Don't stick a fork in AMD

Intel's price/volume strategy leaks like a baby

With all the vigour and exactness of stock market analysts explaining a one-point shift in the Dow Jones Industrial Average, pundits are penning obits for AMD in the aftermath of Sun Microsystems' recent decision to buy chips from Intel. Poor AMD: first Core microarchitecture, the looming doom of quad-core Core, and now the defection of its sole first-tier monogamous mate. Talk about your slings and arrows of outrageous fortune.

I invite my colleagues in the media to run their AMD cover stories with Titanic metaphors now and get it out of their systems. As they say in my business, this whole Intel-eating-AMD's lunch angle doesn't have legs.

The Sun flap doesn't call for much commentary; I don't recall seeing headlines of gloom for Matsushita when some OEM started integrating Philips DVD burners in some of its models. If you're willing, deliver these words, very slowly and with sharp enunciation, to the person nearest you who is sticking a fork in AMD: Sun is an AMD customer. Have them say it three times, slowly.

Sun did not dump AMD; AMD will continue to supply Sun Microsystems with enterprise-grade x86 server CPUs. Sun found in Intel a cheap second source of supply for x86 microprocessors. There is a place in the market for a chipmaker that can jump the buzzword bar without actually meeting the requirements of the technology that the buzzword was meant to describe. For example, to Intel, multicore means pasting multiple discrete CPUs onto a chip-shaped carrier, and a server CPU is a desktop CPU with bigger cache. There is a place in the market for a cut-rate player, and it's not like Intel's CPUs are junk. As I've said, Core is Intel's best work to date. But Intel has to keep current x86 owners coming back for Core 2.01 and Core 2.1.

So Intel has decided to change the rules of the x86 game. Innovation be damned, it's stamp 'em and ship 'em as fast as you can. In a price/volume war, the company that makes the greatest number of widgets with the lowest manufacturing costs wins, yes?

That's Intel's logic, and it leaks like a baby. It relies on the assumption that the market will absorb every part that it pushes out the door. As Intel shifts manufacturing gears to put out models with higher clocks and bigger caches, it assumes that the market will come along. The trouble with this strategy is that the introduction of new CPUs no longer spurs a fresh cycle of buying. The market isn't in saturation, but it is in the very state that Intel hopes to exploit with technology that's in technological second-place to AMD: I believe that many x86 buyers are willing to settle for good enough computers. But that includes the ones that buyers already own. They're saving their pennies and investing instead in consolidation, services and strategic objectives. In other words, I see Intel sitting on a lot of inventory as a choosy market isn't brought back to "click to buy" by a 200 MHz kick in clock speed.

Without the inventory problem, AMD has more relevant new technology to bring to the table than Intel's road map portends. And where speed bumps are concerned, I'll tell you a secret: AMD isn't worried about speed. It'll have no trouble keeping pace with Intel's road map, and doing it without burdening distributors and OEMs with inventories of the prior generation of CPUs.

Enough about economics. Let's talk quad core next week.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Tom Yager

Show Comments

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?