AMD on the Rise, but is the Company Poised to Fall?


Out of 25 chip suppliers, AMD now ranks 8th according to market research firm iSuppli, a significant leap from 15th just two years ago. And thanks in part to the ATI acquisition, sales are on the rise too, nearly double from last year. Even Dell has broken their longstanding embargo, with some of their configurations now sporting AMD inside. And with Barcelona on the horizon, their quad-core future looks bright. Perhaps one day we’ll see a Green Man Group ad campaign?

But not all numbers look rosy for AMD. It’s been quite some time since the underdog was, well, an underdog, but suddenly it’s an Intel Core 2 Duo world. Need advice on a new build? Go Intel. Wondering which processor chews through the benchmarks faster? It’s Intel. Want to run two nVidia videocards in SLI? Yep, Intel can do that too, and unlike nVidia’s previous chipset attempts for big blue, 680i/650i based boards are winning the hearts of overclockers.

Those familiar with the leapfrog effect in the tech industry will shrug this off as no big deal. After all, we’ve seen this time and again; one company leaps ahead of the other with a better product, only to be outdone months later. Rinse and repeat. So what’s there to be concerned about, right? I fear it may be more than you think, but let’s first look at how AMD got here.

AMD’s been churning out chips since 1975, but it’s the K7 lineup introduced in 1999 that really propelled AMD into the limelight, particularly the eventual Barton core. While Intel boasted high clock speeds (I have fond memories of ramping up my 2.4C Northwood to a juicy 3.4GHz) and dominated the content creation landscape, AMD’s more efficient architecture, combined with aggressive price cuts, made them ideal candidates for gamers and enthusiasts alike, myself included. I still own a multiplier unlocked 2500+ Barton, a wonder chip that could not only run at 3200+ performance levels with a simple frontside bus boost, but more attractively, quickly began selling for under $100 street. With Intel unwilling to compete on the pricing front, AMD could claim victory by snagging a portion of the enthusiast sector.

Skip ahead to round two in this new era of chip wars, and Intel’s stubborn insistence on playing the gigahertz card allowed AMD to close the performance gap with the A64/K8 line. Intel’s Prescotts just required too much clockspeed to overcome the inefficiency inherent in Neburst, and even though their much more efficient mobile Pentium-M (Dothan) proved they could compete with AMD architecturally, the suits in Santa Clara preferred to tout clockspeed as the end-all-be-all. Score another victory for AMD as enthusiasts continued to flock to greener grass.

That brings us back to today, and here’s where things get interesting. If AMD was looking to attract Intel’s attention, they’ve done it. Waking out of their slumber, Intel’s Core lineup is wiping the floor with AMD, and equally important, they’re doing so at reasonable price points. I’ve got an E6300 Core 2 Duo that runs at 3.0GHz without flinching, and the chip only costs $183 on Newegg. Without the ability to significantly undercut on pricing or compete from a performance standpoint, how does AMD get enough leg strength to leapfrog back ahead? Socket AM2 brought DDR2 to the table, but not much in terms of performance, and Quad-FX turned out to be a disappointment. AMD’s running out of tricks, and they need to pull a silicon rabbit out of their hat. Early indications point to Barcelona, a chip that features four cores on a single die, but will it be enough? For the sake of competition, I sure hope so. The problem is, unlike the K7 and K8 glory days, Intel isn’t sitting idle or pushing an overpriced, dead end architecture. So while AMD can celebrate becoming the number eight chip supplier in the world, they’re still up against number one, except this time Chipzilla’s gone on the offensive.

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