Friday, March 24, 2006

Can the Paranoid Resurge ?

David Whelan at Forbe wrote "Only the Paranoid Resurge", it was masterfully written, I couldn't help laughing at the part about Henri Richard's Ferrari and Sean Maloney's Toyota.

However, the article missed some crucial points:

0) Intel's manufacturing capacity looks impressive, but its efficiency is very much in doubt. Intel has five 300mm FABs and seven 200mm FABs, its theoretical capacity is at least 15 times of AMD's. However, AMD took 21.4% market shares as of 4Q05, Intel can't produce enough chipsets to match its CPUs. In fact, Intel has to outsource work to TSMC and has to build new FABs. My estimate is that Intel's yield is only 1/3 of AMD's yield, assuming Intel's FAB utilization is at the same level as AMD's. As I estimated, with FAB36 ramping up, AMD will take 40% of the market exiting 2006.

1) Intel Israel did not design a new archictecture, it was basically Bob Colwell's Pentium III, an Andy Grove era chip. I can only guess when the Pentium 4 folks took the throne, the Pentium III designer had to exit. When the Israelis brought Pentium III back, the Pentium 4 folks left.

2) The 31 watt Sossaman chip is just Core Duo (Yonah) dressed up as a server chip, it's 32 bit only, HP doesn't want to look at it. Running 4 Sossaman cores with only 4GB memory is a waste of power - computational and electrical.

3) Intel's price cut seems to be localized to the China market. AMD did a 3 months true-Duel Core compaign in China, Intel refused to respond to a duel there, but cut prices whereever AMD roadshow propaganda machine went. AMD prices seem to be on the rise.

4) The article did not mention the AMD anti-trust lawsuit and the almost instantaneous effect on AMD's sales: right after AMD's lawsuit, Opteron sales jumped 89% in one quarter. The lawsuit and worldwide raids on Intel offices partially cleared AMD's road to fair market access.

5) No mentioning of Intel's dramatic change in branding and strategy, even the logo has changed.

Some comments:

Intel is a sad, aging empire in fast decline. An angry Grove protégé of the 386/486 age won't do any miracles. The time of Grove has gone forever. The torch of technological leadership is firmly in AMD's hands, which is five generations ahead. We are talking about a fairly newbie Israeli regiment armed with 1995 weapons against AMD's battle hardened legions, led by grand masters such as the DEC Alpha folks, the IBM Power folks, the SUN UltraSparc folks. It's not an even match at all. There is a massive technology gap and brain power differential over there.

The NGMA will be just another dead end. It's a hack that may bump up Intel's 1P performance to a level closer to AMD, but it will lead Intel further down the wrong direction.

I think the recent news about ccHT based co-processors are of great significance. AMD is setting industry standards again. Intel ruled the PC world with the x86, now AMD64 has become the standard, and AMD fully intends to add more instructions utilizing ccHT. Once a whole new ecosystem and industry food chain is established around those AMD standards, you can imagine what will happen to those being out-innovated.

AMD is like the United States, and Intel is like the British Empire -- this analogy to the American revolution is the best I can find, given AMD's history as a second source x86 vendor. I would equate SUN to the French and Dell to the Hessian mercenaries. The breakfree was last year. The old empire still has large presence in the 3rd world.

It's just the beginning.


Anonymous Anonymous said...

"Intel's ability to throw its weight around won it the high-profile Apple (nasdaq: AAPL - news - people ) account, displacing IBM and Freescale. AMD's Richard had no opportunity to bid, he says, because Intel offered to deploy 600 Indian engineers to help make Apple software run smoothly on the new Intel chips."

That is why Apple made the switch. It would be funny if Apple backstab Intel after Mac can run smoothly on x86.

2:45 PM, March 24, 2006  
Anonymous Anonymous said...

Jobs will look quite foolish when Turion 64 X2 notebooks appear in May.

3:40 PM, March 24, 2006  
Anonymous Anonymous said...

intel fked up at the 32 to 64 bit transition, possibly the worst time to screw up.

any idea why bob colwell left intel?. i couldnt find that anywhere.

4:15 PM, March 24, 2006  
Anonymous Anonymous said...

"There are a few morsels to savour. Colwell – who has since left Intel – is occasionally disdainful of company management who come across as distant and insecure. There is a sense of a bureaucracy bearing down on the engineers, who live at the sharp end of turning ideas into something saleable but get little thanks."

Like former Atari, giving little to no credit to those who are capable.

10:59 PM, March 24, 2006  
Anonymous Anonymous said...

These analysists swallow the "Manufacturing is Destiny - Intel can bury AMD on price and features" line hook line and sinker..
It dosn't matter how much you sell crap for its still crap!!

12:00 AM, March 25, 2006  
Anonymous Anonymous said...

"Manufacturing is Destiny"

The real question is : Does INTEL's give what people want ? The market says NO. Intel's rapid falling revenue does not help, but those newly-invested hype-expensive Fab will consume Intel's resource fast. In dot-com era, it was called the burn rate. My guess people will start talking the Burn rate of Intel in Q206.

Some people says Intel is not a tech company, but a marketing firm. I can believe that now.

6:48 AM, March 25, 2006  
Anonymous Anonymous said...

"Manufacturing is Destiny"

Now, look at GM. Is manufacturing really destiny? I bet not.

Damn it. I thought Forbes is a quality magazine and just subscribed to it for two years last month. Judging from the article, it looks like Forbe's no different from other amateurish business magazines.

4:24 PM, March 25, 2006  
Anonymous Anonymous said...

Is Manufacturing of Forbes is its Destiny ? Guess Forbes can bury Economist on price and features.


3:54 AM, March 26, 2006  

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