X-bit labs

May 2004 Hardware News Overview (page 2)

Category: Editorial

by Andy Yaschenko

[ 05/11/2004 | 11:21 AM ]

AMD is also building up its production muscles. In the middle of the month they reported about a celebration scheduled for the middle of May: the first phase of building Fab36 is over, its walls are ready. Then they will start installing equipment compliant with the third version of the APM technology pack used by AMD (Automated Precision Manufacturing). By the way, the company has established APM centers at Fab25 and Fab30 to accelerate its development. Also in April, AMD said it had created a new division, an Indian engineering center.

But let’s get back to the fabs. One of them will have started its operation by the end of this year. This is only a fab for packaging and testing chips, though, which AMD is going to build in the Shanghai region, next to Intel’s analogous fab. As you see, everything – even packaging and testing – moves from Philippines and Malaysia to China nowadays.

Fab30 reported a success, too. In April, it started test production of 90nm Opterons! That is, the company is checking out how well the equipment handles production of 90nm processors, rather than produces a few samples. They promise to start shipments of the product in the third quarter, but this seems to be an overoptimistic claim, considering the sad experience of Intel in this area.

Now, let’s throw some bad news into the heap. Intergraph didn’t stop at defeating Intel in court, but tried to nibble at AMD, successfully. The company got $10 million on the spot and will have 2% of AMD’s profits in the next three years, but not more than $5 million annually. Well, AMD will hardly earn so much money, considering that it got only $45 million in the last quarter. This is bad for Intergraph because AMD itself should be happy with this result, especially with the sales amounting to $1.236 billion. The processor maker only enjoyed such sums when the first Athlon was at its evolution peak!

This fact is confirmed by the analysis from Mercury Research for the x86 CPU market: AMD’s share grew from 14.7% to 14.9% in Q1, while Intel’s dropped from 83.7% to 83.6%. This is not a good tendency for Intel, especially as the launch of the Prescott happened back in February. On the other hand, AMD’s main blow occurred in the field of server processors, rather than in the desktop market. In the server sector, the company grew from 3.1% to 4.8% and is going to increase its share further in Q2.

Intel’s performance in the last quarter was not very bright. It was not downright bad, too, – with $8.1 billion sales and $1.7 billion profits – but these numbers are 7% and 20% lower than in the previous quarter, respectively. On the other hand, this looks more like a seasonal slump. The results for the current quarter are expected on the same level – Q2 is traditionally a dead season.

In the meantime, Intel uses the temporary lull for reequipping yet another fab, the Arizona Fab12, for 300mm, aiming at 65nm already. This will cost Intel a couple of billion US dollars – not much for a giant who can earn such money in a quarter.

Time is also passing by in brawls with various controlling organizations. In April, trade commissions of Japan and the European Union, as if in a conspiracy, started investigating Intel’s allegedly non-competitive ways of doing business. Intel is claimed to make the customers buy their processors without an alternative. Two identical accusations in two parts of the globe may be a coincidence, but may reflect the real Intel’s methods?