Sign in with
Sign up | Sign in
Your question

Set the record straight on Intel

Last response: in CPUs
Share
October 15, 2004 4:28:59 AM

Ok I had to respond to the quote below in brackets. I figured I'd start a new thread as this covers so many area's

((((((Look at the economic facts. These are companies we are talking about, the roaring '90s are over a company has to make a profit to survive. Intels profits have risen 15% last time they announced. AMD missed it's target. It is most likely that both companies will survive. All we as consumers cna hope for is fierce competition on prices. (and don't give me the AMD is cheaper line because that is just not true any more))))))))


Ok Let us look at the economic facts.

Amd came in at 12 cents per share this Q and was expected to come in at 14 cents per share earlier but a couple of week before earnings they warned they would not meet eps do to severe loss in flash. Don't get me wrong amd did make money in flash (15 mill) but no where near as much as in the last few quarters.

So why did amd not make as much money in flash? It's quite simple Intel also makes flash but flash memory only account for 7% of Intel’s sales yet for amd it's around 50% of sales. Intel flooded the market with cheap flash this Q at a huge loss something like at 255 million ((loss)) yet AMD still made 15 million in flash alone despite the falling prices do to Intel taking market share in flash at a big loss. Intel knew they were manufacturing and selling flash at a loss but this makes their only real competitors threat appear to be doing worse then it really is. I am sure Intel dose not like selling flash at a loss of 255 million but it hurt AMD much more thus making amd and Intel appear similar as they usually do in earnings based on amd having 15 - 20% cpu share.

So with AMD loosing most profits in 50% of there revenue flash why did AMD come in at 12 cents per share in stead of 7 or 8 cents per share? I will tell you why AMD took CPU market share and increased ASP's (average selling price) AMD 's cpu sales went up 30% year over year and 23 % sequentially (quarter over quarter) Intel’s only went up 5%.

So how did intel meet their lowered expectation for the 3rd quarter at 30 cents per share or 15% over last year 3Q when AMD is 30% over last year 3Q. Somehow the tax bracket for Intel dropped from 30% to 19% and the fact they bought back 106 million of there own shares (this make the earnings per share dividable among less shares in total) they bought the shares back not with current revenue but with banked cache from the 1990's thus buying shares that should be declining less buyers.. Intel has been doing this all year 250+ shares this year.

AMD is gaining CPU share along with rising asp's (they earned it) so the future looks bright for AMD. Right now AMD can only take a limited amount of cpu share do to manufacturing limitations. However AMD is increasing production by using 90nm,, and fab36 should be producing on 300 mill wafers in mid 05 and in full production by the end of that year. This should triple AMD 's cpu manufacturing capability.

Some people will claim AMD will not produce faster chips because Intel cannot so why bother. These are half truths in the desktop arena AMD only needs the performance crown something editors like Omid of THG still to this day have denied AMD. AMD is limited in production so the goal is to increase yields... Less cache lower clocks and higher yields. More profit that way. Intel throws huge cache at the problem and over produces their many fabs to bin a few high performance cpu's this is why the huge inventory glut at Intel lots of 2.2 giz Prescott’s with 256 kb of usable cache. I don't say huge inventory glut lightly it's very big. Intel is in deep do do because they lost the crown by dropping their design from a 6 cylinder cpu to a 4 cylinder cpu at higher RPM (in order to misleads buyers that think MHz is everything). AMD went screw the six cylinder let go for the 8 cylinder and higher performance at lower RPM.

I believe AMD will put max performance into server chips i.e.: Opteron as that is where less are fooled and more money can be made by having a massive performance advantage. and for 2005 AMD will put enough energy into maintaining a clear advantage over Intel desktops in order to maintain pricing control but not exceeding their manufacturing capacity and keeping costs down and margins high. IE: if you can bin 3.0 Ghz 256 cache and yields are 100% at 54 mm squared and 400 cpu per wafer how does that compare to 3.4 ghz with 2 megs cache at half yields and 140mm squared at 80 cpu's per wafers when they perform the same over all? Remember more cache bigger die less cpu's and more rejects cause of faulty cache. Where Intel does have an advantage is in mobile a out-performing and growing sector. Intel has an edge with Dothan and power saving AMD is not far behind but not up to speed (power wise) however Intel needs to look at Transmeta their shrink from 130nm to 90 nm jumps performance from 1 GHz to 2GHz and that is a threat to Intel in the mobile arena.

