Slashdot Mirror
AMD, Nvidia Reportedly Tripped Up On Process Shrinks
itwbennett writes: In the fierce battle between CPU and GPU vendors, it's not just about speeds and feeds but also about process shrinks. Both Nvidia and AMD have had their move to 16nm and 20nm designs, respectively, hampered by the limited capacity of both nodes at manufacturer TSMC, according to the enthusiast site WCCFTech.com. While AMD's CPUs are produced by GlobalFoundaries, its GPUs are made at TSMC, as are Nvidia's chips. The problem is that TSMC only has so much capacity and Apple and Samsung have sucked up all that capacity. The only other manufacturer with 14nm capacity is Intel and there's no way Intel will sell them some capacity.
NVidia has always been fabless, but AMD owned its own fabrication plants until a few years ago... when they were spun off into a separate company called Global Foundries.
This sig left unintentionally blank.
And get owned by intel's illegal monopolistic deals with OEMs?
Been there, done that. Signed: AMD.
Build your own fab
AMD did exactly that. Intel responded by raising their prices and offering "discounts" to vendors in exchange for refusing to stock any AMD products, ensuring that AMD's production capacity was wasted because customers found it incredibly difficult to find anyone willing sell them (despite having a large performance, price and temperature advantage over Intel at the time). AMD took Intel to court over this and won, but Intel managed to drag the case out so ridiculously long that AMD weren't able to keep their foundries. Their R&D took a big hit too.
Actually oil companies have been exporting crude products abroad (They still can't legally export unrefined crude oil) for a few years now because they can make more selling them in other countries. In fact this past June some restrictions were lifted and they started exporting unrefined ultralight oil
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
I read an interview of John Sculley, ex Apple CEO, 10 years after he left Apple. (There is a link to it somewhere here on Slashdot. ) He said that one of his great mistakes was to choose Motorola's PowerPC RISC chip over Intel's x386 design. All of Apple engineers pulled for the Motorola chip, pointing to its better architecture. And it was true, for a given bit of silicon Motorola was better than Intel.
Except that Intel's fabs were so much more efficient than Motorola's, they were able to deliver more powerful chips at a cheaper price even with poorer design. Which allowed them to make fat profits, which they plowed back into newer fab plants, which let them sprint past Motorola.
As of September 2014:
-AMD's available cash: $950 million
-AMD's market capitalization: $2.6 billion
-AMD's credit rating: Absolute garbage
-Cost of a new Intel/TSMC style fab: $7 billion - $10 billion
It's a nice thought, but the reason that so many companies, including huge companies like Apple, IBM, and Qualcomm, have gone fabless is that fabs are astonishingly, mind-blowingly, expensive.
Maybe yes, maybe no.
Fabs are incredibly capital intensive. If you build one you sort of need to run it at full hilt to make money off of them. And then you are on the tread mill of always having to build another one to have the latest and greatest.
I am not saying they should not build it, just that it is a completely different beast then design and marketing of their chips. You can't do it half way. FYI, almost everybody agrees that the reason why the x386 dominates today is not because Intel had the best or most efficient designs for microchips but that it had the best run and most efficient fabs. Intel has publicly said it want to be the "McDonalds" on the CPU world – standardized and cheap.
Are AMD and Navida ready to bit off such a big chuck? I doubt it.
Fully agree w/ this - it costs a ton of cash to just build the fab, then quite some time before they are in full production, and only after they've run for a few years and been depreciated that their products are profitable. By then, it's usually time to shrink, but by now, at ~15nm, there ain't too much scope for that.
But in addition to that, the costs of running a fab are recurring - even if there is no demand for a product, the fab has to be kept running, thereby piling on inventory. Which is a good reason why a lot of companies either started of as, or later became, fabless. The only one who is profitable is Intel, as a result of being a full 2 generations ahead of the competition. Reason? Because they make volumes of products that they can sell in the market profitably, thereby enabling themselves to put in a whole ton of cash into newer fabs, better equipment and everything else geared towards process improvements.
Try reading how Intel paid Dell billions in cash to not use AMD chips. Mike Dell actually wanted to go with AMD, but Intel's massive cash infusions proved too delicious to ignore.
AMD did not own the sever space. With the introduction of AMD64, they had superior CPUs. However, thanks to intel's illegal monopolistic deals with OEMs they didn't get the sales and profits to plough back into R&D and sustain their technical lead.