sorted by: recent | see : popular

Content Tagged with intc + amd

It’s been a long time coming, but AMD said this morning that it has entered into a transaction with the Advanced Technology Investment Company of Abu Dhabi to create an independent semiconductor manufacturing foundry called The Foundry Company. As part of the spin-out of AMD’s fabrication plants into this separate entity, AMD raised $1 billion in capital and got rid of about $1.2 billion in debt.

The move has been anticipated for over a year, as AMD has struggled to stay afloat amid production delays and brutal pricing from rival Intel. Last quarter, it reported a $1.2 billion loss. AMD finally had to admit it couldn’t keep up with the costs of building a $3 billion-$4 billion fab each time it wanted to shrink its chips and gain some economies of scale in manufacturing. That’s a business model that has moved on. Now most companies have created manufacturing partnerships, or are fabless, meaning they outsource the building of their chips to a third party.

The Foundry Company will join the ranks of those firms, and will be 44.5 percent owned by AMD and 55.5 percent owned by ATIC, an independent fund capitalized by the government of Abu Dhabi. ATIC will make a $5.7 billion investment into the business to build out a planned fab in upstate New York and finish out a fab in Dresden. This is the first major investment for ATIC. It will also invest $700 million in AMD.

The ATIC has also brought in the Mubadala Development Co. to help operate the fabs for the next 12 months. Mubadala made a $622 million investment in AMD last year, becoming an 8.1 percent shareholder. Today it said it would invest $314 million to eventually own 19.3 percent of AMD.

Doug Grose, the former senior V-P of technology development, supply chain and manufacturing for AMD, will lead the new company. Hector Ruiz, former CEO of AMD and its current chairman, will become chairman of the new company, leaving his position as chair of AMD. A new AMD chairman has not yet been selected.

Some problems I see with the deal:

• New York State has promised $1.2 billion in assistance to AMD if it builds its fab in New York. The state does not have an agreement with The Foundry Co. Given the economic uncertainty and the foreign ownership of the new business, that assistance may change (although it wouldn’t likely disappear altogether.)
• Because AMD has a 44.5 percent ownership stake in the fab it has some disincentives to negotiate hard for better wafer pricing. That could hurt AMD’s bottom line.
• AMD has a licensing agreement with Intel that allows it to manufacture x86 chips. AMD says this deal fits within the confines of the Intel licensing agreement, but further details about that agreement would help investors understand exactly how it may limit The Foundry Co.’s ability to cut costs and expand.
• AMD uses other foundries to make some of its chips. As a majority owner of a competitor, how will other foundries treat AMD’s wafers?

image of Dresden fab courtesy of AMD

Despite reporting a second-quarter loss last night, due in part to costs associated with the faulty packaging on some of its chips placed in thousands of laptops, Nvidia still has a plan for semiconductor domination through the GPU. But if it wants to execute, it needs to accept the realities that come with stepping into a competitive market. The earnings call shows Nvidia still has a lot to learn.

In yesterday evening’s call, CEO Jen-Hsun Huang admitted to a $196 million charge because of problems with its GPUs in some laptops. He also talked about some pricing mishaps that occurred as AMD pushed out a highly competitive product with a lower price. Nvidia is learning, but there are two bright spots in the call, related to its Tegra chipset for mobile Internet devices and smartphones and bringing high-level parallel processing to the consumer.

Huang said Tegra wouldn’t be shipping in products until next year (something he told us earlier this year in an interview), but growth from CUDA on laptops and desktops should have an impact over the second half of this year (which will be the second half of fiscal 2009 for the firm). CUDA is a programming tool that allows software coded in C languages to run on the multiple cores in a GPU. It helped the company make inroads in the scientific computing community, and thanks to software from startups such as Elemental Technologies, the goal is to bring that level of parallel processing to consumers.

“We can’t just keep selling chips that make graphics run faster and cheaper. I mean, that’s all very nice and it’s all good but we need to advance the visual computing field in some remarkable and important way, and parallel computing is one of the most important investments that we are making,” Huang said on the call.

Such a shift, if well executed, will bring a level of power to computers that has been reserved for research institutions and mainframes. The next laptop you purchase could very well be able to analyze real-time trading data and spit out investment decisions. The key will be building software that’s designed to take advantage of it.

image courtesy of Nvidia

AMD isn’t going after the mobile Internet device market that Intel and other chip vendors are eying. AMD’s senior VP and chief marketing officer, Nigel Dessau, told eWeek, “What we are saying is that we are a smaller company and we have to focus on what we do well at this point. We are watching that segment rather than playing in it, but as it matures we’ll see where it goes.” Sounds like a good plan for AMD, which already has chips that might work for Netbooks and needs to focus on righting itself.

