SemiSerious

From all the rumor and conjecture we hear, AMD’s manufacturing strategy could well be running out of steam. Could this be another case of milking the local government and low-priced labor in a geography and then pulling up stakes once the subsidies run out or local salaries get too high? There are reports of labor strife in Dresden. The days of cheap labor in Eastern Germany are gone and so with them possibly AMD fabs. That would be an unfortunate loss for Europe and AMD.

AMD had success in previous years by creating a superior CPU design to Intel’s. The tables have been turned recently with Intel using their teams in Israel to produce first-class designs. With so much capital and research behind manufacturing at Intel, maybe AMD should re-focus their efforts in design where they have proven that they can outperform their huge rival.

But I think that AMD’s design and manufacturing are both technically sound. The Common Platform Technology consortium with IBM research driving innovation is definitely providing enough horsepower to stay at the leading edge of the technology curve. High volume manufacturing was reliable at Chartered through 90nm and 65nm. Perhaps AMD’s difficulties lie with a marketing or management-level decision to put four processor cores on one die. Intel packages two dual core dies together to create their quad core MPU. Although, there is a slight performance benefit to getting all the cores onto a single piece of silicon, is it really worthwhile in today’s world with very little software written that’s able to take advantage of multi-core processing power? For the kind of performance gains possible, the costs are just too high. Lower yields for a much larger quad core die mean either higher production costs now or waiting to improve yield and pushing out volume production to a later date. Lose money or lose market share, that’s your choice with the bigger chip.

Perhaps AMD has learned some hard lessons regarding procs per die. As Rick Merritt just reported in EETimes, AMD has announced a 12 core server chip that contains two six-pack processor die.

Intel blew it with the Prescott, but grabbed back market share in the server market by adopting AMD’s design strategy. So even when they lost, Intel had enough clout to grab back what it lost while heading back for a ground-up redesign. It’s obviously not fun being in a cage match with Intel every day. AMD deserves respect for staying in there, round after round.

I’m not sure I would go so far as to agree with many of the allegations AMD has made against Intel in the anti-trust suit, but then again, it’s hard to say. Intel is just so big, rich and powerful, there’s a lot they can do. They probably have more PR firms under contract than they can even remember. Even if you argue the allegations of a conspiracy to lock out AMD with the major PC makers, I’m sure you would agree that there has been a lot of bad press circulating about AMD. It never takes much of a spark to create a wildfire of news reports on something like this, but as each flame dies out, it seems that there is a new story popping up somewhere else. Don’t financial analysts have other stocks or markets to consider? Or just maybe there are people working hard to keep up this negative momentum in the press.

Why does it work for Intel - keeping fab operations inside the US? For now, they have that luxury because of overwhelming market share, but I would guess their time will come as well. If AMD can transition successfully to a fab-lite model, perhaps they will grab enough of the microprocessor market to get Intel (or the analysts) talking about fab-lite as well. I hope AMD can increase market share one way or another because competition is a healthy thing - even for Intel.

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