The Business of Technology: AMD Q3 2007by Ryan Smith on November 2, 2007 1:00 PM EST
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In the first part of our Business of Technology double-header, we took at look at Intel, who had a great 3rd quarter, but is navigating concerns of slowing growth. For the second part of our look at the CPU titans, we'll take a look at AMD, a company who isn't sharing in such a rosy financial outlook.
AMD is very much the yang to Intel's yin (or the other way around if you prefer), being the other major producers of x86 processors and the only other producer to actively target the high-end. Furthermore with the acquisition of ATI last year, AMD is now also NVIDIA's counterbalance. This puts AMD in interesting and critical position of keeping both of the big players in check, a difficult task at times.
AMD is in some ways still a company trying to grow in to its place in the market. We have reviewed their products for as long as they have existed, but on the CPU side specifically, for all practical purposes they're not on the same level of an old, established player like Intel is. AMD has produced CPUs for a over 30 years, but the first 19 of those years were as an Intel clone manufacturer. 1996 saw the release of their first in-house design, the K5, unfortunately it and its successor the K6 both underperformed compared to the best Intel chips of the time.
If we want to talk about AMD as a completely competitive force in the x86 market, we're looking at a scant 8 years; it wasn't until the K7 in 1999 that AMD produced a chip that could beat Intel in performance on the desktop. It wasn't until even later, 2003, that AMD finally made a meaningful break in to the server market, finally cementing their place as Intel's peer in the x86 market.
In their limited years as Intel's peer, AMD has done some amazing things, but they have also had to learn how to operate a business like a major player, something that has been difficult for them. Intel has lost money only on a handful of years, a good year for AMD since their emergence as a true x86 competitor has simply been to not lose too much money. AMD is still a raw business, sometimes for the better, other times for the worst. Yet we can't understate just how important they've been for the x86 industry.
Today we'll take a look at the business and technology aspects of AMD for Q3 2007. Q3, like the rest of 2007 has been extremely painful for AMD; we'll dive in to what's going on that has caused so much pain for what may be the most important GPU/CPU manufacturer on the competitive market, and what AMD is doing over the next quarter to reverse their fortune.
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loa - Friday, November 9, 2007 - linkWhat many people today fail to realize is that the single most important factor driving CPU performance increases is the manufacturing process. The manufacturing process is as most people know crucial for the clock-frequency and power consumption. The main function it has is that for every new process generation the transistor budget doubles, which gives opportunity for better performance. What I know AMD has always lagged behind Intel in process technology, typically 6 to 12 months, and thus beeing 6-12 months after in performance.
Of course they can alleviate this if the microarchicture design is superior. Sometimes AMD:s microarchitecture is better, sometime Intels, but in the long run they are probably quite even. What decides who will win is then process technology. If AMD won't be able to out get new process technologies no later than Intel, they will in the long run, on average, also lag behind Intel in terms of performance.
So all this talk about platform and microarchitecture is important, but the real issue is the process technology.
yyrkoon - Saturday, November 3, 2007 - link
Last page, last paragraph. I think the word you're looking for is 'current'.
magreen - Saturday, November 3, 2007 - linkWrong word? LOL. The whole article was so replete with spelling mistakes, grammatical errors and bad writing, I thout I was reading xbitlabs, not AT. Anand, please do something about this! It's the second article in a row!
magreen - Saturday, November 3, 2007 - linkThought... Typing on a blackberry and can't see what I'm typing!
strikeback03 - Tuesday, November 6, 2007 - linklol, so maybe they can make the same excuse.
TA152H - Saturday, November 3, 2007 - linkThe 8086 hasn't even been out for 30 years, how can AMD be building it for over 30 years? They were building it before Intel invented it??? If they can do that, surely they can survive little annoyances like financial losses.
AMD is in a price war they are winning? Are you crazy? They are losing massive amounts of money, while Intel is making enormous profits. Who do you think can sustain the price war, the one losing money on a huge scale, or the one making it? I'll give you a hint, the company losing massive amounts of cash is not the one winning a price war. They are the big losers. Let me guess, Germany and Japan won WW II, right?
