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Content Tagged with semiconductors + amd

Last week, Intel offered up a sneak peak of its Larrabee graphics processor, due out in 2009 or 2010 and guaranteed to raise the competitive pressure on graphics chip makers Nvidia and AMD. Unlike its existing integrated graphics chips, Larrabee will be a standalone processor, but don’t expect that it will be a success.

As computing has required faster chips, Intel and other chip makers have added more cores, a tactic that GPU makers have used for years in order to increase parallel processing. GPUs from Nvidia contain as many as 240 cores while those from AMD, which that company acquired when it purchased ATI Technologies in 2006, have hundreds. So they’re faster.

But they’re also harder to program, something Nvidia is trying to solve with more flexible chips and a new programming tool called CUDA. But most enterprise and consumer software runs on x86 chips and needs adaptations to take advantage of GPUs. Intel’s Larrabee chip has multiple cores, but is not a GPU. Intel claims this offers people the performance gains and ability to render graphics much like a GPU does, but that Larrabee’s x86 architecture allows for easier programming.

It’s nearly impossible to judge a chip until you’ve seen it in action and tracked whether OEMs want to put it in their devices, but my bet is that Intel won’t be able to compromise with a many-cored CPU and believe it will beat a GPU at its own game. Nvidia and AMD are hoping as much, especially Nvidia, which has the dominant GPU market share — right behind Intel’s integrated chips — and wages an almost constant battle again Intel’s PR on this front. As Nvidia’s small but fierce marketing team faces off against Intel’s Goliath, grab some popcorn, because it’ll be a graphics showdown worth watching.

Confession: Back when AMD was pitching its Opteron chipset, I convinced my husband to buy shares in the company on the belief that its plans to build a backwards compatible 64-bit processor was so obviously better than Intel’s efforts with Itanium that the market would eventually see it. The market did, and AMD shares went up a bit, but we soon sold them after my company changed its policy regarding stock ownership.

I say this so you guys know that I once believed in AMD. I live in Austin, where the company at one time employed more workers than in its Sunnyvale headquarters. Where Hector Ruiz, who stepped down today from the president and CEO position, lives. But I look at the sad wreck that was once a scrappy upstart irritating Intel and I don’t know what to say. I can start with the facts.

Ruiz will remain as executive chairman of the company and Dirk Meyer, the former COO and president, will become the CEO and president. Ruiz had already named Meyer as his successor, but Ruiz had also said he would stay through 2008. But AMD had seven quarters of losses and wrote down $878 million last week (for a total loss this quarter of $1.2 billion).

Meanwhile, Meyer will preside over the sale of some of AMD’s consumer assets, as announced in the company’s fourth-quarter conference call on Thursday. These assets should include some of the non-core assets related to mobile and digital television AMD purchased as part of its ATI acquisition in 2006. Those are the facts.

Looking at those facts, and the string of things that have gone wrong, from delays with its Barcelona chip to the loss of its CTO earlier this year, and you have to wonder if Meyer, or anyone inside the company should really be the one to take over. Ruiz and Meyer are both known more for their engineering talents than their business ones, which may be one of the reasons AMD held onto non-core divisions for so long. I suppose I should stop caring. After all, it’s been years since I held stock in AMD, and it gets old rooting for the underdog.

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.

AMD launched its corporate blog today with a decidedly lackluster post about its efforts to get computers to half the world’s population by 2015. It’s a great goal, and also one of the best things to bring up with AMD CEO Hector Ruiz if you want to see him get excited, but in the midst of AMD’s very real troubles, the entry is bland, bland, bland. I don’t expect an Intel smackdown, but hope to see something more substantive about AMD and the chip market next time.

Don’t you just hate it when you spend $1 billion building something, only to find out it’s obsolete within a decade? That’s the fate of semiconductor managers who have old manufacturing facilities filled with old equipment. The question is how to make the best of a very expensive problem.

Surprisingly, if an older fab is retrofitted it generally doesn’t go on to make photovoltaic chips or become a nanomanufacturing center. In many cases, the fabs continue to make chips, but those that require less cutting-edge technology.

Once a company puts $1 billion into building a plant, they’d like it last for years — preferably decades. But in the fast-paced world of semiconductor manufacturing that can take a lot of work. Speaking on Wednesday at a SEMI meeting held in Austin, the managers of three older fabrication plants tried to read the tea leaves on the fate of older chip-making facilities around the country. After hearing them talk I have to tell you, managing an old fab looks to be more competitive than hitting the top of Techmeme.