What AMD needs is more OEM support but they are fighting a tuff battle. (Intel inside marketing program) I have seen foolish people in the past say Dell won't use AMD because of chip supply or crappy mother boards from via. I argued that was not the real reason in the past and it's clearly not the reason today. It is now clearly apparent even to the most naive that dell refusal to offer AMD computer to a gamer or IT server guy with AMD cpu inside is marketing related. Something forum members here at THG should be happy to explain without letting bias emotions get in the way.

Things don't look good for Intel right now but considering they have 80% x86 market share the consumer will be the winner over all. and that's what count's. Not considering I own shares in AMD based on what I believe is fact so take this with a grain of salt but Ido truly believe everything I just said is true.

Just my 2 cents and I did not post this to pump amd stock. I just want the facts set straight!


If I glanced at a spilt box of tooth picks on the floor, could I tell you how many are in the pile. Not a chance, But then again I don't have to buy my underware at Kmart.
October 15, 2004 4:49:27 AM

That's a little too coherent for this forum. :lol: 

<i>Cigarettes - No cholesterol, high in fiber, low in fat, how could they not be good for you?</i>
October 15, 2004 1:03:46 PM

It's also been said a million times, nice rant non the less.

Xeon

<font color=red>Post created with being a dickhead in mind.</font color=red>
<font color=white>For all emotional and slanderous statements contact THG for all law suits.</font color=white>
Related resources
October 15, 2004 1:36:18 PM

post too long! - Summary anyone?

_______________________
Whos round is it? Down that beer quick, smash my glass down, fall over the table - all rowdy and pissed
October 15, 2004 2:24:10 PM

Thank you for quoting me. :-p

Thsi was about the kind of reaction I was expecting. The fact is that neither company is interresting, the chip industry (at least silicon is ready to mature) and two facts I pointed out where confirmed by you. Consumers will benefit from current conditions IF AMD chooses to abandon its follow the leader role and tries to become market leader. It does come down to corporate strategy, is Intels move really only because they can't pump out a couple of 4ghz cpus or do they have something up their sleeve. In the CPU department Intel has a lot more to offer than AMD with its variation on a single design. Sempron, A64, FX and opteron are all very closely related. Whereas Intel has its Itanium, PIV, Pentium mobile, those things they put in PDA's (and maybe something else) AMD is no longer 'cheap' for instance i want to buy a 3500+ but I find the price a bit high.

So for me it comes down to "I don't care I just want cheap computing power and both companies can deliver the power now I want to see better prices" after all performance this and performance that, benchmark diagrams are ALWAYS cut of to show the difference where in fact the differences aren't even all that big most of the time and definetly not noticable for a human any more...

ASUS P4P800S-X
P IV 2,4 @ nothing caus this board doesn't OC for [-peep-]
2x512MB Corsair pc4000
120 maxtor SATA
Sapphire Radeon 9800pro 128mb
Watercooled
a b à CPUs
October 16, 2004 1:42:32 AM

AMD continuing to gain over Intel for more than a few weeks would put AMD as the market leader in the desktop segment. That's something AMD doesn't want. It means they'd have to increase production to meet demand.

AMD would rather go for the server market so they can increase ASP's even further. They could double their input to the server market by cutting theor output to the consumer market by making a small sacrifice to gain a larger reward (decreasing A64 production to increase Opteron production).

AMD doesn't WANT to reach capacity, I don't know how close to capacity they are, but every time they've exceeded capacity in the past it's bitten them hard with delayed shipments and cancelled orders.

90% of capacity is OK. 99% of capacity is great. 99.9% of capacity might just be ideal, but 100% of capacity doesn't leave them any room to budge.

<font color=blue>Only a place as big as the internet could be home to a hero as big as Crashman!</font color=blue>
<font color=red>Only a place as big as the internet could be home to an ego as large as Crashman's!</font color=red>
October 16, 2004 2:16:19 AM

You have a great point there Crash. Do you think Intel is giving up desktop marketshare (not going to 4 ghz) to push Amd's production, and cut into opteron production?
October 16, 2004 2:22:06 AM

Say what? That really does not make sense to destroy a business model in that fashion. If Intel thought along those lines. It's all over for them.
October 16, 2004 2:29:53 AM

Is it really? Desktop market share has changed before, and Intel got it back. If Amd can garner consumer confidence in the server market, that could be lost forever.
At this point, Amd can only service 30% of the desktop market, or 100% of the server market, and 20% of the desktop market.
a b à CPUs
October 16, 2004 3:25:32 AM

To be quiet frank, I don't know WHAT Intel plans to do, but they obviously have the best in the industry formulating a plan to make this a good move in the long haul. Time to check all their hats for rabbits!

