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Intel to Spend $2B To Stay In The Game
hexed_2050 writes "AMD has declared dominance in the gaming and server microprocessor market in 2004, and Intel needs to respond.. fast! This is why Intel has planned to spend 2 billion dollars to upgrade their eight year old, Fab 12 plant in Arizona. "Part of what I do is put the emphasis on how fast we respond," explains Robert Baker, Intel's top manufacturing executive."
I remember back when AMD announced a 64 bit desktop CPU. The common consensus was that they were completely daft, and other than the rabid early adopters who buy anything... it wouldn't do all that well, given that PCs are still tied to 32 bit software.
Now fast forward a year or two, and AMD is on top, and Intel is trying to play catch up. I never would have dreamed this would happen. I really have to tip my hat to AMD.
People that are anti-bush administration like to say its a negative thing that he is "letting" it fall, but really his economic team has been purposely talking down the dollar for years, its a sneaky way of fighting outsourcing of jobs and the trade deficit, because asian currencies are pegged to the dollar, and they are so heavily invested in it, that they either need to float their currencies (to curb inflation) or invest in more dollars to keep the dollar value high. Its a win-win for America and and a lose-lose for the developing world which is overly dependant on the dollar, and the low exchange rate.
is Intel resigned to only "respond" to AMD from now on, never to lead again?
Intel's problem isn't how fast they respond but rather something else entirely: a patent.
That patent is Silicon on Insulator. It is owned by IBM. AMD has been using it some time now and it has allowed their processors to use less power than with conventional silicon. It is rumored that Intel approached IBM in order to license this technology but that IBM wanted to trade tech instead of making a cash deal.
So Intel is playing some cat and mouse with IBM. Right now, the IBM guys are probably laughing at the power consumption of Intel's processors - they're winning. So, in the near future, when you see that Intel has licensed a pretty bit of their technology to IBM, don't be surprised. Intel needs SOI and they're going to pay dearly for it.
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They aren't "staying in the game", they are the game.
Wake me when AMD provides complete solutions, chipset, motherboard, with integrated audio and video.
Intel is upgrading because 8 years is a long, long time for a modern chip fab. The "we'll make chips cheaper than AMD" crap is just investor PR.
AMD is only a threat to but one small fraction of Intel's business.
I don't need no instructions to know how to rock!!!!
For my accounting class, I did a financial comparison between Intel and AMD, and the results were quite shocking. I'd never bothered to look indepth at financial statements until then, and I'm amazed that AMD is still going despite having trouble posting a profit. While AMD may be in the lead technologically, the company is still a financial basketcase. The question is whether AMD has the ability to parlay it's lead into actual monetary gains.
AMD got the lead because they offer better performance for the same price or better price for the same performance (or somewhere inbetween). Intel WON'T win the race by spending more money on much faster, much stronger and much more expensive hardware. Do you think they will let these $2B just evaporate? They will try to get it back in processor prices. And that's their way to failure.
Other thing besides competing in CPU prices Intel could do would be to remove overclocking cap (say, by overclocking you void warranty, if they want to protect themselves from people who burn their CPUs) and possibly limit other such monopolist practices that people just perceive as customer-unfriendly.
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The only reason I buy AMD processors is because they're cheaper than Intel for the equivalent processor speed. If Intel wants my business back, they need only lower their prices below those of AMD.
Plus my system has been unstable for a long time and I am afraid my AMD cpu or motherboard may be to blame. Perhaps that fear is unfounded... I don't know... But peace of mind is worth something, and I have never had any reason not to have faith in an Intel CPU.
Interesting to see how an Intel employee is now deriding higher-performing AMD CPUs as "about gaming" and basically implying Intel doesn't care about that "boutique" market.
And to admit Intel's all about marketing labels like MHz instead of true processing power (derogatorily refered to a mere "fps" here....).
Yeah, Intel's "adapting to the overall MARKET" - with an admitted marketing strategy centered on the fact their clock just happens to spin around a bit faster than and AMD clock.
Boy, all the words like "boutique" and "niche market" and "adapting to the overall market" make me feel like I've just seen a marketing droid's powerpoint presentation....
I call BS. Intel has plenty of resources to go after all kinds of different markets. Further, AMD chips do better at many other kinds of applications. Even further, Intel went so far as to rebadge very expensive Xeon chips (Pentium 4 Extremely Expensive Edition) to go after the "unimportant" gaming market. Finally, for most server usage, Opteron vastly outperforms Xeon, especially for multiprocessor servers.
