Thursday, March 30, 2006

AMD poised to exit 2006 with 55% market share (run rate)

Various news indicate that AMD is ramping up FAB36 and Chartered FAB7 as fast as it can, furthermore, 65nm products will be shipping as early as June 2006. Clear indication that AMD is gunning to take over 50% of the x86 market by the end of 2006.

Keep in mind, as of 4Q05, AMD took 21.4% market share with one single 200mm FAB, the FAB30. What it can do with two additional 300mm FABs is staggering. Previously, it was reported that AMD was ramping FAB36 to 13000 wspm. Now, assuming Chartered FAB7 contributes 5000 wspm for AMD64, we reach a 18000 wspm for the 65nm node. The capacity estimate is done again with the Wafer application from Geek.com, which computes the number of dies off a wafer.

For this, let's use the biggest known AMD chip, the Socket 1207 Rev F dual core Opteron as a reference. At 90nm, the dize size for Rev F dual core Opteron is 220mm^2, at 65nm, the die size is thus 110mm^2. Other dual core chips such as Socket AM2 Athlon 64 X2s are 25% smaller, their die sizes are around 85mm^2. To be conservative, let's use a geometry of 10 mm x 9.5mm for the Wafer program. We get 690 dual core dies off each 300mm wafer.

The annual dual core die output at 18,000 wspm is thus: 18000* 12 * 690 = 149 million. With a very conservative yield of 55%, we get 82 million working dual core CPUs.

For FAB30, let's assume AMD sticks to 90nm and continues to produce the same CPUs for the lower end there, FAB30 thus contributes 50 million units. We reach a total AMD dual core CPU output of 82+50= 132 million per year at the end of 2006.

According to IDC, global PC units will increase 10% to about 230 million (with US PC units growing to 69.5 million).

132 / 230 = 57.4%

Intel has about a dozen production FABs, however, most of Intel's FABs are oudated. Only four Intel production FABs are capable of running at 90nm or 65nm*. To be more specific, Intel has only two 65nm production FABs and two 90nm production FABs. In fact, the $10 billion Itaniums are still stuck at 130nm, while the Xscale mobile chips are still at 180nm. For some chips, Intel has to rely on Taiwanese foundry TSMC. Due to Intel's sixth generation architecture(Bob Colwell, 1995), its CPUs needs minimum of 2x2MB of cache to have acceptable performance, the large cache requires large die area. For instance, the 65nm Presler has a 162mm^2 die size, the Conroe's die size is about 155 mm^2. Intel is planning to build additional FABs. However, since Intel has only $10 billion cash but 100K people to feed, its ability to add capacity depends on making profit or selling stocks, both of which are becoming harder and harder, as its products sit in the lower end of the performance spectrum.

AMD will widen its performance lead as we progress in 2006. Dual core Turion 64 X2 will be unleashed soon at 25 watts, then Socket AM2, Socket AM3, Rev F Opteron, Quad-core Opteron and the K8L. The hounds, the K-10 and K-11 are also on schedule. AMD will soon add a new set of extensions to AMD64 to keep the clone makers busy.

* Intel has two 65nm FABs (FAB12, FAB24-2), two 90 nm FABs (FAB24, FAB11x), seven 130nm FABs, and a bunch of 0.18, 0.25,0.35,0.50,0.70,1.0 micron junkies.

*revised to use a lower estimated yield for the 65nm node.

PS: There is a great secret on Intel's capacity, if you can see it, please post your findings in the comments area.
PPS: since the secret is now exposed, I modified the main text to include Intel capacity analysis.

PPPS: In case you didn't notice, Intel did a shelf registration with SEC today, which stated "Under Intel’s second restated certificate of incorporation (the “certificate of incorporation”), Intel is authorized to issue up to 10 billion shares of common stock". Two weeks before earnings, time running out.

20 Comments:

Anonymous pos said...

"and since we know AMD yields is near 100%"

I don't think this will be true for the 65nm chips. If it was true, AMD is not pushing the transistor technology hard enough.

