Thursday, February 15, 2007

Will Intel Founder End Up in Jail?

Juicy details for Dell and Intel's secret plot to exclude AMD came out in this lawsuit.

Picture a meeting between Grof and Dell behind doors...

As I analysed before, DELL is in danger of being the next Enron. Dell's book value is about $1, but the stock is selling at $20. In fact, DELL's net worth is substantially lower than AMD's. Dell has net worth of $4.1 billion. AMD has net worth of $5.8 billion.

Hector Ruiz is in an enviable situation right now. He spoke with authority these days, knowing Intel will soon be totally destroyed by K10.

21 Comments:

Blogger lex said...

Hey PhD... any comment about that recent article about AMD at risk for being short of cash and in need of equity bail out.

If anyone is going to land in jail is AMD.. it'll be BK jail there for ya.

10:51 PM, February 15, 2007  
Blogger Roborat, Ph. D. said...

Dell's decision not to buy inferior products from AMD is AMD's own fault. Dell will buy AMD if its better. Now watch Dell dump AMD once again.

Watch AMD struggle to even borrow money just so they can produce more inferior products for a loss.

5:18 AM, February 16, 2007  
Blogger Aguia said...

It’s very hard to believe in this.

1 billion a year since when. How many years?

And that just Dell. Anyone more?

If true the AMD law suite besides bringing the Open Market, also will give them billions in cash?

6:15 AM, February 16, 2007  
Blogger Anonymous Agent #101 said...

Hector Ruiz needs to be replaced by a CEO who focuses on execution -- getting good processors designed and shipped.

Under Hector's watch, AMD has slipped. Processors have not shipped on time, especially ones that are critical to the company's survival such as the K10.

Instead we get garbage like "4x4" and "I am your QuadFather, Luke".

A CEO focused on execution would turn around AMD's sad financials in no time. Instead of a private equity buyout (hello Rothschild family), maybe it is time for a new captain other than Hector "Old Time Politico Windbag" Ruiz.

12:28 PM, February 16, 2007  
Blogger PENIX said...

Considering the demand for AMD in general, and specifically in Dell machines, it became apparent that there was some type of agreement between Dell and Intel. I had always assumed that Intel was essentially giving the processors to Dell at little or no charge. Now we find out that no only has Intel been giving Dell the processors for free, but they have been paying them to take them.

I believe Sharikou's Intel predictions are correct. Intel is in severe financial trouble and has been hiding their losses in a fashion similar to Enron.

12:57 PM, February 16, 2007  
Blogger Jeach! said...

He spoke with authority these days

Any reference to these spoken words?

Hector Ruiz needs to be replaced by a CEO who focuses on execution -- getting good processors designed and shipped.

Been there done that... and he's working on the next generation (K10)

Under Hector's watch, AMD has slipped.

Right, the kind of slippage where you become one of the worlds largest 10 semiconductor. The slippage where you double your revenues. The kind where put a 300 pound gorilla (Intel) on it's knees. The slippage of expanding capacity. The slippage of... need I go on?

Processors have not shipped on time

On time according to whom? As far as I'm concerned AMD should have a competitor to C2D by now... but never has AMD been late based on its own published time lines!

Instead we get garbage like "4x4" and "I am your QuadFather, Luke".

AMD hasn't shown you a 4x4 yet you moron! The 'real' 4x4 is based on the K8L (now K10) 65nm dual core. Show me a 4x4 with THAT specific part... no, I didn't think so!

The part AMD had released is just a demo/test platform of what's to come (consider it an alpha release).

Besides the 4x4's true goal is quad by quad (8 cores). Now beat that Intel!

10:39 PM, February 16, 2007  
Blogger Ho Ho said...

penix
"Intel is in severe financial trouble and has been hiding their losses in a fashion similar to Enron"

Giving CPU's to retailers cheap and paying them lots of money and still earning massive profits is a clear sign of near bancrupy, isn't it?

3:24 AM, February 17, 2007  
Blogger nECrO said...

Hey Anonymous agent #101,
If you take your head out of your @ss long enough to do some reading, you'll find that Ruiz has been a great CEO for AMD. Try reading a little history instead of tech "review" sites like the bought and paid for Anandtech. When Ruiz took over AMD, it was a whisper away from being BK itself. He built AMD to the point that it had the money and credit to but ATI. That would not had been possible under Jerry Sanders.