Sure, the world of processors is changing, but Intel is adapting to the overall MARKET, not merely to AMD's strategies and successes.
I hope your company has a high rate of adaptation, it'll need it.
Side Note: How come you anti-globalization folks aren't applauding Intel for expaning a facility in the USA? Hmm? Where are AMD's chips made again?
Yes, that's nice, though I'm quite sure Intel made the decision based on dollars and cents rather than any warm-and-fuzzy pro America sentiment. Good PR doesn't hurt either - and Intel could sure use some. ;-)
It should also be pointed out that AMD could soon be manufacturing chips in East Fishkill, NY if Forbes is right.
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I think they might respond by pulling legacy 16-bit support completely out of their chips (which I'm led to believe is costing them about 30% of their chips' "capacity" (as measured by power consumption and real estate) and replacing it with an emulator. While that might be a hugely controversial step, Microsoft took a similar leap when they jumped to 32 bit operating systems, and it proved to be pretty much a non-issue in the marketplace.
I mean if the original application was designed for 16-bit operations, it was designed for a computer that is far slower than an emulator on a modern processor. So, if Intel chucks that deadwood and goes completely native 32 or 64-bit, they can add more performance enhancements by using that reclaimed power and nanoacreage. They could even put the 16 bit emulator code in ROM on the chip somewhere (that should be a much smaller footprint than logic circuitry.)
I'm pretty sure that once Intel pulls some more magic out of their hat, they'll be on top again. (And Intel is really, really good at finding magic in hats.) What I am sure of is that we (the consumers) will be the victors, 'cuz we'll get some really sweet chips out of the deal.
John
So.. they can make more chips faster, that is, the same more expensive slower Intel chips.
How is having more stock sooner of chips nobody wants going to give them dominance?
All the more reason to become less reliant on middle eastern oil!
Though i'm not sure how easy it would be to switch to petro-euro, because although the euro is attractive now, the EU is used to running at trade surpluses, but if the euro stays so high they will begin to have trade deficits, which would cause a larger european economic problem. Also the dollar is still the worlds reserve currency. Although your conspiracy theory in that link is interesting, I think you overestimate the oil-lobby vs all the other lobbies in America. Plus China is the fastest growing user of oil, and the US is declining in its oil usage, so it all comes back to my original comment that if china doesn't float their currency they would be even more hurt by a switch to petro-euro then we would, which i doubt OPEC would allow.
Innovation? I don't think on AMD's part there was a TON of innovation behind the AMD64.
Read some of the technical documentation behind the two 64bit processors each put out. Intel's IA64/VLIW architecture is much more technologically impressive than AMD64's.
What made AMD64 so great was the fact that it stayed so true to the x86, it's almost like a souped up version. It's backward compatible and if you do any assembly/hardware stuff, it tends to be very similar. So much in fact that you still get many x86 annoyances while dealing with it.
So, I'd say Intel was more innovative... they just didn't have the right idea when making a 64-bit chip anyone could actually use. AMD64 is nice and all, but it makes me think that in 10 years, we'll be saying "x86-64 needs to die like x86". It wasn't innovative enough.
If you say "here goes my karma" I will bite you!!!
Geee...lets see: Intel has 85% market share and has a market cap of over 10 times that of AMD. Intel operates at a profit margin of 22.68% whereas AMD is at 2.89%. And yet the fanboys are declaring "AMD's dominance". How pathetic. Wake me up in 2015 if AMD still "dominates".
Maybe the fanboys should compare some basic financial statistics of Intel and AMD. This stuff doesn't change overnight.
Also the dollar is still the worlds reserve currency.
This is changing too, and this is very bad for the US too. 2 weeks ago China said that they were now getting Euros along with Dollars as their reserve currencies.
Russia and North Korea did that too. If this trend amplifies, be ready for a huge inflation in the US.
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"Part of what I do is put the emphasis on how fast we respond," Frist upgrade in 12 years, yeah man, way to respond fast. Maybe if the plant was upgraded 4-5 years ago when AMD first started digging into their market share, then maybe they would stand a chance.
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Side Note: How come you anti-globalization folks aren't applauding Intel for expaning a facility in the USA? Hmm? Where are AMD's chips made again?
The manufacturing part of the whole process doesn't reel in the profits. The real profits to be made come in the designing part. And as far as I know most of the AMD chips are still designed here in the states.
Next thing you know anti-globaliztaion people will start complaining that the silicone isn't mined in the good ol' USA.
Come to terms with the world economy, the U.S. is shifting from an industrial economy to a service economy.
