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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!!!!
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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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.
Galileo: "The Earth revolves around the Sun!"
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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
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.
Iraq: war to save the U
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.