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All Your Eggs in One Basket


In the past few months we’ve seen massive upheavals in the desktop processor market. Intel has given AMD a bloody nose with its superb Core 2 Duo CPUs and in the process it seems to have stopped AMD in its tracks.

By any measure AMD achieved a stunning success when it launched Opteron in April 2003 and followed this up with Athlon 64 in September 2003. At that time, Intel’s Northwood Pentium 4 was running at 3GHz with strong chipset support, an enormous marketing budget, total domination in the server market and an exclusive partnership with Dell.

By contrast AMD had a very clever processor, its own 8000 series chipset, a tiny bank balance and hardly a hope in hell of persuading the world that it knew better than Intel. Soon after that Intel went into self destruct mode by pursuing ever-higher higher clock speeds. The consequence was the awful Prescott processor that launched in February 2004 with a ridiculously long pipeline and huge power consumption.

Intel’s response was to push the BTX form factor to assist cooling by reorganising the layout of the motherboard, case and cooling system without paying any attention to the fundamental problems of power and heat. All the while that Intel was charging down this particular blind alley it continued to bang the drum about Itanium as its preferred server processor, when it was stark staring obvious to the world that AMD had the right idea with its Opteron architecture.

Intel’s problems gave AMD the chance to develop ever-closer ties with nVidia, who had demonstrated the ability to make some very useful chipsets. AMD wasn’t particularly fussed who made chipsets for its processors and motherboards were available with chipsets from ALi, ATI, SiS and VIA. However, you needed an nVidia chipset if you wanted to run dual nVidia graphics cards in SLI. In addition, the chipsets from ATI suffered from a handful of flaws, including questionable USB support. As a result, nVidia was the chipset manufacturer of choice if you fancied an AMD processor and it reinforced that position when it bought ULi, as Ali had become known.

The only company who didn’t seem interested in making chipsets for AMD – apart from Intel, naturally – was AMD, which had no interest in the market and preferred to involve partners.

In 2005 we saw some evidence that nVidia was flattered by AMD’s integrated memory controller as it made the job of chipset design relatively easy. When nVidia adapted the nForce4 design to add SLI to Pentium 4, the heat from the Northbridge had to be experienced to be believed. Bolting on a memory controller to an existing chipset design is, it seems, a serious undertaking. None the less, nVidia knocked out some decent chipsets with nForce3 (Athlon 64 and AGP graphics) followed by nForce4 with PCI Express.

Intel’s troubles gave AMD plenty of time to make progress as it won the confidence of the business world and made significant inroads into the server market and it was able to control the rate at which it released speed bumps in its product ranges, just to show us that it still cared.

Never mind that Microsoft waited until April 2005 to release Windows XP x64 Edition and never mind that none of us had any need for 64-bit software, Intel had caved in and accepted that AMD’s 64-bit extensions were the right way to go and Itanium was effectively toast.

Intel scored a moral victory of sorts by launching its dual-core Smithfield processor a few days before the Athlon 64 X2 but apart from that one brief hurrah we entered 2006 with AMD seemingly in the ascendant.

Or at least that’s how things seemed to those of us who pay attention to high-end gaming PCs and ignore the mainstream shrapnel that you find in PC World. And of course there’s the mobile market, which is utterly dominated by Intel.

In the last financial quarter AMD had revenue of US$1.3 billion with net income of US$134 million compared to Intel with US$8.7 billion and US$1.3 billion. That’s seven times the turnover and ten times the profit or, if you prefer, Intel’s profit equalled AMD’s revenue.

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