AMD vows to break Intel's 'monopoly grip'

Advanced Micro Devices Inc. (AMD) is hoping to break Intel Corp.'s 'monopoly grip' on the chip market by offering flexibility to OEMs.

With its acquisition of ATI Technologies, Advanced Micro Devices (AMD) is hoping to break Intel's "monopoly grip" on the chip market by offering more flexibility to PC makers and moving into emerging markets, according to an AMD executive.

By incorporating ATI technology, AMD is looking to offer chip platforms -- including a central processing unit, a graphics chip and chipset -- for use by PC manufacturers, said Thomas M. McCoy, AMD's executive vice president and chief administrative officer.

McCoy detailed AMD's strategy to reporters in London on Tuesday, a day after the acquisition was announced.

The platform approach is also used by its rival Intel, which dominates the chip market.

For example, in the server market, where AMD is strongest, the company had a 22.9 percent market share compared to a 76.8 percent share for Intel at the end of the first quarter this year, according to market researcher IDC.

Intel declined to comment for this story.

New platforms will be used to move AMD into the expending digital device market, where ATI graphics chips have a stronghold.

AMD also will move into emerging markets, such as South America, India, Western China and Africa, where demand will rise for low-cost, integrated processors with graphics capabilities, McCoy said.

"In particular, we need to grow our business on the mobile side," McCoy said, adding ATI is strong in the sector.

AMD's partnership with NVidia, ATI's main competitor in the graphics chip market, will not change, McCoy said. AMD is "highly dependent" on NVidia and will continue to work with the company as long as customer demand remains, he said.

ATI has worked with Intel for decades even though Intel has been developing its own in-house graphics processing capabilities. The purchase by AMD will not shut out Intel, McCoy said.

"It will be Intel's choice if it wants to preclude that [relationship] or not," McCoy said.

McCoy alleged that Intel has hurt PC makers by not giving them enough of a selection of chip platforms, and that this limits innovation by the manufacturers.

He said AMD will let PC manufacturers have a greater say in designing chip platforms.

PC manufacturers would like to see a market where two chip producers hold equal market share, since the manufacturers could then play off the suppliers against each other, according to Brian Gammage, a vice president at Gartner.

However, PC manufacturers may not show much interest in AMD's plan to offer more input in chip design, since uniformity of PC components is key in the PC industry, said Brian Gammage, a vice president at Gartner.

Hardware for the mass market can't be changed dramatically because it has to work with standard software, Gammage said. There is a limit to the amount of differentiation PC makers can offer to the mass market, he said.

And overall, as PC components have become commodities, costs have been cut in the manufacturing supply chain to the point where PC makers compete mainly by cutting retail prices, Gammage said.

Dell, for example, has historically led the PC market in its mastery of logistics and ability to reduce supply-chain costs. One of the major manufacturers using Intel chips and the PC market-share leader, it has been a victim of its own success, Gammage said. Other PC makers have learned from Dell, which is now reduced to single-digit growth, Gammage noted.

It means AMD is charging ahead in an uncertain market.

"There's a very clear gamble going on here," Gammage said. "AMD's looking to buy this acquisition to take a greater share in a market where when volumes go up, prices come down."

Join the PC World newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jeremy Kirk

IDG News Service
Show Comments

Essentials

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?