Intel has a good product in the Core 2. Did anyone really think AMD would stay on top forever? Does anyone think Intel will? This is a game of leap frog. Neither company will dominate forever. The only people who beleive that are the fanboi's like yourself and Roborat.

As for Roborat the fanboi. It took Dell 3 YEARS to adopt the far superior Opteron into it's line-up next to it's hot, overpriced and underpowered Xeon's. all the while losing sales to IBM, SUN and HP for those three years. So think about that the next time you decide to comment on Dell's use of "inferior products.

A fanboy is a fanboy, no matter what side of the fence they sit on.

11:46 AM, February 18, 2007  
Blogger KingRichard said...

Didn't it just come out that Intel has been paying Lenovo?
Hee hee... Intel can't even PAY companies to take their chips...
And if it is proven in court that Intel DID pay Lenovo, DELL and others to take their chips... Boy... that's going to be an interesting lawsuit! I say Intel has to pay over $10 BILLION to government in fines! You know those greedy poli-sickos want their share.... just like the "tobacco-settlement!" ha ha ha

4:10 PM, February 18, 2007  
Blogger Scientia from AMDZone said...

A little reality would be nice. AMD has not been behind in its releases. We had K8 and SOI in 2003, the change to 90nm plus the expansion of FAB 30 in 2004, the release of X2 in 2005, and the release of Revision F (DDR2 + Pacifica) and change to 65nm along with opening FAB 36 in 2006. Then we have K10 in 2007 along with opening the bump and test addition and beginning conversion of FAB 30.

Also, the idea that K10 is going to totally destroy Intel is ludicrous. I expect Intel to continue growing during 2007 although I do expect AMD to hold onto its share and take a little more. Basically, this isn't going to hurt Intel; Intel should make more money in 2007 than it did in 2006.

5:54 AM, February 19, 2007  
Blogger Anonymous Agent #101 said...

The likelihood of Intel becoming the next Enron is very low. Intel is shipping millions of chips and is gaining share now vs. AMD. While funny stuff undoubtedly happened in the past, Intel today makes the world's fastest and most efficient x86 chips.

The best AMD can hope for is a gradual erosion of Intel's server market share in the short term and a more pervasive switch to AMD in the long run.

Whether or not AMD becomes the next Motorola of microprocessors, well, that is a more interesting question. No question that Moto had some great CPU technology, well before its time. But Moto pretty much screwed up every other aspect of getting the technology to market and making it successful. Will AMD follow in Moto's footsteps and fail to execute?

When we look at AMD, everything at AMD hinges on a very successful K10 chip.

With the K10 launch just months away, there is still precious little information available about the chip.

The K10 architecture on paper looks good, especially the floating point. There's also been a lot of work done to make up for the performance problems inherent in DDR2 so that all four cores can be kept fed and kept busy.

However, until real customers can see real K10 processors, all we have is a waiting game.

This blog won't have much to say until K10 ships.

6:01 AM, February 19, 2007  
Blogger Dr. Yield, PhD, MBA said...

Penix hallucinated: Now we find out that no only has Intel been giving Dell the processors for free, but they have been paying them to take them.

Really? Any chance you can add, subtract, and multiply a set of numbers that would allow Intel to show as large a profit as they have (or even a profit at all) when they are losing money on every processor they ship to their #1 volume customer? How about if they shipped them for free?

Penix, your hyperbole adds nothing of value to any rational debate- you just blather your pumper fanboy mantras without a care in the world. Analysis? What's that? I've said numerous times that the industry benefits from two healthy competitors. Acting as an apologist for poor management on one side and randomly bashing the other side with no factual basis does nothing to further discussion. But thanks for wasing the electrons anyway...

7:42 AM, February 19, 2007  
Blogger lex said...

News seem to be short here these days as the pretender comes to grips AMDs days are short and few and they are soon to go BK... Ha Ha Ha.

Oh yes isn't it amazing INTEL can still make a billion a quarter and still help its partners develope platforms and market their computers...

LOL

8:34 PM, February 19, 2007  
Blogger Giant said...


Besides the 4x4's true goal is quad by quad (8 cores). Now beat that Intel!


