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Is Qualcomm the New AMD?
colinneagle writes "It's a darned shame, but the writing is on the wall for AMD. The ATI graphics business is the only thing keeping it afloat right now as sales shrivel up and the company faces yet another round of staffing cuts. You can only cut so many times before there's no one left to innovate you out of the mess you're in. Qualcomm, on the other hand, dominates this space, and it has the chips to back it up. The Snapdragon line of ARM-based processors alone is found in a ridiculous number of prominent devices, including Samsung Galaxy S II and S III, Nokia Lumia 900 and 920, Asus Transformer Pad Infinity and the Samsung Galaxy Note. Mind you, Samsung is also in the ARM processor business, yet it is licensing Qualcomm's parts. That's quite a statement."
Samsung is licensing the SoCs for the US market only. The flagship products (Galaxy S II,III and Note) are all using Exynos for every other market.
...can be answered with a "no"
Qualcomm manufacture ARM chips, like a dozen other companies, there is nothing special about them.
This is explicitly false. Qualcomm designed their own cores that implement the ARM instruction set. They did not license the Cortex A-x designs and glue them together (like every other ARM SoC vendor, including Samsung.) That also ignores the fact that they are the only ones making usable LTE basebands right now. Qualcomm right now is so dominant that if anything, they're the Intel of the mobile world.
Have you looked at Intel CPU prices lately?
Yes. A high-end i7 costs less than my Pentium-4 did last time I built a Windows PC.
Superior now. But when amd were ahead intel bribed the major pc makers not to use amd chips. During that time most of dell's income came from intel payments, for example. This is what destroyed amd since they could and can no longer afford r&d.
http://www.businessweek.com/technology/content/nov2009/tc2009114_975298.htm
The solution would have been for them to pay amd at least 10 billion in damages instead of 1, but that ship has sailed.
I can't speak for other industries, but for the semiconductor industry gross margin is measured as revenue from a chip minus the immediate production costs. For AMD this would be how much they paid GloFo for the chip (or rather averaged across the wafer), plus the costs of testing, assembly/packaging, boxing, and shipping. It does not include advertising, R&D, taxes, etc. And as I stated earlier, R&D is a massive expense. All of those engineers designing the next chip are a huge cost that have to be paid.
You can take a look at AMD's finances first-hand and see how this plays out; AMD has never made a profit with gross margins below 44% or so. Intel would be an even better example: 13.5B in revenue, 3B in net income, and a gross margin of 63.3%. That would put Intel's profit margin at 22% versus their gross margin of 63.3%. Where did all the money go? R&D and fab upgrades. Gross margin only covers your immediate expenses in the semiconductor industry.
They had a faster processor, but that is only one part of the equation. They had two major problems:
1) They didn't offer a CPU/chipset/mobo solution. Intel does it all for customers, they make the entire core if you want. This is useful to OEMs because there's no finger pointing when there's problems. Doesn't matter which of those components is broken, same company is responsible, they need to find and implement the fix. With the Athlons you could have a 3 way pointing match between AMD, VIA, and whoever made the board all claiming the other guy was responsible for a problem.
2) No good chipset. The processor was all kinds of fast but woe betide you if you wanted to use it with, say a GeForce DDR. The VIA chipset that was the "premier" solution for it implemented the AGP spec improperly and wouldn't work with the GeForce card since the AGP slot wasn't really AGP, basically just a fast PCI slot. This wasn't the only problem, just one of the most major ones.
So it is no surprise that some OEMs shied away from them. I built an Athlon system and it was a couple weeks of hell trying to make it work before I found out that no, there was just no way my GeForce would work with it. Back the parts went and in came Intel parts that functioned without error.
Likewise at work we did have some Athlon systems, Gateway I believe, and they were far more trouble than the Intel systems as a whole.
Intel isn't just popular because of the power, but their stability. It matters in business. AMD never really had a competitive solution in that regard.
I'm not saying Intel didn't also try to squash AMD (IA64 was another attempt, since there is no cross licensing for that instruction set) but AMD did little to help themselves. They produced a good processor without the hardware to support it.
Then they caught another break, with the fuckup that was the P4, but they rested on their laurels and didn't really do much in the way of architecture updates. Intel hit back with the Core 2, then Core i, then Sandy Bridge all of which are stellar performers per clock and there was just nothing new from AMD, until now Bulldozer which is pathetic, worse than their old chips at times.
Intel is not blameless, but AMD has done themselves few favours.