AMD: We Are at Inflection Point

Think Beyond "AMD Vs. Intel" Mindset, Says AMD

by Anton Shilov
12/01/2011 | 04:10 PM

Advanced Micro Devices claims that the traditional view on the market of microprocessors as onto competition between Intel Corp. and AMD is now outdated. There are strategic inflection points both for the market in general and AMD in particular. But while addressing new challenges is important, there are traditional things that need to be done right.


"We are at an inflection point. We will all need to let go of the old 'AMD versus Intel' mind-set, because it won't be about that anymore," said Michael Silverman, a corporate spokesperson for AMD in an interview with San Jose Mercury News.

New Technologies Change Competitive Landscape

It is not a secret that there are several global revolutions happening in the computer world nowadays. For the microprocessor industry the most important industrial phenomenon today are GPGPU (general purpose computing on graphics processing units) technologies as well as ARM-architecture microprocessors that power ultra-portable devices which deliver great user experience at low power consumption. GPGPU allow to accelerate certain consumer programs or even power high-performance computing (HPC) applications thus reducing demand towards traditional x86 processing power. ARM chips power the most popular and the most personal devices nowadays - smartphones, tablets, etc. But ARM or its partners do not place stickers with their names, number of cores and clock-speeds onto those products. Few people know what is inside their personal devices; therefore, the importance of microprocessor brand or horsepower is going down for the end user.

"The competitive landscape has changed over the past few years. [...] There are more players in the microprocessor market than there were, say, five years ago," said Mr. Silverman in an interview with X-bit labs.

Five years ago only two companies - AMD and Intel - offered competitive x86 chips that could deliver enough horsepower for demanding consumer programs or HPC applications. Nowadays the situation is different: many apps take advantage of GPUs by default and many consumers know that they need proper contemporary AMD Radeon or Nvidia GeForce GPUs to have blazing speeds. Today, supercomputer owners are not afraid of GPU-based accelerators and significant amount of top-performing systems in the world use GPUs. As a result, today there are three companies fighting for the HPC market and for end users' dollars: AMD, Intel and Nvidia.

Nowadays, media tablets powered by ARM system-on-chips from different companies are stealing sales from PCs and therefore from AMD and Intel. With the arrival of Windows 8 next year, ARM partners will be able to compete directly against AMD and Intel on the notebook and slate-type PC markets. Therefore, the competition will expand again, there will be AMD, Intel, Nvidia, Samsung, Qualcomm, Texas Instruments and many others. But since customers do not care what is exactly inside tablets, the value of Intel and AMD brands will get much lower and horsepower of their chips will no longer be the most important factor.

New All-Out War on Chip Market Incoming

Does this mean that AMD and Intel are no longer direct rivals? No. It means that there are more rivals for Intel and AMD on the market and the two companies will pin less attention on each other in a bid to stay competitive globally. The competition between AMD and Intel was all about performance and volumes. While the importance of performance benchmarks for end-users may get lower, PC makers will continue to thoroughly evaluate chips in order to enable the best possible user experience on their devices. As a result, there will still be fight for the highest speed amid lowest power consumption between AMD, Intel and tens of other players.

"Any time a company is more focused on its competitor than what the market wants and needs it is probably not in a good place for long-term growth. Our CEO Rory Read is driving a shift internally to think beyond the typical and outdated AMD/Intel mindset. At the end of the day, we aren't focused on keeping pace with Intel, we are focused on keeping pace with consumers and the market. That is how we are going to win," said Mr. Silverman.

The new era of always-connected Internet devices has quietly brought a number of strategic inflection points for various industries. For computer chip designers it means a new all-out war where only the strongest will survive.