I read that AMD strained silicon has yield problems, but the good dies run 15% faster. With so much spare capacity coming online soon, and should allocate some capacity to the strained silicon wafers. AMD could use these chips for the $1,000 Flagship Athlon-FX chips, and crush Intel in the benchmark tests.

11:13 AM, March 30, 2006  
Blogger Sharikou, Ph. D said...

Since I used the largest AMD chip as the basis for estimation, my number is conservative. The average AMD dual chip die size should be 25% smaller. Assume a reduced die size of 100^mm, we get 657 dies off a wafer. The annual die ouput is thus 18000*12*657 = 141.9 million, now assume a reduced yield of 75%(which is poor), we get 106 million.

11:20 AM, March 30, 2006  
Anonymous Anonymous said...

humm... intel got a boatload of FAB on its hand..
we're talking about at least 10+ fabs "dedicated" to produce processors...
and they are still losing the market to AMD?
humm.. no wonder intel got A LOT (maybe a lot in capital letters are still an understatement XD) of unsold processor stock in the warehouse..
just think about how much they produce w/ that 10 FAB, and how much AMD produces w/ 3 FAB (at the most)... it is really scary XD

11:20 AM, March 30, 2006  
Anonymous Anonymous said...

Slippery Slope says:

Hmmm, only four Intel fabs currently produce 65 nm logic.
Fab 12, Fab 24-2, Fab 18 and Fab 11-X.

So here is evidence that a small number of semiconductor fabrication plants can provide 80% of the worlds x86 CPUs.

11:41 AM, March 30, 2006  
Blogger Sharikou, Ph. D said...

Slippery Slope, you da man!
Off Intel's dozen FABs, only four are at 90nm or 65nm. Keep in mind, even the $10 billion Itanium are still at 130nm, the Xscale stuff is still at 180nm.

11:45 AM, March 30, 2006  
Anonymous Anonymous said...

Hector expects 25 to 30% Market share by 2008 to 2009. Your moron to think it will be 55% by the end of the year... Retard!

http://www.eweek.com/article2/0,1895,1912539,00.asp

2:51 PM, March 30, 2006  
Blogger Sharikou, Ph. D said...

Hector told us 7% revenue increase for 4Q05 at the lower end, he did 45% increase.

My projection for AMD's 1Q06 revenue is $1.7 to $1.9 billion.

2:57 PM, March 30, 2006  
Anonymous Anonymous said...

Why would you project that? AMD at this point still only has FAB 30 online. FAB 36 is only just begining to ship product. AMD's revenue can only increase this quarter mainly by increase in ASP. It will go up but not by that much. My estimate is that AMD will do $0.29 a share just as consensus. They will time the depreciation start on FAB 36 to make that number. Next quarter they will have the capacity but the market will be slow. Third quarter they will have the capacity and the market will be robust. Then they will kick some serious Intel heiny.

Chartered's 300mm FAB will have the capacity for 30.000 frekin wspm. Part of that is used by the XBOX 360 Proc. Basically AMD will have the capacity such that there is nothing that Intel can do to Jerk the OEM's around anymore. Basically if Intel gets mad at a OEM and stops shipping parts to them, they just buy them from AMD. AMD could source more than 75% of the market mid 07 if the need or opportunity arose. There is nothing that Intel can use to leverage control over the OEM's anymore.

9:50 PM, March 30, 2006  
Blogger Sharikou, Ph. D said...

I have explained it elsewhere, to be short, AMD will see substantial ASP increase and unit increase for 1Q06. Seasonality is irrelevant for AMD, with superior products, it has 78% of the rest of the market to take at will. Its capacity is sold out for Q2 already.

I only counted 5000wspm from Chartered FAB7. FAB36 is ramping to 13000wspm as we speak. It's designed to do a lot more.

10:25 PM, March 30, 2006  
Anonymous Anonymous said...

This is very very very very bad for Intel. These days will go down in history as the total collapse of Intel..
Intel investors must be shitting at how much money they are going to flush because of total management failure.
I see the AMD momentum growing everywhere I look, from Blade server, desktops and notebooks, I think your predictions are
conservative.!

11:53 PM, March 30, 2006  
Anonymous Anonymous said...

