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'We've an Unexpected Manufacturing Advantage For the First Time Ever': Intel's Manufacturing Glitch Opens Door For AMD (theinformation.com)
Over at The Information (paywalled), reporter Aaron Tilley has a splendid interview of Forrest Norrod, a senior executive who joined AMD four years ago. Mr. Norrod describes the challenge AMD has faced over the years and how, for the first time ever, it sees a real shot at making a significant dent in the desktop market. From the report: Advanced Micro Devices' battle with chip giant Intel has often seemed like a gnat fighting an elephant, with AMD struggling in recent years to gain even a tenth of the market for the chips that power PCs and data center servers. Forrest Norrod, a senior executive who joined AMD four years ago, says the company suffered from "little brother syndrome" where it tried and failed to compete with Intel on lots of different chips. Now, though, AMD may have a shot at coming out with a faster, more powerful chip than Intel for the first time. Intel in April said it was delaying the release of a more advanced chip manufacturing process until sometime in 2019. AMD has its own new, advanced chip, which it will now be able to release earlier than Intel, potentially giving it an edge in the market for high-performance chips for PCs and data center computers.
It's a market opportunity worth around $50 billion. That's what Intel makes from selling chips for PCs and data center servers, and it dominates both markets. The data center market is particularly important because of the growth of new technologies like artificial intelligence-related applications, much of which is handled in the cloud. Companies that buy chips for data centers or PCs could gravitate to AMD chips as a result of Intel's delay. "I think we have a year lead now," said Mr. Norrod, who oversees AMD's data center business. AMD now has "an unexpected [manufacturing] advantage for the first time ever," he added.
It's a market opportunity worth around $50 billion. That's what Intel makes from selling chips for PCs and data center servers, and it dominates both markets. The data center market is particularly important because of the growth of new technologies like artificial intelligence-related applications, much of which is handled in the cloud. Companies that buy chips for data centers or PCs could gravitate to AMD chips as a result of Intel's delay. "I think we have a year lead now," said Mr. Norrod, who oversees AMD's data center business. AMD now has "an unexpected [manufacturing] advantage for the first time ever," he added.
K8.
Intel tried to make its next chip in Bangalore and screwed up so the K8 Opteron was a better chip and for a year AMD was the darling of the markets.
Intel caught up and ate AMDs lunch. AMD instead of using the windfall from the Opteron to build a sustainable chip pipeline (3-4 chips in dev instead of 1-2) used the moeny to buy ATI.
People in the CPU div were pissed when the 40 dollar RSUs went to 3 dollar.
But with AI and computation shifting more towards GP-GPUs than CPUs the ATI purchase has now started to payoff.
**Life is too short to be serious**
There's a lot more to it than that. AMD had far better chips for just over 6 years but Intel had a huge head start in terms of brand recognition and market share, as well as far more fabrication capacity. While their market share dropped over the years as people discovered that AMD CPUs were faster, more reliable, ran cooler and cost less all at the same time, Intel used every dirty trick they could to keep AMD from growing. Despite that, AMD continued to become more popular, and Intel decided to throw their market share weight while they still could. When there were around 4 Intel customers for every AMD one they started offering a better price for CPU stockists who refused to sell AMD, effectively forcing sellers to choose between selling either only Intel or only AMD, resulting in AMD being extremely difficult to buy even if you wanted to. This cut off AMD's revenue, limiting their R&D ability. It was very illegal, and Intel was found guilty in court, but it was worth it to completely hamstring their competitor.
Intel had several lucky windfalls around this time too. The unplanned development of the Core architecture was a big one, as was the court's decision to give them an incredibly small penalty for getting caught. Another minor one was that AMD's architecture capitalised on low memory latency, so subsequent DDR versions having improved throughput at the expense of worse latency worked slightly in their favour. The main advantage was that AMD no longer had enough money to pay their top talent, so Intel had time to catch up to AMD's tech advantage,
Intel isn't pure evil, of course - there's a lot to like about the company - but it was dirty tricks that allowed them to cement their dominate position in the mid 2000's.
At one point AMD briefly passed 50% of retail desktop sales, thanks to the Athlon 64.
If I remember correctly it was retail CPU sales excluding pre-built systems from OEMs, Intel was still by far the biggest by total volume.
Intel came back strong and almost crushed AMD who screwed up with the A-series and other pre-Ryzen processors.
The actual screw-up was earlier, when AMD stretched waaaaaaaay too far to buy ATI for $5.4 billion where $4.2 billion was cash. That's the war chest AMD should have had to counter Intel Core 2, instead they were stretched super thin. To cut development cost they replaced manually designed circuits with inferior designs created by automation and they couldn't afford to invest as much as they should in process technology so that even then they managed an equivalent design they were behind on cost, performance and power consumption. Meanwhile ATI was under siege by nVidia and couldn't really contribute much and there wasn't really all that much gained by APUs over discrete/integrated graphics because it took special code paths to take advantage and the niche was too small.
Strategically it was also a huge mistake because sure ATI would be fully aligned with AMD (the CPU side). But it meant nVidia had little choice but to deal with Intel on their terms, which Intel used to kick nVidia out of the integrated chipset business and then took all integrated graphics on Intel chips for themselves. AMD opened that door and Intel said "look, we're just doing what the competition is doing". Even if worst case Intel had bought ATI as was rumored they'd have gotten nVidia's full support for free in the fight against Chipzilla instead of paying billions. They should have seen that the battle wouldn't be that easily won instead of thinking CPUs was in the box, on to GPUs...
Live today, because you never know what tomorrow brings
This is the real key.
Intel has managed to stay ahead in the scaling race. The die shrink lets them speed up and reduce the power and stay ahead of their x86 competition and within spitting distance of the low power ARMs.
If they can't stay ahead in that... they've lost their biggest advantage.
Everyone seems to be thinking this is about AMD... it's not just them. AMD is fabless. They don't care who fabs their designs. Intel is being attacked from the bottom too... by ARM and they don't care who fabs their designs either.
And now it's falling behind on its fab business - which used to be outstanding and leading the field.
Wherever you look, Intel is falling behind.
It's not going to fail immediately, but there's a stink of decay about Intel these days.