You can do that now with Intel. You can take a dual CPU workstation motherboard and put two Quad Core CPUs in it. 4x4, in it's current form, is a dog. It uses over double the power of a single QX6700 CPU and is slower.

12:01 AM, February 20, 2007  
Blogger Roborat, Ph. D. said...

KingRichard said...
...And if it is proven in court that Intel DID pay Lenovo, DELL and others to take their chips...

Why do you need a court? Intel already admitted paying loyalty fees, incentives and R&D money to its customers. You may want to wisen up a little and learn about the Sherman/Clayton Act and see what AMD is suing Intel for.

AMD needs to prove ALL of these 3 things:
1) That Intel is a monopoly - 80-75% share proves that it isn't
2) That Intel "forced" OEMs not to use AMD - how the heck do you prove that beyond doubt?
3) That Intel's actions affects the consumers. - OEMs were passing on savings to the consumers and thanks to AMD's lawsuit, now they can't.

Necro said:
This is a game of leap frog..
Yeah, i keep hearing AMD say that after Core2 launch. Why is that?
You may also want to check how large of a leap Core2 did and the aggressive leaping Intel is about to do with 45nm and Nehalem. Sorry, AMD isn't in the game anymore.

1:24 AM, February 20, 2007  
Blogger Scientia from AMDZone said...

Anonymous Agent #101
The likelihood of Intel becoming the next Enron is very low.


Actually, it's impossible. There is no comparison at all between Intel's profitability and Enron's. If tomorrow Paul Otellini embezzled $10 Billion from Intel this still wouldn't be enough to bankrupt Intel.

Intel is shipping millions of chips

Do you even understand the scale of production? AMD alone makes a million chips a week. Intel makes about 3 million a week.

and is gaining share now vs. AMD.

They didn't gain share in Q4.

The best AMD can hope for is a gradual erosion of Intel's server market share

and desktop and mobile share.

No question that Moto had some great CPU technology, well before its time.

The Motorola 68000 was the original workstation chip although it was soon replaced by more powerful RISC chips. Perhaps this is what you were referring to.

But Moto pretty much screwed up every other aspect of getting the technology to market and making it successful.

Do you know anything at all about microprocessor history? Motorola did just fine with the 68xxx series right up to 1994 with the 68060. However, the loss of Commodore and Atari as customers guaranteed that Motoroloa would not have enough sales to continue the series. They briefly held on with PowerPC however again the addition of IBM was not enough for market viability. With the loss of Apple, IBM is likewise faced with inevitable obsolescence of the Power family. Intel's lack of a maintenance level base for Itanium will mean the end of Itanium as well.

Your lack of understanding of the market is clear in that you only mentioned Motorloa. In reality, this situation was also true of Texas Instruments, Commodore, SGI, DEC, Data General, Cray, Fujitsu, Hitachi, and IBM; it really has nothing to do with a lack of execution.

When we look at AMD, everything at AMD hinges on a very successful K10 chip.

Your knowledge of the microprocessor market is obviously lacking. Everything at AMD hinges on K10 plus Turion, integrated mobile and desktop chipsets as well as steady progress on FAB 36 and the FAB 30 conversion as well as the HyperTransport consortium, Torrenza, DC 2.0, and stream processing for HPC.

With the K10 launch just months away, there is still precious little information available about the chip.

There is plenty of information to show that this is a full resurvey of K8 rather than just an upgrade. The only real question is what clocks will be offered however it looks like 2.6Ghz for quad core and 2.9Ghz for dual.

There's also been a lot of work done to make up for the performance problems inherent in DDR2 so that all four cores can be kept fed and kept busy.

What are you talking about? The only problem with DDR2 is increased latency but this problem is improved by additional cache, a better memory scheduler, and splitting the two channels. The additional latency is easily made up by the increased bandwidth. It also appears that AMD will be able to get JEDEC to extend DDR2 to 1066Mhz instead of stopping at 800Mhz and moving to DDR3.

3:31 AM, February 20, 2007  
Blogger KingRichard said...

"Giving CPU's to retailers cheap and paying them lots of money and still earning massive profits is a clear sign of near bancrupy, isn't it?"

Resorting to PAYING companies not to abandon their chips is a sign of desperation.
Telling computer companies to HIDE their Intel-bribes from their Balance Sheets is outright Fraud.
And I believe that is illegal under US Anti-trush laws...
oops...

