Xilinx and AMD: an Inevitable Match?

itwbennett writes: Steve Casselman at Seeking Alpha was among the first to suggest that Xilinx should buy AMD because, among other reasons, it 'would let Xilinx get in on the x86 + FPGA fabric tsunami.' The trouble with this, however, is that 'AMD's server position is minuscule.... While x86 has 73% of the server market, Intel owns virtually all of it,' writes Andy Patrizio. At the same time, 'once Intel is in possession of the Altera product line, it will be able to cheaply produce the chip and drop the price, drastically undercutting Xilinx,' says Patrizio. And, he adds, buying AMD wouldn't give Xilinx the same sort of advantage 'since AMD is fabless.'

Comments

Re:Slow news day

[ArcadeMan]

Maybe systemd could buy AMD?

Not a match - here's why

[StandardCell]

The Intel-Altera deal, while beneficial for Altera shareholders, is not any kind of huge win for Intel. Intel was already Altera's fab partner, and there's very little incremental revenue compared to the cost. $2B/year for a $17B acquisition, even at a modest discount rate, is a questionable ROI.

The reason is that this deal is questionable is that system design considerations vary considerably, and a fat CPU like an Intel Xeon is not always the best match for a networking application with an FPGA that close. Most of these server-side applications are, in any event, I/O bound in a server environment. That means fast backplane technologies for interfacing the various physical layer devices for networking and storage. Integration of programmable logic rather than putting it on a daughter card with a dedicated interface defeats the purpose of the flexibility that the FPGA provides in this environment, and that's to be able to bridge new and emerging standards while standard products eventually come in and take up the slack. Too little programmable logic and you have to replace the entire part. Too much, and you're killing your margins even now that gates are supposedly "free". Why would a system architect bother taking the risk on that without substantial advantages over the lifetime of their rack-mount beast? And this is essentially true whether or not the die is integrated or put in an multi-chip module or 3D die stack. Even if we consider other applications such as artificial intelligence and image processing, there are already alternatives out there including dedicated processors and GPUs that are doing much of this today, and they're off-the-shelf parts without dependency on the host CPU which - again - would be an I/O bound operation that you wouldn't necessarily want to involve the CPU in directly.

Bringing this to Xilinx, AMD - as the article suggests - has even less presence in server. More importantly, AMD is always 1-2 generations behind in process technology versus Intel, which translates to even greater sensitivity to how much FPGA one devotes to the die. There is no Xilinx fab relationship with AMD since it's effectively fabless. Xilinx and Altera also play in other spaces where x86 is either not relevant or insufficiently so to justify integration (e.g. automotive, broadcast). All of the above points for Intel-Altera apply even more for AMD-Xilinx.

Even in 2015, we're still dealing with external GPUs and Ethernet PHYs on small motherboards. Unless an application reaches true ubiquity and the cost-benefit is clear, integration for integration's sake is a losing cause. If Xilinx and AMD merge, it may very well hurt both companies. Stay tuned.

Quick! Let's copy Intel's stragety

[OrangeTide]

And when it fails, we can blame Intel for going out of business.

The point is, Intel plays by different rules and their Altera purchase represents a smaller percentage of their total worth. But the most important reason you shouldn't copy Intel is if there is an x86+FPGA market, you will never be able to beat Intel at it. If Intel wants your niche, they will take it from you. If Intel has already moved there before you even started, now you don't even have the ability to establish a new market, losing the only minute advantage there is.

I recommend trying to come up with a new idea that Intel isn't actively pursuing. Get some customers and lots of patents, then when Intel wants to take it from you, they at least have to do some costly patent settlements.