I think Intel's size could really create problems for AMD the second part of this year.
AMD had big design advantages over Intel for quite some time, really since the K7 was introduced. The K7 was in some way inferior to the Pentium III, namely its size and power requirements were disproportionate to it's speed, but it also was faster than the Pentium III in that it could reach higher clock speeds. This was unheard of prior to this, and gave AMD some prestige it never had. Then the P7/Pentium 4 came out and was Intel's successor to their aging P6 architecture. The problem was, the Pentium 4 really, really sucked. So, in terms of performance AMD has pretty much had it there way since the K7, with only minor bumps along the way. In terms of power/size per watt, the Pentium III wiped the floor with the miserable K7, but ever since the Pentium 4 came out the K7/K8 has wiped the floor with the even more revolting Intel processor. Plus, the Pentium 4 was huge, by comparison, even before the Prescott added even more size to this incredibly inefficient processor.
Even the size of Intel could not overcome their incompetence in design, but that is because the Pentium 4 is probably the worst processor ever made, except for maybe two other Intel processors called the i432 (a very early 32-bit processor that truly sucked) and the infamously bad i860 (widely regarded as the worst RISC instruction set ever created). Even the aging P6 held onto market share pretty well, but the Pentium 4 has been an unmitigated disaster that has clearly hurt Intel badly. They've hurt themselves, in some ways irreversibly, because this god awful processor has opened the door for AMD to get into markets they had been shut out of. People simply had no choice, the Pentium III had been discontinued and the Pentium 4 is beyond contemptible for servers, particularly blade servers, so people had to give AMD a chance. When they tried AMD, they quickly realized that they made a superior product and were reliable enough. So, now they have gotten into the door and they can not be easily removed. Before that, no one sane would risk their job on a substandard platform (or so it was perceived) like AMD and had no reason to. With the Pentium 4, you knew you couldn't use this processor and had to try whatever else was out there. Some people stuck with this pig, of course, but it was a bitter pill to swallow and no one liked it.
So, now AMD is in the server market and has attained a name and a good reputation. That's not going to change, and Intel's big advantage in reputation has been greatly diminished. Now that the door is open and people aren't afraid of AMD, only they can screw up and create a reputation for unreliability.
However, once the atrocious Pentium 4 is finally killed, AMD's advantage in design will most assuredly be over. Can they compete with Intel once that happens? I doubt it, unless Intel gets really greedy and overcharges for their processors. Everything Intel does should be cheaper because of their size and economy of scale, whereas AMD has nowhere near the competence Intel does in manufacturing and many other areas, like software, and has to pay companies like IBM to help them along. Of course, IBM doesn't even approach Intel in terms of manufacturing, so it's not like it works that well. Intel also has a big advantage in areas like the aforementioned software, where AMD is not even trying. On top of that, they make motherboards and chipsets, both of which do help sell processors, although Nvidia has lessened the importance of chipsets since theirs tend to be of a good quality.
I think the run-up on AMD shows a extremely ignorant market. They think AMD has finally broken through and will keep going up, without understanding just how bad Intel products are compared to AMD's, particularly in Q4 of last year. They don't recognize that everything will change and for the first time in six years; AMD will not have an advantage in processor design and probably will have an inferior one. If you look at the mobile market, you see Intel enjoying a big advantage despite grossly overpricing their processors. This is because the Turion is inferior to the Pentium M. It's not a big mystery what will happen when the Athlon 64 comes out and finds itself wanting, or at best, equal to the Conroe/Merom. Assuming Intel doesn't price itself high like it does with the Pentium M, it should severely impact AMD and could greatly revise the market shares they both have. It won't happen right away, because they'll have to ramp up the new processors and that doesn't happen immediately, but it does seem like AMD will experience an inexorable decline once it does start shipping.
I still don't know what AMD has in the plans, but it obviously isn't coming out any time soon. Even if it does, their enormous inferiority in manufacturing puts them at a big disadvantage against Intel. They need to close that gap.
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Posted by: TA152H
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Date: 01/25/06 05:18:04 PM]
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