OK, so AMD refuses to comment on rumors that it plans to introduce a low-power chip aimed at the mobile Internet device market, where it would compete with Intel’s Atom chipset and offerings from several other rivals. And it refuses to claim a block diagram floated by eeepcnews.de as its plans for such a chip.

I was kind of hoping AMD might stay out of this MID market opportunity and focus on its core CPU business and getting its promising graphics processor and CPU platform off the ground instead of chasing Intel, Nvidia, Via, Qualcomm and Texas Instruments and their hopes for a pocket PC market. Plus, AMD’s been here and done that — back in 2002, when it purchased Alchemy Semiconductor and its line of MIPS-based, low-power personal device chips. That deal was a response to Intel’s Xscale assault, and AMD turned around and sold the Alchemy line in 2005.

AMD did, however, keep the low-power x86 chips for the embedded and personal device market that it purchased from National Semiconductor in 2003. The x86 architecture was more familiar to AMD’s existing chips, and the Geode line is still used in low-power devices, but isn’t very fast and wouldn’t be competitive for the MID opportunity.

It’s surprising that AMD doesn’t have anything better on offer already. Especially given AMD CEO Hector Ruiz’s 50×15 project, which aims to get computers and broadband to half of the population by 2015. An AMD-designed, low-power, high-performance chip would have been perfect for the project and then later for the MID market. However, the One Laptop Per Child laptops AMD is using for the project use a Geode processor. If this diagram represents AMD’s answer to Intel and the gang, why the heck has it waited so long? They had a perfect market for an MID chip and they let it pass them by. If anything, AMD could have sacrificed short-term profits for large volumes if it had to. Its main rival isn’t shy about doing that.

The Federal Trade Commission, after two years of looking into allegations that Intel has behaved anticompetitively in the microprocessor market, has decided to act, announcing a formal probe. At issue is whether Intel offered PC makers rebates to use its chips instead of AMD’s. Intel issued a statement in response.

The company believes its business practices are well within U.S. law. The evidence that this industry is fiercely competitive and working is compelling. For example, prices for microprocessors declined by 42.4 percent from 2000 to end of 2007. When competitors perform and execute the market rewards them. When they falter and under-perform the market responds accordingly.

In Austin, the Intel fund at Dell was an open secret, although Dell eventually opened the door to AMD. While AMD may be tempted to applaud this and the $25.4 million fine imposed on Intel by South Korea, the FTC probe won’t lead to action anytime soon. The government moves slowly and the coming change in administration won’t help speed it up.

Intel’s Mash Maker application, which launches today, isn’t exactly a new idea; Yahoo Pipes and Microsoft’s Popfly are similar. But Mash Maker marks the first time Intel has launched a software effort with no hardware attached. Presumably you can run Mash Maker on a computer with an AMD inside without melting your motherboard.

I was super skeptical at first and frankly, still am. According to Robert Ennals, senior researcher at Intel Research Berkeley and the architect for Mash Maker, the goal of Intel Research is to make the computing experience better. He said Intel Research and Intel Capital are the only divisions at Intel who have the freedom to think outside the PC box, as it were. Fine, Intel launched Mash Maker to make the Internet a better place. Does it?

Jeff Klaus, marketing director for Intel Mash Maker, said it is more useful than Pipes or Popfly because it not only allows users to make mashups, but also allows those who have downloaded the Mash Maker client to see which previous Mash Maker mashups might improve their web surfing experience. This way users of Mash Maker can benefit even if they don’t know how to create mashups. As one of the biggest complaints I have about Pipes is the difficulty I have using it (yes, it’s a me-centric complaint), I have to think there are others who could benefit from this.

In the meantime, I’ll watch with interest as Intel moves outside of its chip-centric world. A few years ago it made the decision with its Intel Capital venture investing arm to look not just for companies that could eventually sell more Intel chips, but also those that might make for a good return. In 2007 it started investing in seed deals, especially consumer-facing startups, as part of that expanding mission.

As for selling more chips, programs such as Mash Maker may not directly influence buying decisions, but by making the computer easier to use, Intel makes them more important and thus, more necessary. And by associating its brand with a fun application, Intel is achieving brand recognition in a much more sophisticated way than its dancing bunny-suited guys back in the 90s.

Store this one away in your “Grass is always greener” file: The two companies that make the brains found in today’s computers, Intel and AMD, are both pushing hard to get into graphics, just as the top graphics chip maker, Nvidia, is aiming squarely at the CPU space. It’s not an identity crisis so much as a testament to how important graphics have become in the consumer computing experience — and how much money can be made crunching numbers on the corporate side.

