After the first price drop of '07, AMD was instantly competitive with Intel once again - not through architectural updates to the K8 core, but by aggressive pricing its processors. Once that happened, I realized that Barcelona's absolute performance didn't matter, it was what price AMD made it available at that would determine who dominated the desktop market in 2008.
The problem that I highlighted in our Phenom preview today is that it costs more for AMD to make a Phenom than it does to make an Athlon 64 X2. And AMD is already losing a good deal of money each quarter, so the only solution here is to start to move prices upstream. The problem once again becomes one of being competitive at higher price points, and AMD is back in the same situation it was in before these price wars started.
There is one variable here that is difficult to take into account, and it's something that Johan brought up as we were working on Barcelona today. How much revenue does AMD bring in from Opteron vs Athlon/Phenom? AMD is more competitive on the server side and makes more per unit sale over there than in the desktop world, so in theory the server arm of AMD could carry some of the burden of the desktop arm until 45nm rolled around.
Thoughts?
The problem that I highlighted in our Phenom preview today is that it costs more for AMD to make a Phenom than it does to make an Athlon 64 X2. And AMD is already losing a good deal of money each quarter, so the only solution here is to start to move prices upstream. The problem once again becomes one of being competitive at higher price points, and AMD is back in the same situation it was in before these price wars started.
There is one variable here that is difficult to take into account, and it's something that Johan brought up as we were working on Barcelona today. How much revenue does AMD bring in from Opteron vs Athlon/Phenom? AMD is more competitive on the server side and makes more per unit sale over there than in the desktop world, so in theory the server arm of AMD could carry some of the burden of the desktop arm until 45nm rolled around.
Thoughts?
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mikecel79 - Monday, September 10, 2007 - link
I thought you were never going to update this blog again! I thought it was a mistake when it showed up in my RSS feeds in Outlook this morning!PandaBear - Monday, September 10, 2007 - link
Consider that CPU architecture for single core is already maxed out for both AMD and Intel since K7 and P6 architecture, the only cheap way to improve performance dramatically is to either add more cores or integrate more to reduce latency.As we saw in P4's architecture fiasco (higher clock, higher heat, lower performance per clock) and the recent AMD peak. The way forward for both seems to be clock speed and die shrink for the near future. There is no way AMD will be as efficient in manufacturing as Intel.
The only shot AMD has is to keep integrating more performance related logics. Memory controller gave them huge advantages, and soon graphics will do so for the mobile and integration market (if they can work well with ATI in time). 90% of the market is integrated and if they can do well in those, the consumers will forgive them in the high end if the price is right.
There is no way they can compete with Intel in manufacturing.
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