<font color=blue>Only a place as big as the internet could be home to a hero as big as Crashman!</font color=blue>
<font color=red>Only a place as big as the internet could be home to an ego as large as Crashman's!</font color=red>
October 16, 2004 3:39:32 AM

Just bring out dual core Tejas. Nice looking rabbit. :smile:
October 16, 2004 10:01:48 AM

I thought Trix is for Kid and not Intel you silly rabbit. Sorry, could not resist. Only time will tell if Intel will pull a rabbit or a snake that will bite them instead.
October 16, 2004 4:44:54 PM

Maybe I just don't know what I am talking about here, but why doesn't AMD just increase their manufacturing capabilities? I don't understand, if your at 99% capacity most businesses would expand. I hear this argument alot and I don't get it.

My parents own a business and when they get stretched too thin they open another office, why doesn't AMD do this?

AMD 64 3400+
MSI K8N Neo Platinum
1 GB Kingston HyperX PC3200
6800 GT
WD Raptor 74GB
a b à CPUs
October 16, 2004 7:07:03 PM

Expansion cost money in the short term, AMD's stockholders don't like the idea. It means their earnings will be lower in the short term, and these people are near-sighted.

AMD HAS been SUED by investors for expanding production.

I think investors fear when AMD expands production (at their cost), that sustained growth is not garunteed, production MIGHT go back down, and in the long term AMD wasted money on temporary, not sustained, growth.

Remember when major appliance stores Highland and Fretter went out of business because they spent a bunch of money on expansion right before the demand for appliances fell off? They never recovered the money they spent on expansion. AMD obviously feels that's not going to be a problem for THEM, yet previous conflicts with their investors have painted them into a corner.

<font color=blue>Only a place as big as the internet could be home to a hero as big as Crashman!</font color=blue>
<font color=red>Only a place as big as the internet could be home to an ego as large as Crashman's!</font color=red>
October 16, 2004 11:10:42 PM

But getting one more factory wouldn't help? I mean... how many does Intel have? Like 14? If investors see an increase in demand for the processors, and it's sustained, why wouldn't they OK and expansion?

AMD 64 3400+
MSI K8N Neo Platinum
1 GB Kingston HyperX PC3200
6800 GT
WD Raptor 74GB
October 17, 2004 12:46:48 AM

Just remember, with ~43 times the profit of AMD in the last quarter and 15 billion dollars sitting in the bank gaining interest, Intel is in an incredible position to shift gears (which is what they're doing). And although the 130-90nm transition wasn't the greatest thing, one of Intel's factories should be getting close to 65nm very shortly.

It costs 2 billion to create a fab (initially) and Intel has almost 70 straight quarters of profitability. They have the resources, now create the products, guys!

AMD is going for a different business model currently (which is interesting). Intel has a model of ramp up the process technology then transfer it to at least 2 other factories (if not 3). AMD seems to have any particular process technology in merely one fab (including the outsourced fabs). They don't lose time that's required in transferring the technology, but they can't support incredible demand for a particular product. They seem to be building their new factory at the perfect time. Demand seems to be slowing and they're going to bring in another fab. They could not currently support 50% market share, but we may see some transition soon.

I'm just your average habitual smiler =D
October 17, 2004 10:12:47 AM

Amd is currently building a new fab. They are spending a couple of billion on it. That's a big investment, especially since they will see 0 returns for almost 3 years from start date. We aren't exactly talking rent some office space, and hire a few bodies here.
October 18, 2004 4:04:14 AM

Quote:
Thsi was about the kind of reaction I was expecting. The fact is that neither company is interresting, the chip industry (at least silicon is ready to mature) and two facts I pointed out where confirmed by you. Consumers will benefit from current conditions IF AMD chooses to abandon its follow the leader role and tries to become market leader. It does come down to corporate strategy, is Intels move really only because they can't pump out a couple of 4ghz cpus or do they have something up their sleeve. In the CPU department Intel has a lot more to offer than AMD with its variation on a single design. Sempron, A64, FX and opteron are all very closely related. Whereas Intel has its Itanium, PIV, Pentium mobile, those things they put in PDA's (and maybe something else) AMD is no longer 'cheap' for instance i want to buy a 3500+ but I find the price a bit high.