Surprisingly, most of the older 200mm fabrication plants are still in use and will remain so for a long time. The key is for the people running them to find products that can be made on older technologies while staying cost effective. Freescale Semiconductor started to revamp processes at its 17-year-old Oakhill fab in the third quarter of last year. That effort should end in mid-2009 and result in more than 30 different products lines being manufactured at the fab. Chris Magnella, the facility’s director of operations, says his goal is to remain competitive with the manufacturing costs of more advanced plants in other countries.

To meet that challenge, he’s selected a mix of products that benefit from being made at 200mm wafers, such as MEMs chips, as well as high-voltage power management chips. Additionally, he’s using equipment that’s incredibly old, trying to keep the costs associated with fab operations down. We’ve written about startups trying this same tack. Magnella declines to make big investments in technology at the fab that won’t pay for themselves in a year or less, and he’s embraced a lean manufacturing ethos that pushes the employees to innovate.

Spansion is operating a fab built in 1994. That facility started out making logic chips for AMD that required constant innovation; it switched to making NOR flash memory in 2002 at a cost of $500 million in upgrades. And in 2006 it switched again to build memory on copper rather than aluminum interconnects, again requiring the replacement of lots of equipments and various upgrades.

Why spend so much money and effort to keep a chip plant making chips? Largely because it’s hard to find buyers who can pay as much as these buildings are worth. Building a fabrication plant requires a lot of special features, among them large allocations of freshwater, incredible foundations and clean rooms. Once the basic infrastructure is laid out, multimillion-dollar tools are installed.

An ideal buyer — a PV manufacturer, for example — might be able to use the building infrastructure, and even some of the tools. A few companies trying to make nanomateirals or biomedical devices in tiny packages would likely be able to use fewer tools, but would still appreciate sterile rooms and the extra water connections. And the lowest tier of buyers might be a data center or basic lab facility.

So the next time you start to worry about the value of your house plummeting, just think about how easy you have it compared with the chip makers.

The semiconductor industry is all about scale, with the bigger guys able to keep ahead of the pack. That’s why, a few years ago, it was so notable when Advanced Micro Devices leapfrogged chip-making giant Intel after AMD launched its Opteron chips, which were backwards compatible — able to process both 64-bit and 32-bit information.

But the world has, as they say, moved on, and Intel (INTC) has regained its dominance of the industry, generating $35.4 billion in revenue for 2006, and maintaining a one-year lead time in manufacturing future generations of chips. Its financial muscle gives Intel the strength to face the expensive R&D challenges inherent in the chip industry alone, while its smaller competitors must band together.

Last September, Intel laid out its plans to build chips on the 32-nanometer node, and today at CES the company launched its first-ever laptop containing a chip based on the next-generation 45-nanometer manufacturing process. The different nodes measure the size of the chips, with the 32-nanometer node containing 4 million transistors in a dot the size of a period. The benefits of such shrinkage are faster chips that consume less energy.

But much like shoving too many people into an elevator, cramming that many transistors into a small space leads to problems. From a manufacturing standpoint, it’s difficult. And there is also a problem with power leakage. There are a variety of ways to solve this. Intel is going it alone, but its competitors — including IBM, AMD, Chartered Semiconductor, Freescale Semiconductor, Infineon and Samsung — have taken a different approach: They are working together.

Gary Silcott, a spokesman for AMD, says it doesn’t make sense for each participant in the effort to throw millions — or billions — of dollars at the basic research associated with 32-nanometer manufacturing. That may be true, but it could also lead to problems for the consortium, which in December said it expects to have a solution to some of the problems of working at the 32-nanometer node by the second half of 2009. Silcott says AMD should have chips at that node in products in 2010.

Intel plans to have its 32-nanometer chips in products a year earlier, in 2009. Provided the chips work, that lead time could be enough for Intel to protect its margins on processors that will fund the next generation of Intel’s R&D. Once AMD catches up with its own 32-nanometer chips, Intel can react to the competition with lower pricing, leaving AMD perpetually behind. Other members of the group who don’t compete as directly against Intel should fare better.

Of course Intel’s efforts may hit snags while the collaborative effort powers ahead, but as chips get smaller, size really does matter.