'll always have my financial support as long as they continue to produce innovative products.

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>> "What would the robut do? Frame someone!"
Re:4gigs of ram by AndroidCat · 2004-02-16 01:05 · Score: 5, Insightful

You can address more than 4 gigs of ram with an 8 bit processor. That doesn't mean that the result is pretty or that you should do it.

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The reason you don't want socket 940 by ColourlessGreenIdeas · 2004-02-16 01:06 · Score: 5, Informative

Socket 940 arranges the pins so that it's easy to lay out multiprocessor systems with a 6 layer motherboard (expensive, but you'll want it in a server anyway for reliability reasons). Sockey 939 (real soon now) will work with 4-layer motherboards and so will result in cheaper systems. Both the Athalon 64 and Athalon FX will soon be socket 939, differentiated by the ammount of cache. Opteron will remain as it is, as otherwise your 4 and 8 way boxes won't work. Given that Opteron 8xx is absurdly cheap compared to any other 64 bit 8-way server, I can't see why AMD would want to lower prices.

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Re:AMD have been better than Intel for some time.. by dave420-2 · 2004-02-16 01:30 · Score: 5, Funny

Using terms like "versatile" and "nimble" to describe a CPU makes me slightly wary of the rest of your point ;) What's next, "majestic" RAM? "enigmatic" GPUs? :-P
AMD Athlon Processor Build & Installation Guid by Futurepower(R) · 2004-02-16 01:56 · Score: 5, Informative

Haven't seen any problem with AMD processors. It's necessary to follow the Cooling Guidelines, of course.

Make sure you have a good power supply. We use KingWin 350 Watt supplies that have two fans. (Ignore the language, "Extreme Series". That's there just to appeal to gamers, who expect every product to include some reference to violence or games. There is nothing extreme about them, and they are reasonably priced.)

Note that power supply manufacturers sell power supplies that have 100 Watts more rated power for sometimes close to twice the price. That's to take advantage of the "more is better" people.
Re:AMD have been better than Intel for some time.. by Glock27 · 2004-02-16 02:49 · Score: 5, Informative

They don't have a bigger marketshare because even though the chips perform well, their construction hasn't (in the past) been up to that of Intel. Take, for example, the cooling required for AMD chips. Compare it to that of their pentium equivalents. When said cooling falls off (or stops working) - the pentiums don't burst into flames. That's the difference - higher manufacturing quality.
Modded +5 Insightful? Now that shows the weakness of the Slashdot moderation system...
Athlon, Athlon 64 and Opteron all have thermal protection, just like the P4s...and have had it for some time.
Further, current P4s dissipate more power than the AMD solutions, due to high clockspeeds that don't equate to better performance except for a slight edge in multimedia codec performance.
In short, at this point AMD is flat out better - and a much better deal to boot. You can pick up an Athlon 64 3000+ for about $210...that's a steal!

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Re:this isn't exactly correct.... by Slugworth01 · 2004-02-16 03:01 · Score: 5, Informative

Neither statement is exactly correct. The economics of semiconductor manufacturing are pretty complex. You typically have a certain set of variables to work with. You can invest in line yield, process quality, new processes, automation, capacity, marketing, new device design, retooling, and any number of other areas. You can build cheaper, less complex fabs, build in locations with cheaper labor rates or lower startup costs. You can outsource some or all your manufacturing to a foundry who can make your designs for a contracted price.
AMD has an approach that says they will "build smarter" than their competition. Their flagship fabs (Fab 30 in Dresden, for example) are highly automated with very tight process control, ensuring the right work gets done at the right time. The focus is on equipment utilization; reduction of tool idle time. Further, they focus on minimizing the number of non-product wafers in the line, which take tool time but don't directly produce any chips that can be sold. The management of all this is done through software.
They also have to focus on fab uptime ... since they don't necessarily have the back up manufacturing capability to allow them to recover if their fab is down. For example, AMD makes about two-thirds their revenue from processor sales according to a recent 10-Q filing. Most recent quarter for which there is data (for the period ending 12/28/2003) shows $1,205M in quarterly revenue. You can estimate around $800M in revenue from their processor lines. Fab 30 make nearly all their processors. If Fab 30 were to go down for one hour, that's one hour in the 730 hours in a quarter that they can't make chips. If they have demand that is greater than or equal to capacity, and they're running at full capacity, they would loose roughly $1M due to potential finished goods that could not be made. A cost of $1M per hour of fab down time is pretty typical in the market where AMD competes and for fabs that compare to Fab 30.
A single tool going down is a problem. The entire fab going down is a huge problem. Things that can bring an entire fab down include utilities (electricity, water, gasses, etc.) contamination of facility-wide services like vacuum line, DI water, and various gasses, labor strikes, natural disasters, fires, and plant-wide software.
When you rely on software to manage your manufacturing to the degree that AMD and other high-end semiconductor manufacturers do, you tend to pay a lot of attention to the software.