Sorry I could not resist


Quote:
Thsi was about the kind of reaction I was expecting.

This is how I see things you are welcome to disagree but please back it up with facts.


Quote:
The fact is that neither company is interresting.

Ok that is you opinion but I feel I knew what to expect with the Intel brick wall and AMD k8 architecture. Analysts finally are starting to draw the same conclusion. In q4 2004 analysts expect 58% growth for amd and negative 12.5% growth for Intel. Intel has a huge market and controls 80% although it's shrinking do to amd getting more of it. This might not be interesting to you but then again that is only your opinion. I find it interesting although it may never amount to anything.

Quote:
the chip industry (at least silicon is ready to mature) and two facts I pointed out where confirmed by you. Consumers will benefit from current conditions IF AMD chooses to abandon its follow the leader role and tries to become market leader.

I think everyone can agree amd is no longer following intel, AMD seems to have set a few standards lately and intel is doing most of the following, Why cause they have no choice like amd adopting sse 1 2 3 they had to follow cause that is what software writers and benchmark designers will use. Microsoft said amd 64 is good we will use it and we will not make 2 different versions so intel must follow. You are correct the chip industry is mature (at least in Europe and north America) but still growing and upgrades will be required every 4 years or so for a while yet. So considering the huge market intel has now the upgrade potential and emerging markets like china India upside for amd could be very huge indeed.

Quote:
It does come down to corporate strategy, is Intel’s move really only because they can't pump out a couple of 4ghz cpus or do they have something up their sleeve.

Lets just agree none of us have a crystal ball so who really knows. I do know Intel has been throwing out road maps they cannot meet for a while now along with many phantom CPU's. I do know Intel really needs a new core (netburst and Itanium is dead) p3 was sadly ignored in favor of high MHz p4 if intel had kept working on p3 and designing a new 64 bit cpu I believe they would not be in the mess they are today. I'm sure they will get a new great cpu but when is the question. You cannot come up with a new cpu in 6 months it does not work that way. It takes longer and longer, Of course intel will recapture the crown but when and for how long.

Quote:
In the CPU department Intel has a lot more to offer than AMD with its variation on a single design. Sempron, A64, FX and opteron are all very closely related. Whereas Intel has its Itanium, PIV, Pentium mobile, those things they put in PDA's (and maybe something else)

Yes Intel has more variations but I'm not sure where you are going with that statement. For 1 Itainium is all but dead (oh yes it is) sure you can still buy it and it's in intel future road map, but it's purpose was to replace x86 with intel's M$ and itainium 64bit (not x86-64bit) which would be difficult for competitors to copy. Hp who helped design intanium has all but dropped it except for special data crunchers and Microsoft has dropped all support as well. Sure intel could stuff 40 mb cache on it and claim it's superior at crunching numbers but at what cost. x86-64bit is going to be the future for now. As to the p4 p3 that like amdxp verses amd64 not counting the 64 bit capabilities. They are unique cpu's with advantages disadvantages in the x86 world of performance. Did you know the p3 which they put in low power notebooks is Intel’s lone advantage right now small as it is. As to pda's I don't think p3 is the answer I think intel uses the strong-arm cpu which amd answers with the geode cpu. That is really the key matching or beating intel in every area except of course Itainium cause that's proprietary and amd's answer to that was x86-64 and M$ agreed. p4ee compare fx, p4 compare a64, celron compare sepron, xeon compare opteron, strong-arm compare geode. That way amd don’t get squeezed.

Quote:
AMD is no longer 'cheap' for instance i want to buy a 3500+ but I find the price a bit high.

It's not cheap for a reason,, that is it's = or better in most cases so get used to it. Intel is not cheap, Sure you could find 1 or 2 examples where an intel cpu might be a better value but now that is becoming very rare.


If I glanced at a spilt box of tooth picks on the floor, could I tell you how many are in the pile. Not a chance, But then again I don't have to buy my underware at Kmart.
October 18, 2004 5:12:45 AM

I, for one, welcome our new AMD overlords.

Yes, I did just return from reading slashdot...

<i>Nemo me impune lacesset</i>
!