Besides those plants abroad that might be leaking tens of millions in labor a year are dwarfs compared to the 4 billion in wealth it has created for the stock during the last year.
The reason I'm looking at AMD for my next upgrade is price. I simply get more for my money with AMD than with Intel.
Intel's spending 2B to upgrade its facilities, but who's paying? We are, that's who. So if chipset prices go up again, AMD will still be on top for the cheapskates among us.
Mercy was given to me by Christ...I must give the same to others.
They didn't "let" prices go up this year. The prices went up because of speculation over political instability in Venezuela, Russia, Iraq, and Nigeria affecting output. It got to the point where the various OPEC nations were pumping veritable crap out of the ground (stuff that has less of the useful hydrocarbons) in order to boost the overall numbers to try to push things down. OPEC knows it has a PR problem, since it's seen as a bunch of money-grubbing sheiks that only want to bilk the world for cash. Quotas were set as high as the nations could reasonably pump, and some nations even went higher, risking damage to equipment, in an attempt to push things down.
Of note to the conspiracy theorists is that prices didn't start dropping until well after the election was over, although many were predicting an October surprise with OPEC providing some massive drop in oil prices. In spite of their views, the prices continued reaching record levels, and it wasn't until news came that oil consumption in China was being slowed by additional tariffs Beijing placed on imported oil in an effort to slow consumption growth, followed by word that US oil use was down and that on-hand stocks were growing, that prices began to come down.
OPEC is happy when oil is around the $35 per barrel range. It's not so expensive that they get slammed in the press, and not so cheap that they make no money.
You can never go home again... but I guess you can shop there.
When XBox 2 comes out neither Intel nor AMD will be the main players in the gaming market. The main players will be IBM, NVidia and ATI.
be ready for a huge inflation in the US.
Be ready? It has already arrived! Gas is 120% higher than in 2000, housing 15-100%, postage up 25%, milk up 30%, most vegetables up 20-30%, whole chickens are $2.00/lb... We're in an expensive war in the middle east and local taxes are skyrocketing...
Inflation is here already, but has been "adjusted" away in the CPI.
Soon enough it will become affordable to manufacture things in the US again, and the new Chinese industry will be bankrupted by currency swings.
Conformity is the jailer of freedom and enemy of growth. -JFK
Google for "currency" "pegged to the dollar" will give you many articles to read on the subject.
I have to ask...how often do you multitask CPU-bound tasks? That's the only place that HT helps performance, and it actually hurts performance on some apps. Computers have been comfortably multitasking since long before HT, and AMD chips do fine at it. Lately I've been ripping CDs, listening to MP3s and programming on an Athlon XP 2600+. It works great, nice and smooth.
In short, you've fallen hook, line and sinker for Intel's marketing pitch. Congratulations.
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Oh, nonsense!
Intel's IA64/VLIW architecture is much more technologically impressive than AMD64's.
No matter how technologically impressive Intel's architecture is, right now AMD is managing to get almost twice the work out of every clock cycle that Intel is. I'd call that innovative!
VLIW architecture has many advantages, but they almost all relate to processor design and silicon real estate savings, not the final performance in a real system. In terms of code memory efficiency and branch prediction failure penalties, VLIW causes some real performance hits.
It's backward compatible and if you do any assembly/hardware stuff, it tends to be very similar. So much in fact that you still get many x86 annoyances while dealing with it.
Two points:
1. that backwards compatibility is a real advantage right because of all the legacy code that current systems simply have to run right now.
2. whether you agree with it or not, most work nowadays is done in high level languages, specifically C and C++. Most people that have to deal with assembler are compiler writers. Once the work on the compiler has been done, other advantages of the x86 architecture (the biggest that comes to my mind is code space efficiency) are immediately available to highlevel language coders without any of the annoyances you mention.
There's money to be made in gaming chips, sure, but not all that much compared to corporate desktops and laptops.
That seems to be Matrox's theory also (younger people here might be asking who the hell is Matrox?). I wonder if it's working for them.
The big thing I'd add here:
frontiers. If you have a viable frontier, immigration can be much more beneficial. If you have immigration without a frontier, and with a social welfare state, you have a giant contradiction.
The US elites have turned their back on frontiers-and have as you pointed out fallen in love with imperialism and slavery.
I looked at the link. It referred to a very simplistic "immigration good or bad" type of poll. The writer of the piece nicely mixes up the 9-11 terrorists with people from Latin American who come to America... to work.
Don't blame Durga. I voted for Centauri.