AMD has been competitive for a long, long time, not just recently. They did make clones, sort of, and were in fact behind by Intel by a generation most of the time. But fundamentally, the computer business was a lot different 20 years ago. You still have chips like the 8086 being released in new machines, even though it was already nearly 10 years old. That was a processor TWO generations behind the 386 (186 and 286 were designed at the same time, even though the 186 was released a little sooner). More than that, AMD's processors were considerably better than what Intel made, on a generational basis. For example, Intel stopped at 12.5 MHz for the 286, AMD went up to 16 (some say 20, but I have never seen one). The AMD 386 was much better; it ran at 40 MHz (Intel stopped at 33 MHz) and used much power than Intel offerings, and was an extremely successful processor. AMD went up to 133 MHz with the 486, Intel stopped at 100 MHz and didn't even want to sell them too much.
They were not competitive in terms of performance, but they were extremely competitive in overall value (particularly the later 386 versions), and many companies used them.
The K5 was a pure AMD design, but the initial version was something of a disaster for them, since they disappointed Compaq with the performance and time of release. Intel retaliated against Compaq too, so it seriously bruised AMD's reputation. The later K5s were not too bad, except in floating point, but they were usurped by the NexGen designed K6, which had somewhat less IPC but could run at considerably higher clock speeds. It was a competitive processor with the Pentium II and Pentium III, especially the K6-III which ran faster on integer apps clock normalized by a good bit. It was considerably smaller, and used MUCH less power than the Pentium III. So, it was clearly superior in some ways, although suffered from poor floating point, and lower clock speeds compared to the Pentium III. The problem was more the platform than the processor. There was simply no good chipset for the Super 7. The MVP3 sucked, and the Aladdin was miserable too. I still think they should scrap the Barcelona for the mobile, and update the K6 and use it. The K7 was a terribly inefficient chip, and the Barcelona is just two iteratives removed from that. The K6, by comparison, ran circles around the K7 in terms of performance per watt. It would seem a more natural starting spot for a design. But, AMD probably lacks the resources, so they keep putting out rubbish like the Turdion. An updated K6 would be so attractive in the mobile space.
Mana211 - Monday, November 5, 2007 - linkWould it be so hard to fact check before spewing idiocy?
AMD incorporates with $100,000; establishes headquarters in Sunnyvale, California
AMD introduces its first proprietary device: the Am2501 logic counter
AMD goes public
AMD debuts on the New York Stock Exchange
Production begins in new AMD Austin manufacturing facility
At IBM's request, AMD signs an agreement to serve as a second source to Intel for IBM PC microprocessors
AMD is listed in "The 100 Best Companies to Work for in America"
Now if all you want to talk about is x86 then sure that has only been going on for 2007-1982=25 years, but ignoring the 13 years they were in business before x86 became important to them is just sticking your head in the sand.
Calin - Monday, November 5, 2007 - linkThe K6-3 used to run with three levels of cache (two in the processor, just like the Pentium 3, AND one in the mainboard). The cache on mainboard was 512kB or 1MB (I have a Soyo mainboard with 1MB of cache, which would be second level cache with a K6-2 - as it is now - or third level cache on a K6-3).
My mainboard uses some ETEQ chipset - which, strangely enough, is recognized as VIA if you installed the VIA 4-in-1 drivers.
One more thing - the K6-3 might have had better performance per watt, and better IPC than the K7 - but K6-3 (which is the part with lvl1 and lvl2 cache AND is the part to compare K7 against) was available in 400 and 450MHz versions - and not any faster. I have no idea how much could you have overclocked one, but in the end K7 reached more than 800MHz. Hmmm, I wonder if the performance of K7 at 800Mhz would be higher or lower than the performance of K6-3 at 450MHz.
And by the way, if Intel now is making 64-bit processors for laptops, AMD would be forced (feature to feature basis) to do the same, and only K8 was 64-bit.
Spartan Niner - Saturday, November 3, 2007 - link"The rumors of my death have been greatly exaggerated"
Regs - Saturday, November 3, 2007 - linkFinancial accountants, outside agents and firms, sales, marketing, etc...they all had this forecasted before AMD bought ATi years in advance with many of the "what if" variables calculated in every forecast.
I hope everything is going as predicted over there at AMD, and hope they can swim in the squals for just a little longer.