6:59 AM, February 20, 2007  
Blogger PENIX said...

Dr. Yield, PhD, MBA said...
Really? Any chance you can add, subtract, and multiply a set of numbers that would allow Intel to show as large a profit as they have (or even a profit at all) when they are losing money on every processor they ship to their #1 volume customer? How about if they shipped them for free?


No problem. Get me the numbers and I'll get out the calculator.

Oh wait... you can't get the REAL numbers because Intel will never release those. If they did, they would immediately be charged with accounting fraud with the intent of misleading investors.

11:14 AM, February 20, 2007  
Blogger abinstein said...

roborat: "AMD needs to prove ALL of these 3 things:
1) That Intel is a monopoly - 80-75% share proves that it isn't
"

Intel's market share was >80% before AMD filed the lawsuit. It's probably not monopoly but Intel doesn't need to be a strict monopoly to break the antitrust laws anyway.

"2) That Intel "forced" OEMs not to use AMD - how the heck do you prove that beyond doubt?"

What do you mean by "forced"? Intel does not need to put a gun on a OEM's head to force it. All it needs to do is to give other OEM's rebates.

"3) That Intel's actions affects the consumers. - OEMs were passing on savings to the consumers and thanks to AMD's lawsuit, now they can't."

Intel processors together with PC/notebook prices have been declining faster after AMD filed the lawsuit. In the end, competition benefits cunsumers more than any OEM discounts.

3:36 PM, February 20, 2007  
Blogger KingRichard said...

Borat said:
"AMD needs to prove ALL of these 3 things:
1) That Intel is a monopoly - 80-75% share proves that it isn't"


If Intel's bribes FORCE an OEM vendor or store to ONLY use INTEL chips, then that is a 100% Monopoly! Genious! Dell was a 100% Intel Monopoly until they couldn't lose more marketshare!

"2) That Intel "forced" OEMs not to use AMD - how the heck do you prove that beyond doubt?"

Ehh.. I think this is what the court case is partially about, no? Didn't the German Tech-Store giant admit to receiving "Intel only" bribes? ehh.. I mean, "Marketing" money... Right.. that's it!

"3) That Intel's actions affects the consumers. - OEMs were passing on savings to the consumers and thanks to AMD's lawsuit, now they can't."

Hmm... Let me see.. if there was a LEVEL playing field at DELL, for example, 3 years ago, with AMD chips in desktops and notebooks, the faster and better AMD versions would have cost LESS than the lousier-Intel counterpart. That means that due to Intel's bribery, ehh.. "marketing money", competition at DELL didn't flourish, and AMD wasn't able to sell an additional 10+ Million chips per year, which would have spurred further R&D and cost savings at AMD, trickling down to DELL, and eventually to ME, the consumer...
So, yes... Intel caused prices to remain artifically HIGH.
DELL did NOT use the $1 BILLION to lower the average price of an Intel chip to the consumer... it pocketed that change...

Intel?? See ya in court!

2:15 PM, February 21, 2007  
Blogger KingRichard said...

Here ya go Borat:
"2) That Intel "forced" OEMs not to use AMD - how the heck do you prove that beyond doubt?"

July 11, 2006 - The cartel office, or competition authority, received a complaint late last Thursday about Intel business practices that could run against Germany's competition laws, said Irene Sewczyk, a spokeswoman for the authority. She would not provide further details or identify the company that filed the complaint, saying only that it is an Intel competitor.

The complaint was filed shortly after a report appeared July 3 in the German edition of the Financial Times, concerning a letter from Media Saturn Holding GmbH, the company behind the Media Markt chain of retail electronics stores. The letter cites an agreement in which Media Markt agreed to sell only Intel-based products in return for payment by Intel, according to the paper.

InfoWorld: Complaint filed about Intel in Germany

Rival Advanced Micro Devices Inc. (AMD) has already filed complaints against Intel in the U.S., Europe and Asia over alleged unfair sales practices. AMD accused Intel of using its dominance in the PC processor market to coerce computer makers, distributors and other partners into selling exclusively Intel-based products.

----------------------
Yepp... If that letter from Germany's Electronics retail chain "Media Markt" is in fact authentic, it would prove that Intel Coerced the chain to sell only Intel computers.

2:23 PM, February 21, 2007  

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