AMD won't kill INTEL for awhile. First, AMD can not supply 100% of CPU for the PC markets in the next 2 years. Second, even AMD can, it does not want to for avoiding being a monpoly(It is a good idea to keep a smaller competitor).

I guess INTEL will be an underdog in PC, a 64-bit CPU Clone maker.

p.s. INTEL enters the low-end CPU market to compet with AMD.

4:37 AM, March 31, 2006  
Blogger Sharikou, Ph. D said...

It 's reported that Chartered has achieved above 50% yield for AMD64 production. Chartered will contribute 2000wspm by July, which translates into 657 * 3 * 2000 * 50% = 1.97 million dual cores per quarter.

5:42 PM, March 31, 2006  
Anonymous Anonymous said...

And the die from Chartered will be high-end, high-clock Conroe killers? If they really are 65nm than they should be screamers with large cache. The few wafers initially should be sufficient if they are. Is Otellini quaking in his boots? Is there anyone at Intel who realizes what is at stake? The answer is no, if there was they would have done something about it a long time ago.

7:50 PM, April 01, 2006  
Anonymous Anonymous said...

"My projection for AMD's 1Q06 revenue is $1.7 to $1.9 billion." - Sharikou, Ph.D

What is your assumption on how many units that is for 1Q06?

12:08 PM, April 07, 2006  
Blogger Sharikou, Ph. D said...

My 1Q06 AMD revenue estimate was based on approximately 20% increase in units and 15% to 25% increase in ASP.

6:24 PM, April 09, 2006  
Anonymous K8L said...

Nonsense, if they reach should reach 1,5billion thats already an *very* big number.
I love AMD, but you go overline and jumps off the reality.

5:47 AM, April 12, 2006  
Anonymous Anonymous said...

This could be the worst capacity analysis with the worst assumptions I have seen in a very long time.

Why is Intel 1 year ahead for 65nm logic? What was AMD's profit for the last quarter? How are they going to build fabs when you claim that Intel can't?

9:20 AM, April 19, 2006  
Anonymous Anonymous said...

So what we have here is an "analysis" that says
1. AMD will more than double it's market share in less than one year.
2. That Intel can't or won't try to do anything to slow down this process; including such tactics as "dumping" products to slow down loss of market share.
3. That AMD will be able to flawlessly and with high yield make TWO manufacturing transitions; the first from near 100% production in Fab 30 to near 100% production in Fab 36, the second retrofitting Fab 30 to be able to do 65nm or whatever else is needed to address AMD's business needs. Oh, and they have to do this within a year.

I'm a diehard AMD fan, but the OP is beyond optimistic into psychotic (as in living in a hallucinatory reality).

AMD is unlikely to even achieve 1/3 of the x86 compatible market in 2006, and I'm not sure I'd take a bet on 1/4 either.

In addition, the rate of growth in x86 compatible sales is slowing, especially in the desktop space. The fastest growing segment of the market, and the one that sells the most units, is the mobile CPU market; and there Intel is holding off AMD better than in any other market segment.

AMD presently does best against Intel in the highest margin, lowest volume, most stable growth rate area of the market: x86 compatible servers.

IMHO if AMD takes too much of this or any other market, Intel is not going to continue to let AMD erode their market share at the rate it has been happening. Even if they have to dump product to slow down or stop AMD.

5:26 AM, April 24, 2006  
Anonymous Anonymous said...

XScale has been at 90nm for a long time. Why don't you try checking your facts...

Moreover, AMD have always been below Intel's...and I see no reason why the situation would be any different.

9:54 PM, April 26, 2006  
Anonymous Anonymous said...

"Clear indication that AMD is gunning to take over 50% of the x86 market by the end of 2006."

Well, I had been warned that this site was pure bullshit and it took me about 3 minutes to find something that I knew to be pure bullshit. Even Hector Ruiz has not mentioned a 50% of x86 share by 2006. I think in their most optimistic mood, AMD might be happy with a third of the market by 2008. What do you have a PhD in? It seems like you may have a PhD in B.S.

5:59 PM, June 03, 2006  

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