It’s also a sign of the end of the graphics processor, found on a separate card plugged into high-end machines. In order to survive, Nvidia needs to find an end market that values graphics processors for something beyond graphics. Or push graphics processors into compute-intensive applications in hopes of relegating x86 chips to running the OS and nothing else.

The battle between Intel and AMD has raged for years. When AMD purchased ATI Technologies back in 2006, the plan was to amp up AMD’s processors with an integrated graphics processor and CPU on a single chip. Project Fusion, as it’s known, was scheduled to start turning out its first chips by late 2009, but since AMD’s CTO just walked, who knows if Fusion will become as snakebit a project as Barcelona. In the meantime, AMD is settling for integrating a graphics processor on the motherboard with a CPU.

Meanwhile, Intel is scratching the graphics itch with Larrabee, a multicore chipset designed to compete with Nvidia as a graphics processor. The Larrabee chips are due out in late 2008 or early 2009.

Nvidia’s hop over the fence is a little more novel, and certainly worth noting. It’s no secret that graphics chips can perform a helluva lot of computations to deliver the ultimate in 3D gaming, but that same power can be harnessed for crunching numbers or running simulations. To that end, Nvidia last year launched technology called CUDA, which allows developers to build programs that run on graphics processors using the familiar C programming language instead of the more esoteric graphics programming languages.

With that move, Nvidia put Intel and AMD on notice. Today Nvidia’s CEO fired the first shot by introducing what it calls “The World’s Most Affordable Vista Premium PC,” a low-cost platform containing a Nvidia graphics processor and a lower-end CPU from Via Technologies. Nvidia isn’t only snubbing Intel, it’s trying to prove that PC buyers are better off with functional CPUs, and that high-performance tasks can be trusted to a graphics processor.

It’s a bold move, but if it works, Nvidia will have upended several decades of chip design. And it will likely take its success all the way to the bank.

Photo from Nvidia

Today AMD said it has 45 nanometer chips for desktops and servers running in development systems. That’s fantastic, but the chips won’t be in actual devices until the second half of the year, putting AMD’s most advanced chips at least six months behind Intels’s 45 nanometer chips.

Also, one of the touted benefits of 45nm is increased power efficiency, which makes them a good fit for mobile computing. Intel launched its 45nm chips first in a new laptop, but AMD won’t have 45 nm chips in laptops until 2009. By then Intel will be working on 32 nanometer chips, which leads me to wonder how long AMD can play this game.

They are fast becoming the Grumpy Old Men of Silicon Valley: Santa Clara, Calif.-based Intel Corp. (INTC) and Advanced Micro Devices (AMD), long-time rivals who bicker in public and spar over everything from clock speeds to BUS technologies, are at it again — this time over quad core processors.

Essentially, quad core processors put four x86 cores into a single die - though for now AMD and Intel are using different technologies.

(Most of us common people are only getting our heads around dual-core chips, or two x86 cores). Both companies are targeting the server market with these chips, as evidenced by AMD’s newest addition, code-named Barcelona, unveiled today.

With it, the Santa ClaraSunnyvale, Calif.-based Company is clearly hoping that the lightning is going to strike twice. Strategic miscues, delays and other problems have put AMD on a slippery slope recently – not unlike the situation it found itself at the turn of the century, a situation that was rectified only when the high-end Opteron chip, which was also aimed at the server boxes, rode to its rescue. Now all chips (no pun intended) are on Barcelona (which is going to be renamed Quad Core Opteron.)

The problem is that its new offering is slower than expected (2 GHz). What’s worse is that Intel has already announced its own quad core offering, Caneland (aka Intel 7300). While Barcelona has four cores inside a single die, Intel is hawking a solution that packages two dual core processors together.

EETimes says that the difference between the two might be not that much, especially with Intel promising newer chips built using a 45 nanometer manufacturing process next year. Customers such as Sun Microsystems (JAVA) are happy to try out both solutions.

Having lost its edge in the dual-core business, AMD is also looking to use aggressive pricing to regain some of its momentum. Even though the server market is small compared with that of desktop and laptop computers, the price for processors used in the servers is pretty high. The new Barcelona chip is going to cost over $1,000. With 30 million or so new servers sold every year, decent market share can add up to billions in revenues.

Now all AMD has to do is figure out a way to sell the new quad cores. And get back to playing the part of Walter Matthau.

Coming tomorrow: Do MultiCore Processors Matter?